15. March 2012–
The DST crystal ball – how to pioneer the digital frontier
Yuri Milner came to global fame in May 2009, when his company DST (Digital Sky Technologies), born from the Mail.ru group and assisted by Russian tycoon Alisher Usmanov, sank $200m into Facebook for a two per cent equity stake.
Since then, Milner has become synonymous for with a whole new investment philosophy, often offering higher than local investors, and eschewing boardroom positions and early IPOs in order to maximise the long-term stability of a company, with DST going on to fund Zynga, Groupon, Twitter, Spotify and AirbnB.
This leaked DST document takes that online experience and speculates on the digital landscape over the next five-ten years, pinpointing the growth areas and potentials for investors.
The DST digital crystal ball predicts
- 13% of all time spent online globally is on Facebook (23 billion minutes per day)
- Global internet users are set to double in the next 5-10 years
- 361m internet users in 2000. Close to 2bn today; $8bn worldwide advertising spent in 2000, $72bn in 2011 and global e-comerce valued at $680bn
- Opportunity for global internet users to reach 5bn in coming years
- Reach will grow faster than ever before and new companies can scale quickly through targeted marketing using social networks as a distribution platform
- There’s still a world of investment to be made: “Currently there are numerous high-growth private internet companies across the world that are highly profitable and cashflow positive”
- Expect more than 25 internet companies to be worth more than $25bn in the next five years
The key to these figures is that consumption and advertising spend are shifting massively to the internet. Content is user-generated and there are no physical advertising logistics. In a word, the internet is cheap with high profit margins, with many opportunities still ripe for the picking.
Milner makes much of the fact that information is going into overdrive – the amount of info from the dawn of civilisation until 2003 is the same as that produced every 48hours in 2010 and will be the same as that projected to be consumed every hour by 2020.