NEW YORK (TheStreet) - For tech sector investors, Kleiner, Perkins, Caufield & Byers (KPCB) annual 'Internet Trends' report is required reading and gives insight into the most clear trends running through the technology sector from one of the largest venture capital firms in the world.
KPCB's report, at 164 pages in length, is packed with data-filled slides, and is exhaustive and runs through a gamut of trends in the mobile, video, analytics, social networking, application, advertising and hardware markets. As with each years' report, KPCB's 2014 study shows some clear trends that should be studied by investors in some of the most commonly held tech stocks such as Facebook (FB), Apple (AAPL), Google (GOOG), IBM (IBM), Twitter (TWTR) and Microsoft (MSFT).
Other trends identified by KPCB may be highly relevant to recent or soon-to-be IPO'ed Chinese e-commerce and advertising behemoths like JD.com (JD), Baidu (BIDU), Weibo (WB) and Alibaba, while also proving relevant to U.S. based commerce firms such as Amazon (AMZN) and eBay (EBAY).
Below are a handful of slides to look over from KPCB 's Internet Trends 2014 report:
Facebook's Immediate Future
KPCB highlights the rise of social sharing on networks such as Facebook, Twitter, YouTube, and Instagram, however, investors may be struck by how that social activity may be translated into profits for some of Silicon Valley's biggest companies. It was not long ago, people wondered aloud whether Facebook or Twitter would eventually charge users to participate in their networks.
With the public disclosure of both Twitter and Facebook's earnings, it is now evident the social networks stand to benefit most from growing usage on their networks and building tools to create targeted and data-filled advertising and marketing platforms with that data.
Facebook appears to be at the forefront, as TheStreet has reported. By using back-end user activity to help advertisers target campaigns on 'the social network,' Facebook appears poised to disrupt the advertising industry, creating durable earnings that may help Mark Zuckerberg continue to also identify long-term investments for the future.
The below slides give insight into Facebook's opportunity in the analytics, advertising and marketing markets. Competitors such as Twitter, Google and LinkedIn (LNKD) also stand to benefit.
We Watch More TV and Less TV
TV may be dying before our eyes, but video is the future for advertisers, in addition to cable and wireless infrastructure giants.
For nearly a decade, pundits have argued over the so-called cutting of the cord, whereby over-the-top video offerings could replace pay TV packages, potentially creating a headache for cable and satellite giants such as Verizon, AT&T, Comcast and DirecTV.
As the industry consolidates, those fears now seem slightly beside the point. Old cable monopolies, duopolies - or whatever -- will remain the gatekeepers to media content. Still, user habits are in the midst of dramatic change.
The millennials may be the first generation in the U.S. that doesn't aspire to buy a monthly cable package. Instead, video has become readily accessible through broadband and wireless infrastructure and through an increasingly easy-to-use ecosystem of applications and devices.
Instead of fighting for the last dollar from pay TV bundles, wireless and broadband providers are now in the process of building business models that will benefit from rising video usage, even if cable bundles are eventually broken.
Those who are ahead of the curve or are in good financial stead such as Verizon and Comcast appear poised to benefit. Risks may emerge for traditional cable content giants such as Disney, Time Warner, News Corp and Discovery Communications.
The Rise and Rise of China
Look U.S. IPO market activity in 2014, and it is evident the Chinese e-commerce market is on the verge of a transformation that could put it level or ahead of developed economies within a decade.
Firms such as JD.com, Alibaba and Baidu all appear positioned to benefit from the rise of the Chinese consumer, and their mobile-first spending and banking habits. If the likes of Alibaba prove successful in their U.S. listings, it may cause some to wonder whether U.S. e-commerce giants such as Amazon and eBay are poised for a hit.
As with much of what has happened with the rise of emerging economies like China and India, it is unlikely the e-commerce market will prove a zero-sum game. Below are a few slides that detail the interplay between U.S. and Chinese e-commerce.