Internet 2006 and beyond
Article Date: Apr 13 2006
The surprise package
Perhaps the really unexpected category amongst the winners has been search engines. Google’s share price has gone up by 200 per cent since float and, despite a recent share price dip, is still capitalised at $102 billion. This is extraordinary since there were already a number of very well established competitors in the same space – Yahoo and Microsoft to mention just two.
But Google’s business model, based on businesses paying for priority in a particular listing category, has been the key factor that removed banner adverts and clicks-per-view revenue models from the equation and replaced it with something that really made money. After porn, the next best thing!
In fact search engines have almost caught up with email as the leading internet application with 60 million daily users versus 72 million for email.
The final phenomenon has been the growth of professionals who make their living directly from the web. EBay has tens of thousands of individuals who just make their living by trading on the platform. And a significant number of players on poker sites are also professional full-time gamblers.
Crystal-ball gazing
In the future, first I am sure there will be a rise in governmental regulation, censorship and taxation relating to the web. The Chinese government, for example, blocks a long list of websites and phrases from its 100 million internet users. And there are continued rumblings in the US about regulating the online gambling industry.
This, in turn, will lead to a whole new industry trying to get round the regulations and censors, located in places like the British Virgin Islands and Anguilla.
Next, I see a gradual deflation in the cost of desktop software. Open source software such as Linux is part of an inexorable movement leading to greater richness of web functionality. This in turn will lend great momentum to the process whereby software is delivered remotely on the web. The old and discredited ASP acronym is being replaced by software as a service (SAAS) – to you and me, what Salesforce.com are doing now.
Finally, communities – people creating their own content about particular interests or hobbies – will become increasingly easy to do and, if the current trend persists, present a massive growth opportunity.
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Michael Jackson is chairman of Elderstreet Investments, the leading technology venture capitalist which he founded in 1990. He is also chairman of Sage, the FTSE-100 accounting software group which he has been closely involved for more than 20 years, since its unquoted days. He has recently been appointed as chairman of PartyGaming, the largest online poker business in the world.
