Mary Meeker’s internet trend report reads like a good guide to technology investing.
Mary Meeker breaks the mold, she is a top investor in a man’s world. She is a partner at the Silicon Valley venture capital firm Kleiner Perkins Caufield & Byers. Mary Meeker is also known on Wall Street as the “Queen of the Net”.
Mary Meeker’s internet trend report underlines the most important statistics and technology trends on the internet since 1995
“If it feels like we’re all drinking from a data firehose, it’s because we are” said Mary Meeker at Vox/Recode’s Code Conference in Scottsdale, Ariz on June 2019.
“If it feels like we’re all drinking from a data firehose, it’s because we are”
A list of some good and not so good shifts were identified in Mary Meeker’s internet trend report
Slowed growth in e-commerce sales fell into the latter category. But slowed growth in e-commerce is perhaps less of a story about technology and more about a slowing economy where household’s are reining in their discretionary spending.
The upbeat part of Mary Meeker’s internet trend report highlights an increase in internet advertisement spending
Internet add spending is not expected to slow until 2021. Meanwhile, online video and social media are expected to continue driving the increase. Internet ad spend is to account for 52% of global ad expenditure by 2021, up from 47% in 2019 and 44% in 2018, according to the latest Zenith Advertising Expenditure Forecast.
“The point at which internet advertising exceeds 50% of global ad spend has been approaching for some time, but this is the first time it has appeared in our forecasts” said Jonathan Barnard, Head of Forecasting at Zenith. “However, 2021 will be the first year of single-digit internet ad spend growth since 2001, the year the dotcom bubble burst”.
“The point at which internet advertising exceeds 50% of global ad spend has been approaching for some time, but this is the first time it has appeared in our forecasts”
The growth area is in online advertising and social media, concludes Mary Meeker’s internet trend report
Indeed, online video and social media are already propelling much of the growth in online advertising. Moreover, it is a trend which is expected to rise an average of 18% and 17% a year until 2021, respectively.
What is driving online ad spending?
Continued improvement into these channels and associated technologies suggests further growth downstream. In the last few years, mobile technologies have seen a pickup in connection speeds and business spending and investments which is helping to improve the online content.
With advancements in AI online ads are also becoming more effective at targeting eyeballs and converting add expenses to sales revenue.
“If notes and coins soon become obsolete then fintech stocks have the potential to shine bright like a diamond”
Mary Meeker’s internet trend report also highlights the booming business of apps
The fintech revolution is likely to be the greatest game-changer for banking and financial service industry in a generation. The future of retail banking could soon no longer be a bank branch but an app on a smartphone.
Fintech revolution, a portmanteau of “financial technology” which seeks to improve and automate the delivery of financial services is already having an impact on how millennials, the smartphone generation conducts their daily financial transactions.
If notes and coins soon become obsolete then fintech stocks have the potential to shine bright like a diamond.
Mary Meeker’s internet trend report identifies health care apps as another booming area
As populations in developed economies age, the health service sector is likely to do well.
The challenge to provide affordable health care for this aging population will encourage business and governments to employ technologies to streamline administration and reduce costs.
Already private healthcare companies are using their healthcare apps which is making plastic healthcare cards obsolete.
Moreover, patients can connect with healthcare professionals online for advice, information and even book appointments with their preferred specialists.
Healthcare apps help streamline administration costs, reduce the cost of healthcare and are helping to make this vital service more affordable.
So healthcare apps are likely to be a good bet going forward.
“Giving money to be used for consumption will merely diminish the value of money and not increase the size of the pie” – Ray Dalio
Mary Meeker’s internet trend report also notes the rise of freemium subscription business models, telemedicine, photo-sharing and the on-demand economy as other growth areas
Mary Meeker made references to Slack, Stripe, Spotify, Dropbox, Discord, Twitch, Zoom, Stitch Fix, Instagram, and Bond portfolio company Canva in her presentation.
The former Morgan Stanley analyst has also raised more than $1 billion for her debut growth fund, Bond.
Mobile gaming will continue to be the largest segment following 10 years of double-digit growth since the first iPhone was launched in 2007. In total, mobile revenues are expected to grow +25.5% year on year to reach $70.3 billion. This means that for the first time, more than half of all game revenues will come from the mobile segment.
The spectacular growth in internet gaming is being propelled by mobile devices. Smartphone games represented $56.4B up 29% year on year.
So Mary Meeker’s internet trend report suggests a bullish trend for business apps, particularly fintech and healthcare apps. On line, advertising is also expected to continue growing.
Internet gaming is another booming area going forward.
Most of this growth is being driven by access to the internet via mobile devices such as smartphones.
Dan Loeb targets Sony. Dan Loeb is an activist investor and founder of Third Point, which oversees about $14.5 billion in assets.
Last year the activist investor viewed Campbell soup as a bargain when Third point reported that the soup maker could fetch a takeover value of $52 to $58 per share.
A year later and the activist investor Dan Loeb targets Sony
Dan Loeb's activist hedge fund Third Point is raising an investment vehicle to generate between $500 million and $1 billion so it can continue to buy Sony shares, according to a recent report in Reuters.