As we pass the midpoint of 2011, it’s time to start making a few predictions about the year to come. So keep an eye out for these developments over the next 18 months. If we’re right, be sure to give us credit. If we’re wrong, just act like this post never happened. Here are our thoughts…
Prediction #1: Apple or a new player will make a splash in the search engine market. Current search engine technology, although thorough and expansive, tends to be lacking in smarts. How many times have you searched for a page or link that you know for sure is out there, and despite your best efforts of crafting your key words, Google or Yahoo can’t find what you are looking for? Sometimes, unless you know the exact context of a sentence, in correct word order, you just can’t find it. And that leaves room for improvement.
This is not a knock on Google, Yahoo! or Bing, per se, but rather just an observation that there is room for another generation of search engine and somebody is going to do it sooner rather than later. However, we expect the next-generation search engine will sacrifice speed for intelligence. By this we mean that it is likely the newer generation may crank for 20 seconds to find what you are looking for, but the slower speeds will be more than compensated for by the better, more relevant results. New search engine technology will take the market by storm because of more useful content.
The reason why we suspect Apple might solve this puzzle is that Steve Jobs has a habit of leap frogging technology and bringing it to market. Google has grown by acquisition and not so much by innovation. If not Apple, then it might also come out of left field at some graduate research lab. Regardless, we think it will happen.
Prediction #2: There will be a tumble in the social networking and search engine stock bubble. The expectations for advertisement revenue will not pan out. Placement ads are just too easy to ignore on the Internet. These sites do not have the captive audience of the super bowl, and advertisers are starting to figure that out.
There will be price pressure on the content sites and search engine sites to lower costs to attract advertisers as they actually start to measure and go public with their returns on advertising investment. There will be quite a bit of pressure to hide this fact in the media, as there is now, but at some point content advertising revenues ROI will bare this out.
We are not predicting a collapse in this market, but just some major adjustments to valuations. This is based on our six years of experience placing online ads. Prices have gone up and results were never there to justify cost.
Related Article: Facebook Valuation Too High
Related Article: Demand Builds for TV Ad Time
Prediction #3: Fuel prices will plummet as the Chinese and Indian economies cool down.
Although oil production and exploration is flat in the US, every other country around the world is picking up exploration and exploiting new reserves. The market will be flooded with oil by mid or late 2012, sending the price of gasoline back down to $2 or below.
Prediction #4: There will be a new resurgence in urban mesh networks.
Why? These things really do enhance economic activity. The initial round of municipal mesh networks was a learning experiment with some limited success and way too much inexperience in sourcing providers.
The real reason for cities to invest in these networks will be the growing monthly fees with 4G devices that traditional providers are charging to cover the cost of their larger networks. Users will gravitate toward areas where they can switch over to free wireless. A well-covered downtown or small city with free wireless service will be a welcome island for business users and consumers alike. Think of it like a stepping inside a circle where you can make free unlimited long distance calls while the rest of the provider networks gouge you when step outside.
We’ll see how these predictions pan out. As always, feel free to share your thoughts on our predictions, or some predictions of your own, in the comments section below.
In a related article, the WSJ reports Wi-fi is the largest provider for Mobile Devices such as the iPhone.