Lou Kerner@loukerner

Wall Street’s View on Social Media

People With Real Klout

Facebook Is “The Second Internet”

FB Technology “Step Functions”

• Feb 2004 – Facebook Introduced at Harvard

• Sept 2005 – Newsfeed introduced

• Sept 2005 - Massive user uproar

• May 2007 – Facebook open up API

• April 2008 – FB passes MySpace

• 2011 – Pace of innovation accelerating

FB Utility – The Social Layer

• Audience/Data Aggregation – 600mm+

• The Internet Passport – Social Sign On

• The Internet’s Ad Network

Social Ads Are Proliferating on FB

Social Ads Are Highly Impactful

The FB Social Layer

• Audience/Data Aggregation – 600mm+

• The Internet Passport

• The Internet’s Ad Network

• The Internet’s Wallet

• The Internet’s Deal Platform

• Social Search

Facebook is Driving Massive TrafficThe More Social the More Traffic

Source: Alexa, Oct. 2010

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

YouTube Yahoo Tw itter MSN

% o

f T

raff

ic F

rom

Sit

e

Google Facebook

Facebook is Driving Massive TrafficThe More Social the More Traffic

Source: Alexa, Oct. 2010

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

Amazon eBay Groupon LivingSocial

% o

f T

raff

ic F

rom

Sit

e

Google Facebook

The Social Media FrameworkFor Brands

Rapid Fan Page GrowthFacebook Fans

August Janaury CAGRYouTube 11,370,000 25,897,000 721.1%Coca-Cola 10,524,000 21,817,000 575.3%Starbucks 12,642,000 19,161,000 271.3%Oreo 8,562,000 16,322,000 470.4%Disney 5,711,000 15,976,000 1180.9%RedBull 7,701,000 14,836,000 482.4%Skittles 8,502,000 14,779,000 377.0%MTV 3,710,000 14,055,000 2445.1%Converse 4,741,000 12,334,000 992.1%V's Secret 6,238,000 11,048,000 394.3%

Total 79,701,000 166,225,000 583.7%Avg. Mo. Change 17,304,800

Innovation - Sponsored Stories

Status Updates

Become Advertisements

Local Businesses Leverage Facebook

Top 10 Facebook Fan Page Categories

Local Business , 17.6%

Interest , 10.6%

Musicians , 6.5%

Company , 6.3%

Public Figures, 5.9%

Nonprofit , 3.4%

Products Other , 3.0%

Music , 2.6%

School , 2.5%

Websites , 2.3%

Facebook Open Graph Available Data1 About Me Biographacial information input by the member2 Activities Activities noted by the member like reading or sleeping3 Birthday Day, month and year of birth4 Check Ins Where the user has checked in via Facebook Places5 Education Educational institutions attended6 Events Events posted on Facebook that have been RSVPd to7 Groups Facebook Groups that the member has joined8 Hometown Hometown as input by the member9 Interests Interests highlighted on Facebook like music or movies

10 Likes Includes everything a users has indicated they like by hitting the like button on Facebook or other websites

11 Location Information regarding current location if given12 Notes Notes the user has created on Facebook Notes13 Photos Photos the member has uploaded14 Photos tagged Photos the member has been tagged in15 Relationships Family and personal relationships noted16 Videos Videos the user has uploaded17 Website Webiste indicated as belonging to a user18 Work History Where the member has indicated they have worked19 Contact information Current address and mobile phone number

How Concerned Are You About Privacy on Facebook

41.2%44.9%

13.9%

36.0%

49.9%

14.1%

0%

20%

40%

60%

Not at all Somew hat Very

Sept '10 Nov '10Wedbush Securities Survey of 2,500 U.S. consumers

Like = Social Search Today

Social Media Advertising - Attribution Thru The Funnel

Source: Efficient Frontier

Facebook Shares Trading at $76B

$0.0

$10.0

$20.0

$30.0

$40.0

$50.0

$60.0

$70.0

$80.0

$90.0

Aug-09

Sep-09

Oct-09

Nov-09

Dec-09

Jan-10

Feb-10

Mar-10

Apr-10

May-10

Jun-10

Jul-10

Aug-10

Sep-10

Oct-10

Nov-10

Dec-10

Jan-11

(in

bill

ion

s)

What Are The Risks To Facebook?

Zynga’s Cityville Is Already A Metropolis

0

20

40

60

80

100

120

1 2 3 4 5 6 7

Weeks From Launch

MA

Us

(in

mil

lio

ns

)

Cityville Frontierville

Twitter Is Growing Exponentially

LinkedIn

The Open Graph 25

Internet Data Collectors

# Collector Type (Primary) % of Requests1 Google/DCLK Ad Server 16.5%2 comScore Measurement 14.1%3 Quantcast Measurement 8.0%4 Facebook Utility 4.4%5 Microsoft Ad Server 2.1%6 Yahoo Exchange 2.0%7 AOL Ad Network 1.7%8 Tynt Utility 1.7%9 Audience Science Ad Network 1.6%

10 Rubicon Yield Optimizer 1.6%

Source: Krux Digital

The Valley’s down on Google Search

People Are Happy With Search

Source: Rasmussen Report, Jan. 2011

Social Sign On (SSO) Share

Source: Gigya

Lou Kerner on Quora via Google

Google’s Boutiques.com

Battleground – Mobile OS

Source: Morgan Stanley

Battle Grounds – Browser

Dec '09 Dec '10 CAGRBrowser

IE 62.69% 57.1% -8.9%Firefox 24.61% 22.8% -7.3%Chrome 4.63% 10.0% 115.6%Safari 4.46% 5.9% 32.1%Opera 2.40% 2.2% -7.1%Other 1.21% 2.0% 66.1%

Battleground – Search

Comparing The BubblesVC Funding

$0

$20

$40

$60

$80

$100

$120

2000 2010

To

tal F

un

din

g (

Bill

ion

s)

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

Dea

ls

We’re Still In The First Inning of the Rise of Social Media

Live It

Slideshare.net/loukerner

VC Funding of Facebook Focused Social Media Companies in 2010

$65.2

$337.3

$7.8

$102.1

12

8

5

14

$-

$50.0

$100.0

$150.0

$200.0

$250.0

$300.0

$350.0

$400.0

Q1 Q2 Q3 Q4

Fu

nd

ing

Am

ou

nt

(Mill

ion

s)

0

2

4

6

8

10

12

14

16

Nu

mb

er o

f F

inan

cin

gs

VC Funding of Social Media Companies in 2010

$291

$457

$108

$819

61

39

57

45

$-

$100

$200

$300

$400

$500

$600

$700

$800

$900

Q1 Q2 Q3 Q4

To

tal Q

uat

erly

Fu

nd

ing

0

10

20

30

40

50

60

70

Nu

mb

er o

f F

inan

cin

gs