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2008 Consumer Internet Predictions December 3, 2007

Posted by jeremyliew in 2008, ad networks, advertising, casual games, Consumer internet, games, gaming, mmorpg, predictions, semantic web, social media, social networks, structure, user generated content, video.

Last year I made some predictions about the consumer internet in 2007 and they were at least directionally correct. So let me take a crack at 2008. Regular readers will not be surprised at some of my predictions as they are themes that I’ve been talking about for some time. Later in the week my colleagues will take a crack at predictions for Mobile, Infrastructure and Cleantech.

1. Social Media advertising, Online Video advertising and In-Game advertising start to become scalable.

Social media, online video and games are at early stages of development as advertising vehicles. Even more than the internet at large, a disproportionately small percentage of advertising dollars are being spent on these three media relative to time spent. Some people have even questioned if social media will be a media business at all, or online if video is a good way to monetize.

The slow start is because there are no standards yet in any of these media. If an advertiser wants to buy TV advertising across NBC, CBS, ABC and FOX, they can buy a common unit, the 30 second spot. If she wants to buy print advertising across Time, Fortune, Forbes, Newseek and Businessweek, she could similarly buy a common unit (e.g. a full page ad). But to buy across YouTube, Metacafe and Break, or across Myspace, Facebook and Bebo, or across GTA, Wild Tangent games and Pogo.com games, she needs to buy custom ad units in each property. This makes ad sales look more like business development – she is negotiating not just price, demographics and reach, but also what the actual units are. This is what makes new forms of advertising so hard. All three industries need ad unit standards to be able to scale. Otherwise they will be trapped by demands for customization.

This year, standards will start to emerge in each media. Some candidates for standards include (i) for social media; behavioral targeting, content targeting, demographic targeting or social ads, (ii) for online video; contextual targeting, overlays or pre-roll and (iii) for in game advertising; rich media or product placements. I don’t know which of these candidates will become standards, but I am confident that we will start to see growing support from both advertisers and publishers for the more successful units.

Ad networks will also gain share in each media, helping make the process of both buying and selling advertising easier.

Viewed through this lens, Facebook’s recent Beacon launch and subsequent adjustments are simply early moves towards figuring out what will be the native social media standard.

2. Structured web emerges.

The last couple of years have seen an explosion of user- generated content, across blogs, social networks, social media sites and user reviews. Previously, when most web content was created by editors, there was good structure and metadata around it. As most of the user- generated content has been unstructured, there has been an overall decrease in the level of structure, and hence a decrease in the ease with which people and computers can access and use this data.

But Meaning = Data + Structure. Search on user-generated sites has not been a great experience so far. This year we should start to see some point solutions emerge to help add structure to unstructured data, substantially improving the user experience. This will include both explicit (user-generated structure) and implicit (inferring structure from domain knowledge or user behavior) methods.

3. Games 2.0

Tens of millions of users are now using casual immersive worlds and playing MMOGs. These sites are some of the stickiest on the web, resulting in some of the highest levels of time spent per month online, and indicating that this is becoming a primary form of online communication for some users. Many of these users skew young, and if you believe that demographics is destiny, then you will expect this behavior to spread. The social aspects of these games is key to their popularity

Even more people are playing casual games online. These people often don’t have the ability to commit the time that MMOGs demand. They want to play with their friends, but instead of spending hours online together, they want to do it on their own schedule and in bite sized chunks.

These trends are likely to come together in asynchronous multiplayer games.

Other key drivers of growth for these products will include innovation in business models (free to play, ad- based and digital goods- based models) and channels (in- browser gaming, mobile, widgets).

Note – this post is cross posted to Venturebeat.


1. Danny - December 3, 2007

Nice post, looking forward to seeing how it plays out next year.
When you refer to structured web, do you see existing companies making their data more structured or outside companies providing solution for sites with UGC?

2. Michaela - December 3, 2007

Do you think we’ll get a structured web…or tools and technology to deal with the unstructured nature of the new web? The effect might be the same for users, but a different implementation.

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4. links for 2007-12-04 « David Black - December 4, 2007

[…] 2008 Consumer Internet Predictions – Lightspeed Venture Partners Blog “Last year I made some predictions about the consumer internet in 2007 and they were at least directionally correct. So let me take a crack at 2008.” (tags: internet media technology trends predictions) […]

5. Kartik Agaram - December 4, 2007

> Last year I made some predictions about the consumer internet in 2007 and they were at least directionally correct.

Any comments on the developments in 2007 that surprised you the most, that you wouldn’t have predicted in a million years?

6. Darren Herman - Marketing, Advertising, Media and Technology Blog » Blog Archive » links for 2007-12-04 - December 4, 2007

[…] 2008 Consumer Internet Predictions « Lightspeed Venture Partners Blog Let the predictions beging. Gaming oriented, I like it. (tags: trends predictions forecasts internet games technology) […]

7. Andreas Swahn - December 5, 2007


Great article. Seems as if you have been looking at our company Studentis Group (http://www.studentis.com), which is one of Europe’s fastest growing consolidators of the social media space.

We deliver what each of your three suggestions offer:

1. Social media advertising based on demographic, psychograpics or geo-targeting
2. Structured web by providing focused or local sites based on user-generated content
3. Games 2.0 through or casual gaming site Skoore.com which has a highly viral effect as it has a few unique challenge functions and a community around the gaming experience.

Let me know if you are looking at European investments. 🙂

I completely agree in your assessment for 2008 and would also like to add that we will see a strong focus from sites offering “one-size-fits-all” to “local-for-me” as a strong trend.

Best regards,

Andreas Swahn, CEO Studentis Group

8. 2008 Enterprise Infrastructure Predictions « Lightspeed Venture Partners Blog - December 5, 2007

[…] 2008, datacenter, enterprise infrastructure, flash, virtualization. trackback Following up on our consumer internet and mobile predictions, my partner Barry Eggers looks into the crystal ball for 2008 to draw some […]

9. jeremyliew - December 5, 2007

@ Danny and Michaela, I’m not sure – I suspect a bit of both!
@ Kartik, I didn’t see the move to open platforms coming at all.
@ Andreas, I’m afraid I’m not familiar with Studentis. Feel free to email me an executive summary!



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11. Ghetto Gates - December 14, 2007

Let me be the first to show you that 2007 ends off with social media advertising at blipd.com. It’s the only friend to friend video marketing system in the world.

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[…] Lightspeed Venture Partners – 2008 Consumer Internet Trends […]

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14. Jon Seymour - January 29, 2008

Online video advertising in 2008. The most powerful revenue model in web video advertising is going to be original video commercial placement in local search engines. This model avoids preroll, postroll, and side placement and allows for total relevance for the consumer. Value is emphasized for the advertiser through dramatic improvements in click-through rates once the searching consumer has seen its video. Such a system is already on display at getfave.com, I hope everyone will take a look! Thanks, Jon Seymour, CEO, Fave Media Inc., Chicago

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16. Mobile Internet - March 26, 2009

the growth of broadband subscribers and users in Indonesia are still very lucrative. Indonesia continues to be in the top position for mobile internet usage, second only to Rusia. Mobile (data) usage in Indonesia is big. About 5.4 million registerred users.

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