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James Wang @jwangARK
, 6 tweets, 2 min read Read on Twitter
1/ As we head into earnings season, here is my latest think piece on the state of internet advertising and how it can grow to $600B/year.
ark-invest.com/research/inter…
2/ Industry research firms have underestimated internet advertising for years. Every year they forecast deceleration. Yet growth sustains or *accelerates*. Zenith/eMarketer/Magna is once again forecasting growth slowing to single digits.
3/ Popular narrative that GOOG + FB is growing at the expense of smaller publishers is false. NYTimes, Snap, Twtr, Spotify, Zillow, heck even Meredith Media (magazines) is growing digital revenue >10% per year.
4. Internet advertising will continue to grow because it’s hands down the most effective and user friendly ad format. The best Facebook ads achieves brand+direct response objectives in a single step. Unprecedented utility and unprecedented pricing power.
5. Sustained growth of ~17% from 2018’s $280B base would result in internet advertising being a $600B industry—as large as the entire ad market today.
6. How do we get there? Taking a chunk out of TV, sure, but mostly through TAM expansion. Global ad spend/GDP is at a low point, a return to ~0.6% would get us there. /end
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1/ Most tech companies are horizontal platform companies, but a few exceptions stand out—Apple, Tesla and Netflix are all vertically integrated.
2/ Apple integrates hardware, SoC, OS, applications, services, and retail. Key advantage: ability to move in lockstep. New hardware capabilities are translated to sw and use cases immediately. No need to wait for 'adoption'. eg. 64-bit SoC/OS/sw.
3/ Tesla integrates manufacturing, battery pack design, hardware, OS, apps, AI chip, software, retail, supercharging. Key advantage: go-to-market speed, differentiation on 'use case' rather than specs. eg. long distance trips via supercharger.
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1/ No narrative is more tiresome and false than the idea that because companies are going public later, investors now have fewer choices and lower returns than a decade ago. It's the worst combination of hindsight bias plus laziness.
2/ First of all, it wasn't at all obvious that when the FANGs IPOed, that they would become the juggernauts that they are today. The IPO of Facebook/Amazon/Netflix/Google were just like any tech IPO today—filled with uncertainty and risk. Here's a brief survey.
3/ Facebook IPO in 2012 was met with tremendous skepticism. Many articles point out why you shouldn't buy: competition, it's a fad, no mobile story, terrible share structure, ridiculous valuation etc etc.
theguardian.com/technology/blo…
Read 8 tweets
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1/ Sorry to bore you with more tweets on internet advertising but since it's the primary source of funding for AI and hence the future of humanity, I have to cover this stuff. 😜
2/ Basically, all forecasts for internet advertising by fancy research firms (Zenith, PWC, eMarketer) are all underwater. At the beginning of the year they forecasted for 10-15% growth. It's going to be WAY higher.
3/ In Q1'18, GOOG grew 24%. FB grew 50%. They make up 80%+ of the Western market. The growth from these two alone will blow away the forecasts.

Unless there's a disaster, this year internet advertising will trivially reach $280B vs. Zenith's estimate of $230B.
Read 5 tweets

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When #Bitcoin’s coinbase reward drops to zero & miners are entirely supported by transaction fees, it’s unproven that the economics for miners will be sufficient to incentivize the security needed.
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(1)
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1/ Threading together my presentation from @coindesk's #ConsensusInvest this week.
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