Facebook:Closing in on 700 million subscribers

If Facebook were a country, it would be the third most populous one globally just behind China and India. It would be marginally smaller than the combined populations of the 3rd,4th and 5th Populous nations: US, Indonesia and Brazil and would be larger than the combined populations of Pakistan, Bangladesh, Nigeria, Russia and Japan. This is an absolute jaw dropping milestone and one of the largest revolutions in the history of mankind… socially networking diverse communities and individuals. This then raised a question around the more effective nature of Web: Whether it was Social led or Search led ? By making the web social, Facebook was undermining the kind of Internet: Google!

The countries that contributed most to the growth were emerging countries, especially Brazil, Indonesia and India. Brazil and India are interesting because they’re huge and have other social networks. If Facebook dominates there, it can grow that much faster and dominate that much more.

The incredible and inexorable rise of Facebook has given a hallow effect to Social Networking as a tool of customer engagement and social change. Others like Linkedin have had huge valuations and bumper IPO listings on the premise and promise. The valuations are currently so stretched that deliveries of such high expectations look to be a steep ask…and thus the apprehension of another bubble similar to the Dotcom bubble in 2000. Facebook listing through an IPO is one of the most awaited events waiting to happen in the equity markets. Facebook is also putting in other enablers in place that take its core proposition around Social networks to new highs.

Facebook has registered a 99% users CAGR in last 3 years. A Phenomenon because no other company in recent history has had such a run as FB.

Consensus gathering on Apps as the Face of Internet (Internet of all Things)

The app Internet will dramatically alter the Web as users know it, force today’s leading technology vendors to adapt to a new business environment, and affect every job function in the business technology (BT) organization. Despite industry’s preoccupation with cloud computing, a standalone cloud or web solution is not the web architecture of the future.
Forrester Research CEO and Chairman of the Board George F. Colony.

I have always emphasized as the Internet delivery medium of the future: Always on, active, connected, Usage specific. Read my earlier posts on Apps: The new face of Internet ( Part II and Part I).

Inherent in this is the fact that Internet will evolve from the laptop, smartphone delivery to a more ubiquitous presence across a range of devices.The App medium will also be a driving force behind Semantic Web, the internet of all things. Internet in your Phone, TV, AC, Microwave, Electricals and more. Business organizations will have to focus on creating on alternate delivery mechanisms around their user and the solution through applications. Business Process Professionals will not create new applications without the app Internet, CIOs must prove they can embrace customer-centricity through the adoption of the app Internet, and Security & Risk Professionals will have great job security as companies are challenged with how to protect their enterprises in this new model. As the footprint of internet delivered through these alternate sources increases, app based solutioning will be critical.

So while, Apple has established leadership in the app Internet space, and web-centric companies such as Google and Facebook are risky bets in the app Internet market due to their overreliance on web-based technologies. Forrester estimates that the app Internet market was $2.2 billion in 2010 with a compound annual growth rate of 85 percent through 2015. Others like SAP and Oracle, must determine how they are going to price these apps, and PC vendors such as HP and Dell must reform the PC experience to focus on app stores, which will be on every connected device in the future and serve as the keys to the Internet. Microsoft has important pieces to enable the app Internet — such as its application framework Silverlight — but must transition to a world of low-cost, dynamic applications and out of the old desktop licensing model.

It also opens up a green field for innovators and other ventures to test the waters, offer innovative solutions across a range of devices. There is always ground for start-ups to come up with ground breaking solutions in here.

Apple more successful in making money in mobile apps compared to Android

Monetization of apps has been Android’s Achilles heal for a while now. It is rather strange that with some very strategic assets such as Check out, The surging numbers of Android phones and more, Android has not been able to put it resources behind apps which could lead to higher levels of monetization. It is more challenging for developers in the Google Android Market than in the Apple App Store to monetize using a one-off fee monetization model. The Android eco-system suffers from lack of monetization and paid applications have a higher chance to reach high download volumes in the Apple App Store for iPhone than in the Google Android Market. This actually puts onus on the Android team to make monies through in-app and store level advertisements.

The difficult task for Android developers is to monetize applications in the Google Android Market using a one-off fee monetization model, which is why developers have turned to advertising to monetize their applications. the recent introduction of in-app billing should give developers more opportunities to monetize applications

Android has been criticized for the lack of discover-ability which is why the team is putting in quick amendments:
1. Android takes a long term performance of apps into account in order to rank apps. They are looking to reverse the ranking logic to include top trending new apps and all time apps
2. Android is putting steam behind local content as a differentiator for the Marketplace.

Will Android get the act right?

Top 20 Mobile Operators in the World

Wireless Intelligence released a report recently on the Top 20 Mobile Operators in the world based on revenues. The list is led by China Mobile followed by Vodafone and Verizon. Bharti Airtel scores 5th in terms of subscribers having just shy of 200 million subscribers.

However, Airtel is the worst performer in terms of revenue generated per user. Airtel earns USD 14.5 per subscriber in an year, equivalent to about Rs. 650 in an year.China Mobile earns over Rs. 1530 on its 584 Million Subscriber base. NTT DOCOMO which is primarily based in Japan, earns over 9000 rupees per subscriber and ranks 6th largest in terms of revenue on its relatively miniscule 57 million subscriber base. That is about 14 times more than Bharti Airtel !

7 out of top 20 mobile operators earn over Rs. 4500 (USD 100) per subscriber. The average per subscriber earning amongst top 20 mobile providers is Rs. 3813!

Semantic Media: Future Happening

Continued from an earlier post on Defining Semantic Web.

Mobile marketing as is and would still be the tip of a greater phenomenon that at this point of time, i would call Semantic Marketing Media, an extension of the concept Semantic Web, or Web 3.0, which is currently a nascent and “in concept phenomena”.

Mobile Marketing is a larger concept in comparison to Mobile advertisements and Mobile promotions. While both Mobile advertisements and Promotions are deal based, the key for the success of Mobile Marketing will be engaging the consumers and powering branded experiences around user journeys. User Journeys could at this point be defined as Consumer initiated transactions between himself and the company to satisfy any of the following needs: Discovery, Awareness, Experience, Engagement, Context, Transaction, Conversations and Profiles. This is defined as Semantic Media. The ability of mobiles to power such experiences are critical to context and profile based user targeting. The convergence of devices and platforms and technologies enable a whole system of technologies which can target relevant users contextually and enable them to talk to the brand, transact with the brand at different touch-points and in different locational contexts as well as different platforms.

Semantic Media would be the Media 4.0 after Mass Media, Internet Democracy and Social Media. The Internet Democracy and Social Media would also be Web 1.0 and Web 2.0 contemporaries. Semantic Media will be the contemporary of the “Internet of Things”, Web 3.0 thereby getting its name: Semantic i.e Metadata aware Media.

Continued here

YouTube: Google’s Future Growth Engine

YouTube.com celebrated its 6th Birthday with some style, panache and big numbers. YouTube was founded on Valentines Day (Feb 14), 2005. YouTube.com was launched in May 2005. Google acquired YouTube in 2006 From the novelty of self-broadcasting to being a central tool used by protesters across North Africa and the Middle East. The site shared some of its big numbers that emphasize and underscore its overwhelming dominance in the online video streaming space.

Heres the cake and the icing:
1. YouTube daily global views are 3 billion on a daily basis which put in context is half the population on earth. To put that in some perspective: comScoresaid last week that the total U.S. Internet audience engaged in roughly 5 billion viewing sessions for the entire month of April 2011. According to comScore’s Video Metrix, YouTube ranked as the top online video content property in April (U.S. only) with 142.7 million unique viewers, followed by VEVO with 55.2 million viewers, Yahoo Sites with 53.2 million viewers and Facebook with 46.7 million viewers. That statisctic translates to every U.S. resident watching at least nine videos a day
2. Viewership has registered a 50% increase over the previous year.
3. 48 hours of video uploaded to the site every single minute. The company names three main reasons for this growth, citing an increase in live streaming events, longer upload times and also faster upload processing times. Think DLF IPL?
4. The upload statistic represents a 37-percent increase over the last six months and a 100-percent increase from last year.

While YouTube hasn’t made any profits for Google yet, Citibank forecasts YouTube revenues to surpass $1billion by 2012. YouTube is the masthead of Google’s other properties beyond search, which Include display advertising, video advertising (YouTube), mobile search, and local. YouTube and local advertising. According to his estimates, YouTube’s gross revenues hit $825 million in 2010, and will reach $1.3 billion in 2011 and $1.7 billion in 2012. After stripping out revenue share, the net revenue contribution Google will get to keep from YouTube is estimated to go from $544 million last year to $1.1 billion in 2012.

YouTube has been catalyst of Google’s evolution from a search major to Media Company. In the current context it is unlikely that YouTube’s growth will see any major roadblock for the next 5 years during which time it will continue to disrupt media space and video advertising.

Chromebook (Part V): The wish list for Chromebook improvements!

I have featured Chromebooks in four blogs earlier. Read them here: The cloud kisses the laptop, Subscriptions that might have changed the industry standards, Google’s own iPad Moment and 10 reasons why Chromebooks haven’t really won a lot of admirers out there! (Not Yet!). This one is a reproduction of an article bv Desire Athow.

Chromebooks are atleast 3 weeks off from stores and sales and inspite of the drubbing that Chromebook has received from Blogosphere, Amazon reports Chromebooks already in the top 20 “most wished for” items in the laptop category.

The original Chromebooks though are far from being perfect and there are at least four things that can be done to improve the current generation quite easily actually.

1. ARM instead of Intel: ARM’s biggest strengths centres around its battery consumption. Toshiba AC100-10U laptop (ARM powered) , which runs Android, is cheaper by a third and weighs 40 per cent less while having a similar battery life compared to the average Chromebook.
What’s even more incredible is that the AC100 uses a 2200mAh, 3-cell battery, compared to 6-cell 8280mAh monster on the Samsung Chromebook. Intel powered devices have more expensive and bulkier brick-type power adaptors, whereas ARM based ones are likely to have smaller, cheaper wall-type models.

2. Speaking of the battery in the Chromebook, making it removable would be a great idea as the laptop only supports up to 1000 cycles or around 18 months in the worse case scenario.

3. Bringing in an Ethernet port – a conspicuous omission – would also make a lot of sense especially if you have to set up the laptop in a notspot zone in the first place.

4. Connectivitywise, turning Chromebooks into hotspots would be a pretty cool addition indeed, something that Connectify does already for Windows and Google already achieved with Android since Froyo.

The art of perfecting a product is a multi-iterative process and Chromebooks will also follow the same trend in time.

Defining the Semantic Web

Semantic Web was defined by Tim Berners-Lee, the father of World Wide Web. He defines the Semantic Web as “a web of data that can be processed directly and indirectly by machines.” It extends the network of hyperlinked human-readable web pages by inserting machine-readable metadata about pages and how they are related to each other, enabling automated agents to access the Web more intelligently and perform tasks on behalf of users. Many of the technologies proposed by the Semantic Web already exist and are used in various contexts, particularly those dealing with information that encompasses a limited and defined domain, and where sharing data is a common necessity.

The main purpose of the Semantic Web is driving the evolution of the current Web by allowing users to use it to its full potential, thus allowing them to find, share, and combine information more easily. However, machines cannot accomplish all of these tasks without human direction, because web pages are designed to be read by people, not machines. The semantic web is a vision of information that can be interpreted by machines, so machines can perform more of the tedious work involved in finding, combining, and acting upon information on the web. The Semantic Web is regarded as an integrator across different content, information applications and systems

Tim Berners-Lee on Semantic Web
I have a dream for the Web [in which computers] become capable of analyzing all the data on the Web – the content, links, and transactions between people and computers. A ‘Semantic Web’, which should make this possible, has yet to emerge, but when it does, the day-to-day mechanisms of trade, bureaucracy and our daily lives will be handled by machines talking to machines. The ‘intelligent agents’ people have touted for ages will finally materialize.

Graphic:The Evolution of Web

Semantic Web in daily usage is referred to as Web 3.0 to express the third generation capabilities of Web in categorizing, indexing and sorting information. With proliferation of data networks prompting a healthy data habit delivered through multiple platforms (Social platforms, Web, TV, Mobiles, Applications and more) and devices ( Smartphones, Feature Phones, Smart TVs, MIDs, Gaming Consoles, Tablets), Web 3.0 will be a great experience generator for customized and relevant consumer experiences.

The ability of the web to analyze meta data will be great for profile focussed, context relevant ads being served. Thus the key features of Semantic Media would be
1. Me-onomy: User is the brand.
2. Active and always on
3. Context and profile aware
4. Presence across platforms and device categories

Semantic Media with its Meta data and WWW-language capabilities could have various interpretation from Web 3.0, Marketing 4.0, Advertisement 3.0, Engagement 3.0, Entertainment 3.0 and more. Semantic Media thus is future that is waiting to happen. Currently in its nascent concept stage, Semantic Media will see threshold by 2015 and go through the roof by 2020.

To be continued

Gartner: Q1,2011 Mobile Phone and Smartphone Market shares

Mobile phones device sales increased 19% Y-o-Y to total 427.8 million units in Q1,2011, On the same lines, Smartphone sales registered a 85% increase and accounted for 23.6% of overall mobile sales in 2011. Smartphones registered 100.8 million unit sales in 2011. Smartphone numbers have seen a depression due to the situation in Japan and the fact that buyers haven’t invested in smartphones in Q1,2011 anticipating stronger and bigger device releases in Q2,2011.

Graphic:Gartner Mobile device market shares

Graphic:Gartner Smartphone market shares

The smartphone numbers only re-inforce the familiar rise of Android to Ubiquitous status, the marginalization of Symbian in Smartphone OSs and pressure on Nokia to defend its leadership. Symbian lost 24% share in 9 quarters, whereas Android gained 35% of its market in the same 9 quarters propelling the likes of HTC to No.7 in Devices and lifting the ASPs for Motorola, Sony Ericsson and Motorola. Android currently is in the mode of moving into the $100 price feature phones to get into the mass mode.

Nokia’s move from Symbian to Windows was announced this February and there is a 1 year or more waiting time before the Nokia Windows Phone hits the shelves. In the meantime, consumers are expected to shy away from Symbian and thus in the ensuing quarters, Symbian market shares are expected to free fall further. By the time, the Windows tie-up kicks in for Nokia, Nokia could well be around 10% market share points and combined with Windows, it would claw back to 20% but never really challenge the dominance of the Android OS, eco-system and partners.

Graphic:Market shares for device makers over the last 9 quarters

With presence across 90 countries from 186 CSPs, Apple has doubled its number of units sold Y-o-Y. It is unlikely that Apple will push past the 20% market share in Smartphones majorly, but the unique eco system of devices, applications, platforms and services would make it the most profitable mobile platform.

Graphic:Market shares of device majors

In the first quarter of 2011, RIM announced that it would transition its BlackBerry portfolio to the QNX platform in 2012. This should make its smartphones more competitive in graphics, performance and touch, and unify RIM’s tablet and smartphone user experience.
Windows devices launched at the end of 2010 failed to grow in consumer preference and CSPs continued to focus on Android. In the long term, Nokia’s support will accelerate Windows Phone’s momentum to double figures.

Are valuations in Social Media stretched? (Cue:Under-promise, Over-Deliver. What about Over Promising?)

Professional social networking site LinkedIn is raising the price at which it will sell shares in its forthcoming initial public offering (IPO). The new sale price values the firm at $4.3 billion rather than the earlier $3 billion. This comes in the wake of the fact that comScore reported 65% Y-o-Y increase, from 48 million users in March 2010 to 79 million as of March 2011 in traffic to Linkedin.LinkedIn made $15 million last year. It’s now worth $8 bln. That’s a P/E of 37+. Isn’t that a sign of bubble?

Signs of trouble yet?

In 1999-2000 Dotcom burst, overvalued dotcom – companies, which were not-profitable, went bankrupt and together with it millions of (invested) money and many jobs were lost! No one really knows if there is a bubble until after one pops. Nevertheless, there are many signs of froth. The valuations in Social Media are stretched a bit. Microsoft bought over Skype for $8.5 billion, Goldman Sachs has invested $1.5 billion in Facebook that has valued FB at $84 billion, Groupon is valuated for $15-$20 for its IPO listing. Such valuations are reminiscent of the dotcom bubble which busted 10 years ago.Twitter is being valued at $10billion and more. Zynga, creator of the popular Facebook game FarmVille, is worth more than $5 billion.Yammer, a system for sending Twitter-like messages inside businesses, recently raised $25 million, while investors reportedly signed a check for close to $30 million for a niche blogging site called Tumblr. GroupMe, a new group messaging app for cellphones, raised $9 million. Path, an iPhone app for sharing only photos on a social network limited to just 50 people, received $2.5 million. Its competitor, Picplz, scored $5 million. And those are just within the last few months. The trend accelerate over the last six to nine months. The valuation of Facebook has multiplied by a factor of 7 in the last 12 months.

Dotcom was different

Back in the ’90s, companies got funded for five times the amount that Tumblr raised and didn’t have anything close to a business model. People were getting $50 to $200 million a pop and it brought down an entire industry. The frenzy is as much the result of simple laws of supply and demand as the herd mentality. Thanks to the constantly falling cost of computing power, a start-up needs less money to get off the ground. More wealthy people are viewing investing in technology as a hobby, which has increased the competition. Investing in technology has become fashionable. It used to be that angel investing was the province of wealthy men. Now its become the province of everyone. Venture capitalists — hungry for growth and troubled by weak returns — are moving toward smaller investments, hoping to catch the next Facebook in its infancy.

Valuations and Companies will need to move with caution

There’s a lot of exuberance in the social media and technology. A lot of the valuations there don’t make a lot of sense.But, most Silicon Valley investors still see no signs of gloom and doom. Start-ups today have robust business models and business cases that make them viable. The Internet ecosystem has also matured. There is more to valuation than just eyeballs. It could be different this time! In 1999 when the bubble happened many companies did not have business models and advertising on the Web was very immature.2010 and onwards, the real challenge for start-ups flush with venture cash would be proving they were worth the investment or risk having to fold their companies.There may not be a big implosion, but down the road there will be a bunch of blood and tears. The music is going to stop and people will realize there aren’t enough chairs for companies to get the next round of financing. The High valuations though may be cheered for are long term liabilities on the entrepreneurs.The key question now is whether they can accelerate their revenue and earnings growth to eventually validate the valuations.

There are elements of the LinkedIn model – recruitment search – which reflect successful models elsewhere.The LinkedIn Valuation is, of course, just an appetiser for the big one – the prospective float of Facebook at some point in the not-too-distant future. How it is priced will provide a clearer picture of whether the possibly irrational exuberance around LinkedIn’s debut was specific to the dynamics of its offer or reflects the broader capitalisation of optimism about the commercial prospects for the major social networks.

A sound business proposition is the ability to under-promise and over-deliver. Currently the Social Networking valuations are very tall promises which make delivery (at such high order) a suspect. What we will need to wait and watch over the next 2 years is the ability of organizations to be able to spin the profits that the valuations oblige them to. If they cannot stand up to the expectations, then we all know that this is a bubble.We live in interesting times, dont we?