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June 9, 2015

The Oracle Of Silicon Valley Has Spoken

Posted by Suryaprakash K. (View Profile | View All Posts) at 9:25 AM

Mobile transformation is finally here [Source: https://www.youtube.com/watch?v=MkZk2SKd1E0]

In the realm of stock market investing, Warren Buffett is known affectionately as the 'Oracle of Omaha' by his legions of fans. The nickname refers to the small city that he has called home most of his adult life. Along those lines, I propose we call Mary Meeker the 'Oracle of Silicon Valley' for her prescient and mostly accurate views on the digital marketplace.

This former bank analyst, now a private equity financier investing in the very space she once wrote about, makes an annual Internet Trends report that pretty much stops the clock in the technology world. Everyone wants to hear what this particular oracle has to say about the rapidly evolving online world. One of the best aspects of her presentation is just how long she has studied the space: since the very beginning. If you want to get a sense of just how profoundly the Internet space has changed during the past two decades, take a look at her list of the largest Internet companies of 1995. Remember Netscape?

This year's presentation was the perhaps her most compelling and urgent in recent years. For one, many of her long-running predictions have finally come true. Yes, the presentation was beginning to get a bit predictable. I enjoyed this year's sense of urgency. First, the multi-year prediction that we will all move away from desktops and laptops has finally, overwhelmingly taken place. Of the nearly six hours a day a typical American adult spends on the Internet, more of that time is on mobile devices. She's been predicting for years that this transformation would happen. And it finally has. But has the corporate world really listened? Granted, they've had a long time to prepare for this seismic shift.

For instance, her sample set (American consumers) spend most of their time accessing the Internet via mobile devices, yet corporations devote just 8 percent of their advertising spending to the mobile medium. Are consumer-facing companies fundamentally changing the way they market to consumers? Not yet. Many of them are still stuck in TV land. If only companies would build the appropriate digital architecture to host mobile advertisements, they could experience massive revenue boosts, according to Meeker.

Tastes themselves have changed accordingly with this year's triumph of the mobile device. No longer are people 'surfing' the web so much as they are gobbling up loads of bite-sized content. So organizations need to change the way they package content. The average attention span of an Internet user has reduced considerably in the two decades that Meeker has covered (and now invests in) this industry. The content must (and sometimes does) change to meet those dwindling attention spans. Consider, for instance, that 'pin creation' on Pinterest is up 75 percent year-over-year. Most of these pins are of smiling babies or enchanting sunsets. Snapchat, billed as all the rage among tech-savvy teens, enjoys 100 million users each day creating content.

But none of this content is up to the standards of, say, The Wall Street Journal or The Economist, mind you. These are skateboarding pictures or selfies of best friends (forever). True knowledge and wisdom might be rare in the mobile universe, but any platform that can harness content creation - any content, no matter how insignificant - will be a winning platform. Gone are the days when Internet users surfed the web for information; now they generate content themselves. Old-line media companies that proffer high-end wisdom continue to feel the economic pinch.

Other industries are facing quite the opposite, says Meeker. There's a potential windfall for enterprises in the government, healthcare, and education sectors. That's because these are large, heavily regulated spaces where the rules of the Internet have taken longer to blossom. But smart entrepreneurs armed with the right IT partners are beginning to get around all that regulation, she says. It seems healthcare and education businesses are to today's Internet start-ups what retailing was to them a couple decades ago: fresh and fertile territory to be conquered.

The best part of Meeker's incredibly long and information-packed presentation (this year she had nearly 200 slides!) shouldn't be lost among all the details. It's that the mobile Internet is finally mobile. It's not just a smaller screen transferred over from a desktop or laptop. To understand this evolution is to place your finger on what has finally happened. It's to understand that the Internet itself went mobile, and we finally went along with it ... and we went with it the appropriate way. We consumers are sometimes slow learners, as are the enterprises that serve us, but when we truly embrace a technology as we have with mobile, the sky is the limit.

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