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Justin Hibbard
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April 25, 2005

Update from Mary Meeker

Justin Hibbard

Mary Meeker, Internet analyst at Morgan Stanley, spoke today at the Ad:Tech 2005 conference in San Francisco, and I chatted with her briefly afterward. Say what you will about the calls she made during (and after) the bubble, she still has an encyclopedic command of the Internet business. She blew through 50 data-packed slides in a 25-minute presentation. The overall tone was bullish (who goes to Mary Meeker for the bear case?), but all of her points were backed by meticulous research.

She led with a hailstorm of data points about growth of the global Internet business. One that stood out: 33 million registered Skype users. "We think Skype may be the most rapidly growing product from an acceptance standpoint the world has ever seen," Meeker said. Who knows if all those "registered users" are regular users. Still, pretty impressive for a 1.5-year-old product.

From there, she zeroed in on broadband penetration, noting that broadband subscriptions surpassed 25% of U.S. households last year. "When industries that are on a fast growth trajectory get into the 25% adoption curve point, going up to 50%, that is oftentimes the sweet spot of making money," she said. Morgan Stanley expects broadband subscriptions to grow from about 30% of U.S. households this year to 50% by 2011. "This should be the sweet-spot period for a lot of business development and innovation," she said.

After her presentation, I asked her about private companies she's watching. "One of the companies we're most interested in is TellMe," she said. "It is in the voice space, and it's about constant improvements in technology." (We mentioned TellMe as a likely IPO candidate in this Mar. 7 story, and investment bankers tell us it's one of the most sought-after companies in the Valley right now.)

These days, Meeker is spending a lot of her time studying China's burgeoning Internet industry. "If you look at the China Internet market, you have five companies that have $1 billion market caps," she told me. "There was a time when Yahoo, Excite, Infoseek, and Lycos all had $1 billion market caps. Two years from now, there won't be five companies with $1 billion market caps. Someone will break away. The companies are in a real battle right now." I asked which ones she's handicapping, but she demurred. Once bitten, twice shy.

07:48 PM

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Comments

Hi,

I am glad I came across this article because my father just signed up with Skype. I was hesitant because I did not know much about it but after reading this article, I will. It is great to see so much acceptance.....The formula is definitely working....Time will tell for me...

Regards,

Giselle

Posted by: Giselle at April 26, 2005 04:21 PM

Michael Lewis is not very complimentary to Mary Meeker in his book The Future Just Happened.

I wonder if Mary's creditability is shot since so many of the companies she hyped have bombed.

Posted by: gary grimmond at September 16, 2005 02:39 PM

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