Mary Meeker is a legendary investment-trend predictor, and her latest slide deck is another high-level look at trends in the tech industry. One of her deepest looks is at the online advertising industry, which was $116 billion last year.
That's a large number, but when you consider Google (NASDAQ:GOOG) derived the vast majority of its $60 billion in revenue last year from online advertising, you can see how dominant the company is in capturing revenue in the space. Among major online ad companies, the per-user breakdown looks like this: Google, $45; Facebook (NASDAQ:FB), $7; Twitter (NYSE:TWTR), $3.24.
Advertising was up 16% last year, and it's been up roughly 15%-20% for each of the past four years, which is a fantastic growth rate. For both Twitter and Facebook, the opportunity and challenge is that while desktop advertising is 22% of U.S. spend, mobile still stands at just 4% even though it accounts for 20% of consumer time spent with media. With both companies seeing their user base shift mobile, that'll help close the revenue per user gap with Google. Yet the largeness of the gap helps explain why Twitter investors have been so scared by slowing user growth in recent quarters. You need a massive user base to justify a $20 billion market cap if you're collecting sales of just a few dollars per user each year.
In the following video, Motley Fool tech analyst Eric Bleeker and Max Macaluso discuss Meeker's analysis and the potential continued growth of the mobile-ad industry.