More Than 20 'Billion-Dollar' Mobile Internet Companies

Includes: FB, TCEHY, TWTR, XLK
by: Tim Merel

Our research shows over 20 "billion-dollar" mobile Internet companies already (see Mobile Internet Investment Review), with extreme speed key to entering that exclusive club and agility critical to staying there in a continuously disruptive market.

Extreme first-mover advantage

There is a lot to play for in mobile internet, with forecasts of $700B revenue by 2017 and records of more than $47B M&A and $14B investment in the 12 months to Q2 2014. Our research of more than 20 "billion-dollar" mobile internet companies across sectors shows one common factor in joining that exclusive club: speed.

Mobile internet first-mover advantage is more extreme than in any other technology market in history, with a direct relationship between total value created and value created per year. First-movers have delivered unprecedented value at an unheard of rate, so dominating quickly is worth its weight in gold.

WhatsApp and Snapchat are poster children for this dynamic, delivering around $4B value per year to shareholders since their founding (WhatsApp in a $19B Facebook (NASDAQ:FB) acquisition, SnapChat reported $10B valuation). More than 20 companies have followed the same path.

Continuously disruptive competitive landscape

The billion-dollar mobile internet club operates across sectors (games, messaging, transport, productivity, social, music, navigation, mCommerce, utilities) and geographies (12 US, 9 Asia, 3 Europe). Continuous disruption is creating huge opportunity for growth, as well as significant risk of decline. The pyramid of consolidators is changing constantly, with today's growth companies becoming tomorrow's consolidators, and some former giants struggling to adapt.

Success without agility is high risk

Entering the billion-dollar club is difficult, but staying there is even harder. Some pivot beyond their initial success to greater heights, while others struggle to move beyond their legacy of success. There are former billion-dollar companies which have dropped out of the club, and others risk doing so.

Managing the risk of disruption requires agility and a willingness to eat your own lunch before somebody else does. This goes for major corporates like Tencent (WeChat) (OTCPK:TCEHY) and Facebook (WhatsApp), as well as insurgents like Twitter (NYSE:TWTR) (>80% mobile advertising revenue and $30B market cap).

Disclosure: None.

Editor's Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.