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Apr 28, 2008

NEWS: Morgan Stanley’s March Internet Trends Report: Social Applications Dominating

Morgan Stanley’s March Internet Trends Report: Social Applications Dominating

Morgan Stanley’s Internet Trends report from last month takes a big turn from previous reports - the focus is nearly 100% on social applications and how they are taking over the Internet (Yahoo apparently read it). Key takeaways:

  • YouTube + Facebook page views > Google + Yahoo page views
  • 6/10 top internet sites are social (youtube, live.com, facebook, hi5, wikipedia, orkut); none were on the list in 2005
  • 16% of total time online is spent on “social connections,” up from 0% three years ago
  • YouTube has 258 million users, 50% visit weekly or more
  • >50% of Facebook users log in daily, 95% of Facebook users have used at least one third party application
  • Skype revenue is $1.67/user/year, up 9% Y/Y
  • 14 million photos uploaded daily on Facebook
  • Google + Yahoo = 61% of U.S. Online Ad Revenue
  • Google: $4.4b ad revenue in Q4, paid out $1.4 billion to partners
  • Yahoo: $1.6 billion in ad revenue in Q4, paid out $429 million to partners


SlideShare | View 
Ed: Supports general themes of "The New Economics of Advertising"
  • Internet time shifting from eMail/search to social sharing at Facebook, Youtube, and Myspace. No assessment of blog share. 
  • PC is dominant mode of access in USA. Mobile is primary access to Internet in ROW - i.e. using laptops and smart phones.
  • Long Tail of blogs and publishers gaining share of content and circulation, but not the monetization.
67 slides reduced to 3 themes. Exceptional analysis of per-capita revenues by site. Google leads.

Last week we talked to the head of one of the most successful Facebook app companies -- we won't disclose his name or product, but he's got millions of users. How's business? Great. How's revenue? Not really focusing on that yet.

OK, fair enough. But say you were focusing on revenue. What would that look like? Well, said our candid CEO, it wouldn't be huge right now: Though the Facebook third-party app platform is nearly a year old, there isn't really an established ad market for app developers yet. CPMs, said our unnamed CEO, were hovering around the 50-cent mark -- in other words, the same crummy rates that most social networks see.

Inside Facebook polls its readers and gets similar results: With the exception of two outliers, respondents say they're saying CPMs of 50 cents and less for their app inventory, which are sold by networks (not clear whether we're seeing gross cpms or the app-makers' take, after the network has taken its cut):

  • tspree15 is making $0.60 CPM with Social Media
  • cbovis is making $1.50 CPM with VideoEgg, but they can't cover all his inventory (the rest runs on RockYou)
  • sweetsteve is making $0.27 CPM with Cubics, down from $0.43 earlier this month
  • ejono is seeing a $0.40 CPM with Cubics
  • cory is making a $4.78 eCPM with Social Media (???)
  • mzeitler is making a $0.50 CPM each with AdSense, FB Exchange, Social Media, and RockYou (and by combining 2 units on a page is making $1.00 CPM)
  • saintseiya is making $0.125 CPM with Lookery ($0.25 with 2 ads above the fold)
  • markdoub is seeing $0.10 CPM with Cubics, down from $0.43
  • ersingencturk is seeing $0.04 CPM with AdSense

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