Thursday, May 31, 2012

Meeker of KPCB Bullish on Mobile Monetization


In a relatively short time frame, having a smart phone has transformed from merely possessing a status symbol to a necessary tool for the average person that facilitates almost every day-to-day interaction. Yet mobile commerce is still at a nascent stage, making up only 8% of U.S. e-commerce. Many in the mobile space observe that, despite booming traffic, monetization remains a major challenge for mobile app developers. Remarks by Mary Meeker, a partner at Kleiner Perkins, at a recent presentation on Internet trends indicate that the future bodes well for making money from mobile. Meeker asserts that mobile monetization "has more going for it" than early desktop monetization, citing the very rapid user growth, increasing engagement, and unparalleled rate of innovation. Further, Meeker notes that there is often a lag time between increasing usage of new media and ad spend associated with it. Within 3 years, she believes that mobile monetization will exceed desktop PC monetization.

While this forecast may be overly optimistic, the underlying trend is inevitable. Smart phone users exhibit diminishing reliance on PCs for basic tools, such as email and web browsers, and mobile devices offer more convenient functionality relevant to a host of regular activities (i.e., shopping, review seeking, street mapping). This translates into greater mobile usage and hence more revenue streams for businesses in this space. Meeker points out that GREE achieved average revenue per member growth (roughly 2x within a year), which may not be the best benchmark for the rest of the sector since it's a Japanese mobile gaming company...


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