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Posted at 04:39 PM ET, 05/30/2012

Mary Meeker’s Internet trends report lands


Mary Meeker speaks at the "All Things D" conference. (HANDOUT - REUTERS)
Every year, Mary Meeker of famed venture capital firm Kleiner Perkins Caufield & Byers, puts together a report on Internet Trends.

Think of it as a State of the Union address, but for the Web.

The report, co-authored by Kleiner digital team member Liang Wu, is an in-depth exploration of the global population online: what they’re doing, where they’re going and how they’re consuming the bits and bytes of the Web. This year’s version was released at the D10 conference on Wednesday.

The good news: Mobile use is exploding, and it can be leveraged for revenue.

The bad news: Americans are still down in the dumps — and for good reason — about the economy.

Who’s online: According to Meeker’s presentation, there are 2.3 billion global Internet users in 2011 — an 8 percent year-over-year growth rate since 2008, largely driven by emerging markets. Meanwhile, there are 1.1 billion global mobile 3G subscribers. Of the top 10 countries addding users to the Web over the 2008-2011 period, China ranks first and India second — with the U.S. coming in 8th. However, the U.S. comes in second in terms of total Internet users in 2011.

Apple: In terms of mobile device sales in the Apple universe, the iPad left its “siblings in [the] dust,” according to the report, with sales growing at three times the pace of the iPhone and all but obliterating iPod sales — the device that started the iRevolution in Apple’s mp3/mobile product universe.

Android ascendant: The report finds that global shipments of phones on the Android platform have grown four times faster than iPhone over the past 13 quarters. But mobile phones still dominate smartphones, with 6.1 billion mobile phone subscriptions in the world, relative to 953 million smartphone subscriptions.

The tablet market grows: In the U.S. tablet ownership is on the rise, with 29 percent of U.S. adults owning a tablet — up from 2 percent less than three years ago.

Mobile, mobile, mobile...: The good news in the report? It’s all about mobile, which accounts for 10 percent of Internet traffic. (In December of 2009, mobile accounted for only one percent of Web traffic.) And with this growth comes cash, with mobile monetization “growing rapidly.” Seventy-one percent of that growth is coming from apps and 29 percent from advertising. And when it comes to getting the biggest bang for your advertising buck, the Web — particularly mobile — is where advertisers should turn. Where not to go? Print (of course).

The dark cloud: While mobile use is expanding and ripe for revenue, the amount earned per user on mobile is far less than what can be earned from desktop users. Take Zynga, for example. According to the report, the social gaming company takes in $25 in average revenue per desktop user but only $5 per user who accesses the game via mobile phone. Google and Facebook are feeling that pinch, too. Cost-per-click on advertising for both companies has declined quarter-over-quarter. But hope is not lost, if Japanese mobile gamemaker GREE is any indication. That company has boosted its annualized average revenue per user since the third quarter of 2010. The report also pointed to Japanese mobile game maker CyberAgent — which on average now makes more per mobile user than per desktop user — as a sign that mobile can eventually become a revenue-driver. In other words, if you’re hoping to make money on mobile, be patient.

The re-imagination of everything: The report concludes with a graceful and insightful slide show of how nearly everything in our daily lives has been re-imagined -- from news, connectivity and life stories to note-taking and art — in the age of the Internet. Slides 29-84 are a particularly inspirational tour of the new, digital world. And, Meeker and Lieu noted in the report, “we are still in spring training.” The report highlights opportunities to leverage cars (where Americans’ time and attention is “largely untapped”), televisions and mobile sensor technology.

Action items: Three key suggestions in the report for what Americans can do to improve the generally bleak economic outlook stand out:

- “Engage in politics.”

- “Help others understand key issues.”

- “Do what you can to innovate, create jobs and improve education.”

Last but not least, the report addresses the question of whether the markets are caught in a social media bubble. Aside from LinkedIn, nearly all of the high-profile tech IPOs are down from their initial IPO price — including Facebook, of course.

As for a definitive answer as to whether the bubble exists, the report fails to offer a clear “yes” or “no,” but does call the recent Internet IPO's “compelling in market value” but not “in performance.”

KPCB Internet Trends 2012

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By  |  04:39 PM ET, 05/30/2012

Categories:  Business, Research

 
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