The PC has long been associated with bringing the Internet to new audiences, but that perception is changing. These days, the world’s unconnected billions are being introduced to the Web on their mobile screens.
According to the International Telecommunications Union, there were 1.6 billion mobile Internet users at year-end 2012, up from 1.2 billion a year prior.
The mobile Internet is scaling incredibly fast. It took the desktop-based Web 18 years to reach 1.6 billion users.
The ITU forecasts there will be 2.1 billion mobile Internet users in 2013, or 71% of the total global Internet population.
Since mobile phones are one of the most widely deployed technologies in history, it makes sense that mobile will start driving global Internet penetration, which currently stands at 36%.
In some countries this is already happening. In China, for example, there are now more mobile Internet than broadband users.
As Google CEO Larry Page argued on the Charlie Rose Show, mobile phones connected to the Internet are going to be “most people’s first computer.”
Here’s a look at total Internet penetration:
The Reason Larry Page Doesn’t Want Googlers Thinking About The Competition Is Pretty Inspiring (GOOG)
During an interview with Fortune’s Miguel Helft, Google CEO Larry Page is transparently reluctant to talk about who he thinks is Google’s competition.
Helft asks him: “Is it Siri? Is it Amazon or commercial queries?”
Page tries to dodge the question, saying: “I don’t really think about it that way.”
Helf presses: “Because you don’t think about competition?”
And then Page drops this doozy, which is pretty inspirational for people in the tech industry:
“Obviously we think about competition to some extent.”
“But I feel my job is mostly getting people not to think about our competition. In general I think there’s a tendency for people to think about the things that exist. Our job is to think of the thing you haven’t thought of yet that you really need. And by definition, if our competitors knew that thing, they wouldn’t tell it to us or anybody else. I think just our strengths, our weaknesses, our opportunities are different than any other company.”
(Of course the truth is that lots of Googlers do think about the competition, and when they do, it’s mostly about Amazon lately. The reason: Google makes its money from commercial web searches, and increasingly people are just going straight to Amazon.com for that.)
Under Larry Page the stock is up 15%, which is somewhat surprising because Page is not exactly favorable to Wall Street, or investors.
In fact, Page’s actions as CEO have been somewhat hostile to investors. He split Google’s stock giving himself even more power. Google is releasing all sorts of new, weird products like Google Glass, and self-driving cars. Investors tend to frown on these odd ball products.
So, what’s working for Google? Well, it’s not Facebook. And it’s pretty evident Facebook’s ad sales aren’t coming at the expense of Google’s. Perhaps that’s helping propel the stock forward.
That’s up from from 83 million users in the first quarter, a 23 percent increase. There are no statistics from prior quarters, unfortunately, but it’s reasonable to think that the number has been growing at a similar rate from a small base.
Facebook added 54 million new monthly active users last quarter. It appears that 35 percent of those users are mobile-only.
This trend will only accelerate over the next few years. As Google CEO Larry Page recently argued on the Charlie Rose Show, mobile phones connected to the Internet are going to be “most people’s first computer.” This is especially true in the developing world, where mobile offers a compelling solution to affordable internet access.
This does not mean that Facebook’s revenues “could plummet” if they don’t figure out how to ramp up mobile advertising, as TechCrunch argues, but it hurts its ability to generate that massive revenue bump that everyone has assumed is just around the corner.
As we discussed last week, Facebook is currently generating mobile ad revenue at a $180 million annual run rate from the mobile version of its Sponsored Stories product, which injects advertiser-selected posts into users’ news feeds. That number represents only 33 cents per mobile monthly active user per year (or ~8 cents per quarter), which is leagues below its current average revenue per user, or ARPU. It will undoubtedly rise as deployment increases or Facebook can demonstrate their value.
While there has been some positive evidence of Facebook’s mobile ads’ effectiveness, it hasn’t proven they are a silver bullet either. But if the developing world comes online increasingly mobile-only, it will hinder the company’s ability to maximize revenue out of its newest users.
When is Google going to admit the obvious?
Google+, the “social spine” of CEO Larry Page’s counterattack on Facebook, is a flop.
RJ Metrics selected 40,000 Google+ users at random. It then analyzed their public posts.
What they found is that a lot of people start sharing on Google+, then stop. 3 out of 10 made a single public post, then never posted again. Even among people who made five posts, 15 percent had stopped posting.
RJ Metrics said this “decay rate” was disturbing.
Other analysts have found that people spend an average of 3 minutes a month on Google+, versus 7 hours on Facebook.
Now, it’s possible that many Google+ users are not posting publicly and are sharing privately instead, as Google+ allows. That’s Google’s timeworn excuse when asked about Google+ engagement. But Google has refused to give clear statistics about activity on Google+.
“Google is just refusing to answer the question for its own reasons, which is probably because Google+ has far less activity as a standalone social network than either Facebook or Twitter,” wrote Google expert Danny Sullivan recently.
It sounds a lot like Amazon Prime, Amazon’s $79-per-year service that offers fast shipping and other benefits.
The Wall Street Journal first reported the service, and confirmed that Macy’s had been approached by Google to participate.
The next-day shipping will apparently be combined with Google Product Search, which today lets users find products and compare them across different e-commerce sites to get the lowest price. When people buy a product from one of the sites after finding it on Google Product Search, they’ll get an offer for one day shipping for a low fee, the Journal says.
Google won’t be running an e-commerce site or stocking products in warehouses like Amazon does, but will instead create a system that figures out which retail partner’s stores are nearest to a customer and have the product in stock. Then it would team up with UPS and local couriers for delivery.
Still, e-commerce fulfillment is a pretty big step removed from Google’s core mission of organizing the world’s information. Lack of focus has been a problem for the company, and CEO Larry Page has killed a lot of non-core products this year
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Dr. Augustine Fou is Digital Consigliere to marketing executives, advising them on digital strategy and Unified Marketing(tm). Dr Fou has over 17 years of in-the-trenches, hands-on experience, which enables him to provide objective, in-depth assessments of their current marketing programs and recommendations for improving business impact and ROI using digital insights.
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