A VC - Latest Comments in More Globalization Thoughts

Re: More Globalization Thoughts

atish babu — Mon, 04 Aug 2008 00:32:44 -0000

fred, agree that revenue/user is a more important metric to look at when evaluating global internet opportunities, a lot of money has been and will be lost in India and China as people try to invest in geography arbitrage (read Indian and Chinese companies copying US businesses) because the revenue is not there to support those businesses scaling, there are few strong global consumer Internet plays in India, on the other hand there are quite a few US companies that can expand overseas but in those cases they need to conquer the US before moving to other areas because the US is the lower hanging fruit for those companies

Re: More Globalization Thoughts

Nicole Simon (Berlin, Germany) — Fri, 25 Jul 2008 17:49:31 -0000

I found interesting reports by country under http://www.buyusa.gov/home/ :)

Re: More Globalization Thoughts

fredwilson — Wed, 23 Jul 2008 05:10:04 -0000

That's great

Thanks

Re: More Globalization Thoughts

fredwilson — Wed, 23 Jul 2008 04:58:06 -0000

Thanks!

Re: More Globalization Thoughts

fredwilson — Wed, 23 Jul 2008 04:27:05 -0000

Do they give a percent breakdown?

Re: More Globalization Thoughts

LivePaola — Wed, 23 Jul 2008 02:33:39 -0000

For Europe, IAB Europe has some (admittedly rough) figures about online advertising revenue per capita, from €133.2 in Norway to €36.9 in Italy (2007) (some of the data here:http://bit.ly/37UKSS). That is not the total revenue pool, but a pretty good proxy - more developed commerce, gaming, subscriptions etc. markets tend to be more developed advertising markets as well.

Re: More Globalization Thoughts

aside — Wed, 23 Jul 2008 00:26:47 -0000

Couple of things to look at other then revenue/user:

*disposable income --- this provides a glimpse of where their will be meaningful ad growth which is the core revenue driver of the Internet. As long as people have money to burn advertisers will want to get in front of them.
*two markets within one: within some of these markets there are really two markets -- take Israel or India where there is an upper middle class forming whose Internet habits are very similiar to those we see in the LA, London, or Seoul, but in an nearby city or even adjacent neighborhood the market is more similiar to a 3rd world country.

Re: More Globalization Thoughts

Erik Sherman — Tue, 22 Jul 2008 21:29:45 -0000

I guess that the URL would be helpful:

http://industry.bnet.com/te...

Re: More Globalization Thoughts

Erik Sherman — Tue, 22 Jul 2008 21:28:43 -0000

I posted something on the BNET technology blog that you mgiht find interesting - some points I got from recently talking to IDC about their regular Internet demographic studies.

Re: More Globalization Thoughts

Andy Freeman — Tue, 22 Jul 2008 18:12:31 -0000

Yahoo says that it gets most of its revenue from outside the US.

Re: More Globalization Thoughts

Steve Kane — Tue, 22 Jul 2008 17:52:12 -0000

Hi Fred. Hope you are enjoying travel.

Your points/issues raised are not really affected, but here's some world internet/broadband usage data that is amalgamated from multiple sources, so is a little different from comscore

http://www.internetworldsta...

Re: More Globalization Thoughts

PhilipJames — Tue, 22 Jul 2008 15:41:08 -0000

Ed - certainly in some markets. We know wine, and due to a whole slew of complex interstate laws Europe is way ahead with online wine sales. The US began deregulating interstate shipping in 2005, so its interesting to see how fast it catches back up.

Glad to see people looking at data deeper than top level subscriber details.

Re: More Globalization Thoughts

fredwilson — Tue, 22 Jul 2008 12:30:08 -0000

yup

Re: More Globalization Thoughts

Kyle S — Tue, 22 Jul 2008 12:18:38 -0000

Not an econ student (any more), but took a quick look at this. I combined the TechCrunch data on internet users and ad spend per country, then combined that with per capita GDP. There was not a lot of correlation. For instance, Brazil's 2007 per capita GDP is lower than Mexico's, yet ad spend per internet user was twice as high in Brazil than in Mexico. Now, per capita GDP has total population in the denominator, not internet population, so that could be skewing results, but I wouldn't bet there are significant differences in internet penetration between France and England -- certainly not as significant as the difference in interactive ad spend per user.

When I have a little more time this afternoon, I'll throw my data up on a Google spreadsheet for everyone to look at & critique.

Re: More Globalization Thoughts

Michael F. Martin — Tue, 22 Jul 2008 12:08:55 -0000

I'd like to see the numbers for Asia broken out by country. A while back, I remember reading that South Korea is the most connected nation on the planet. I would expect more Internet innovation to be coming out of there as a result.

Re: More Globalization Thoughts

shel Israel — Tue, 22 Jul 2008 12:05:01 -0000

Dollars can throw off your calculations. In China $50 K seems like a very significant Series A investment. In Silicon Valley, it's lunch money. I would also wager there are US-based companies with over half its users out of the country. Your own Twitter, I'll wager, has close to the same number of users in Asia that it has in the US.

Re: More Globalization Thoughts

fredwilson — Tue, 22 Jul 2008 11:41:15 -0000

I'll check out the links

Thanks for posting them for me and everyone else to see Nik

Re: More Globalization Thoughts

fredwilson — Tue, 22 Jul 2008 11:40:12 -0000

Korea is on par with the US for sure

As is Japan

Or close to it

But the rest of asia is not

I really would love to see the data

Re: More Globalization Thoughts

fredwilson — Tue, 22 Jul 2008 11:39:07 -0000

Not really because there are some very large commerce businesses in a number
of countries that don't have large media businesses

Re: More Globalization Thoughts

Leonard Boord — Tue, 22 Jul 2008 11:07:13 -0000

I have used Google Adwords Spend to extrapolate market size. Adwords has three drivers, the numbers of companies that advertise, the average CPC and the total revenue line. We own several websites in LATAM and use these as guide lines. We have obtained them from different conferences we have attended.

Re: More Globalization Thoughts

Andrew Fogg — Tue, 22 Jul 2008 08:03:00 -0000

I just went digging for this as well. See the TechCrunch article first.

Re: More Globalization Thoughts

howardlindzon — Tue, 22 Jul 2008 08:01:11 -0000

very helpful numbers - thanks.

makes me a little more confident in canada

Re: More Globalization Thoughts

Ed Freyfogle — Tue, 22 Jul 2008 08:00:54 -0000

Agree. Average cost per click on AdWords is probably the simplest proxy. By that metric I believe many parts of the EU (especially the UK) are ahead of the US.

Re: More Globalization Thoughts

togilvie — Tue, 22 Jul 2008 07:33:31 -0000

I'd think the average effective CPM in search advertising would be the best proxy for revenue per user.

Re: More Globalization Thoughts

Seenator — Tue, 22 Jul 2008 07:14:04 -0000

Fred,

I thought PwC and TC did some work around this. Is this approx what you were looking for?
http://www.techcrunch.com/2...
http://www.pwc.com/images/o...

More thoughts on the same vein here:
http://andrewchen.typepad.c...
http://andrewchen.typepad.c...