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Gridley Presentation at Mobile: IAB Marketplace July 18, 2011
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Transcript of Gridley Presentation at Mobile: IAB Marketplace July 18, 2011
1
July 18, 2011
Crowne Plaza Hotel, New York City
Mobile Moves to Mainstreet:
Implications for the VC and M&A MarketLinda Gridley, President & CEO, Gridley & Company LLC
2
Global Mobile Internet Ecosystem Poised for
Breakout Growth
Mobile internet revenue by 2015 (1)
Mobile data plan revenue by 2016, at a 9% 2011-2016 CAGR (2)
Mobile commerce revenue by 2016, at a 39% 2011-2016 CAGR (3)
Mobile ad revenue by 2016, at a 44% 2011-2016 CAGR (4)
$198BN
$102BN
$31BN
$21BN
(1) Source: ABI Research (November 2010 )(2) Source: ABI Research (March 2011)(3) Source: Forrester (June 2011)(4) Source: Gartner (June 2011)
3
Mobile Usage is Core to U.S. Consumer
Identity
(1) Source: CTIA: The Wireless Association (December 2010)(2) Source: Pew Internet & American Life “Generations and their gadgets” (February 2011)(3) Source: Pew Internet & American Life Project Survey (July 2010)(4) Source: Pew 2011 State of the News Media Report (March 2011)
Mobile phone penetration currently, ~100% by 2013 (1)96%
27%
53%
Households that are wireless only (2)
U.S. mobile internet users who access internet at least once a day (3)
34% Adults use their phones to send or receive email (2)
47% Americans who use a mobile device to access local news and
information (4)
4
Big Change in Expectations in Last 5 Years
Telephone
SMS
Ring Tones
Music
Computer
Newspapers,
Magazines,
Books
Snail
Video
Camera
Range
Finder
Game
Console
Alarm
ClockMusic
Player
Credit Cards,
Identity
Telephone
PDA
GPS,
Maps,
Compass
Camera
Watch
5
Summarizing the Mobile Ecosystem
Marketing/Advertising/
Analytics
Commerce / Payments
Content Social
Network
Hardware
Lo
ca
l
Pers
on
al
6
Mobile Landscape TodayMarketing/
Advertising/Analytics
Commerce / Payments Content Social
7
Mobile is a Marketer’s Dream
• Mobile phones are ubiquitous and immediate
• Highly attentive and captive audience
• Mobile = new targeting capabilities
– Location-based targeting
– Intent-based targeting
• More than 60% of mobile phone users comfortable with mobile
marketing (1)
(1) Source: InMobi and comScore Survey (August 2010)
8
How Mobile is Changing E-Commerce
• Consumers carrying devices that know more about environment than they
do
• Ability to pinpoint shopper’s location and engage real-time
• Consumers using mobile devices at different points of the purchase cycle:
– Discounts and deals
– Product / experience discovery
– Store locator
– Comparison shopping and reviews
– Checkout
• Each point of the purchase cycle provides an opportunity to engage,
redirect, and add value to purchase decisions for shoppers
$$
Real time ads,
offers, etc.
9
Mobile Connects Us More Than Ever Before
• Location-based socialization services, games, SMS, and IM are all in
development
– Social implications for real-time broadcast of location and intent
(1) Source: eMarketer (November 2009)(2) Source: Facebook Statistics (June 2011)(3) Source: Informa (March 2010)
Mobile social networkers globally by 2013 (1)600MM+
43%
250MM+
Percent of global web users who will access social networks by mobile (1)
Facebookmobile users as of June 2011 (2)
Mobile social networking revenues by 2013 (3)$1.0BN+
10
Consumption of Mobile Content Growing
• Mobile music spend shifting: ringtone purchase to music access from the
cloud
• Mobile device improvements will spur growth in mobile gaming and
mobile video
Source: eMarketer (August 2010)
$1.1$1.5
$2.0$2.7
$3.1$3.5
US Mobile Content by Revenue ($BN)
2009 2010 2011 2012 2013 2014
Gaming
Video
Music
11
Lots of Interest in Mobile from VC'sMarketing/
Advertising/Analytics
Commerce / Payments Content Social
Represents companies with at least $10MM in investments
12
Lots of Interest in Mobile from VC's
Source: CapIQ, includes investments >$5MM
• Mobile investments this year may outpace 2010 + 2009
$641
$870
$385
$571
$1,101
$757$552
2005 2006 2007 2008 2009 2010 2011YTD
Private Placement Investments by Year ($MM)
13
Where Has Capital Gone?
Marketing/Advertising/Analytics
Commerce / Payments
Content Social
‘05-’07 ‘08-’10
$321 $359
‘05-’07 ‘08-’10
$356$375
‘05-’07 ‘08-’10
$173
$870
‘05-’07 ‘08-’10
$749
$1,579
$ in millions
Source: CapIQ, includes investments >$5MM
14
Key Investment Themes to Date
• Wireless infrastructure driven
• Investment in SMS & basic marketing
• Investment in simple apps
• Investing into network effect themes
• Payment and Marketing led businesses getting majority of attention
2005 –
2007
2008–
TO
DA
Y
15
7
Key Investors in Mobile
Marketing/ Advertising Analytics
Commerce/ Payments
Content
Social
98
10
Current Investments in Mobile Digital Media
16
Mobile M&A Will Explode as Models Develop
Source: CapIQ
• M&A is lagging behind investments, but it will come like a “tsunami”
M&A Volume by Year ($MM)
$429
$930$1,086
$419$443
$1,829
$719
2005 2006 2007 2008 2009 2010 2011YTD
17
Marketing/Advertising/Analytics
Commerce / Payments Content Social
Selected Recent M&A Activity
18
Where Have M&A Dollars Gone?
Marketing/Advertising/Analytics
Commerce / Payments
Content Social
‘05-’07 ‘08-’10
$236
$1,760
‘05-’07 ‘08-’10
$496
$86
‘05-’07 ‘08-’10 ‘05-’07 ‘08-’10
$590
$2,251
$ in millions
Source: CapIQ, Gridley estimates
Mostly small, undisclosed deals
19
Key M&A Themes to Date
• Wireless infrastructure driven
• One off application acquisitions
• M&A at some scale
• Early marketing related transactions
• Beginning to expand beyond marketing oriented services
2005 –
2006
2007–
2008
2009–
TO
DA
Y
20
644
Acquirers in Mobile
Marketing/ Advertising
Analytics
Commerce/ Payments
Content
Social
9
21
Mobile M&A Winner's Circle: eBAY
In store scanner
Nearby
Used, online
Online retail
Nearby
Used, online
Online retail
Virtual goods
Local Merchants / SMB
Any product
Discover Pay
Mobile Location based service
Retailer
At Home
• eBay as the strategic global commerce partner of choice
22
Advice for the Audience
23
Good News for the Investors: It’s Still Early
Source: Aite Group (November 2010)eMarketer (August 2010)Gartner (June 2011)Forrester (June 2011)
Sub $500MM
~ $2BN
~ $3BN
2011
~ $6BN
Payments Content Marketing Commerce
• 35% U.S. smartphone
penetration
– Price points will
continue to drop
• Innovation
• What is a mobile
device?
Comments:
24
Advice for the Private Companies
• When buyers and investors go beyond “test dollars”, they will look
to the #1 and #2 players
• SCALE! – get some good blue-chip client case studies and maximize
your subscriber base
• Stickiness will give you leverage with buyers
• Stay ahead in innovation: you may be the leader now, but so was
MySpace
25
To the Strategic Buyers: It’s Complicated
• Complex ecosystem with lots of entry possibilities
• Lots of strategic M&A coming – start looking now!
Commerce
Social
Content
Mkt / Adv /Analytics
Display
In app
Photo
Food
Events
Cities
PaymentsLocal
Shop
Measurement
In-store Payments
Games News
On Deck
Events
Music
Books
Video
26
…And Competitive
Marketing/Advertising/Analytics
Commerce / Payments Content Social
27
Contact us for an informative discussion.
Pratik Patel 212-400-9712
Linda Gridley 212-400-9710
QUESTIONS?