INTERNET TRENDS D11 CONFERENCE

5 / 29 / 2013 Mary Meeker / Liang Wu

Outline
• Key Internet Trends – Growth Continues • Re-Imagination – Being Re-Imagined & Uploaded • Mobile – Aggressive Momentum • Computing – Yet Another Platform Change… • Lots to Learn from China – Volume + Innovation • Most Enabled Entrepreneurs Ever? • So, You Want to Be a Public Company? • High-Skilled Immigration – Perspective • Appendix
– Re-Imagination is Alive & Well – Traditional Industries Being Re-Imagined – USA, Inc.
2

KEY INTERNET TRENDS – GROWTH CONTINUES

3

per CNNIC.2.473 2. China Internet user data as of 12/12.4B Global Internet Users in 2012* – 8% Y/Y Growth*.4B global Internet users and 8% Y/Y growth rate based on the latest available data.406 Y/Y Growth 10% 26 58 205 6 15 32 6 9 3 57 11 39 17 7 15% 8% Population Penetration 42% 11 23 55 49 30 35 45 37 78 68 38 54 47 35 34% 34% 4 Note: *All data (except China) as of 6/12.com. 2. Driven by Emerging Markets Rank 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Country China India Indonesia Iran Russia Nigeria Philippines Brazil Mexico USA Argentina Egypt Colombia Turkey Vietnam Top 15 World 2008-2012 Internet User Adds (MMs) 264 88 39 35 33 31 28 27 19 18 17 17 14 13 12 654 902 2012 Internet Users (MMs) 564 137 55 42 70 48 34 88 42 244 28 30 25 35 31 1. . internetworldstats. Source: United Nations / International Telecommunications Union.

Print includes newspaper and magazine. USA 2012 Time Spent % of Total Media Consumption Time or Advertising Spending 50% Internet Ad Mobile Ad = $4B* = $37B* Ad Spend 40% 42% 43% 30% 26% 20% 23% 14% 10% 6% 0% Print Radio TV Internet Mobile 22% 12% 3% ~$20B+ Opportunity in USA 10% Note: *Internet advertising reached $37B in USA in 2012 per IAB. $20B opportunity calculated assuming Internet and Mobile ad spend share equal their respective time spent share. % of Advertising Spending. 12/12. Source: Time spent and ad spend share data based on eMarketer (adjusted to exclude outdoors / classified media spend).Material Upside for Mobile Ad Spend vs. Mobile Usage % of Time Spent in Media vs. Mobile advertising reached $4B per eMarketer. 5 .

80% of Top Ten Global Internet Properties ‘Made in USA’… 81% of Users Outside America Top 10 Internet Properties by Global Monthly Unique Visitors.000 1. 2/13 Google Microsoft Facebook Yahoo! Wikipedia Amazon. 6 .com 0 200 400 600 800 Monthly Unique Visitors (MMs) 1. 2/13.200 USA Users International Users Source: comScore Global.com Apple Glam Media Tencent Baidu.

2012 data per IDC. 7 .Global Smartphone Operating Systems ‘Made in USA’… 88% Share from 5% Six Years Ago Global Smartphone Operating System Market Share (by Units Shipped). 2012 100% Market Share of Smartphone OS 80% Other OS 60% iOS Android Windows Phone 40% BlackBerry OS Linux Nokia Symbian 20% 0% 2005 2012 Source: 2005 data per Gartner. 2005 vs.

RE-IMAGINATION BEING RE-IMAGINED & UPLOADED @ AN ACCELERATING PACE 8 .

Long Ago. Now They Video / Click / Share / Tweet… 1990s 2010s Source: Left image – 123RF. Right image – amadarose.com.uk. People Danced @ Concerts. 9 .co.

The New Yorker.com. nobody knows you’re a dog. Right image – Tumblr user cachorro no computador. But You Can’t Hide 1993 On the Internet. cartoonbank. Left image – Peter Steiner.  2013 On the Internet.  Source: Quote – Joe Louis (American heavyweight boxer). 10 . 1993. everybody knows you’re a dog. 1946.Today = You Can Run.

2005 – 2015E Digital Information Created & Shared (zettabytes) 8 6 4 2 0 2005 2007 2009 2011 2013E 2015E 11 Note: * 1 zettabyte = 1 trillion gigabytes. Global Digital Information Created & Shared. per IDC.World’s Content is Increasingly Findable + Shared + Tagged Digital Info Created + Shared up 9x in Five Years Amount of global digital information created & shared – from documents to pictures to tweets – grew 9x in five years to nearly 2 zettabytes* in 2011. . Source: IDC report “Extracting Value from Chaos” 6/11.

Media + Data Uploading + Sharing from Mobiles = Ramping Fast & Still Early Stage Explosive Growth. But Still Early Stage Ramping Very Fast Emerging Emerging Source: Far right Illustration – Eric Prommelt. 12 .

Photos… 13 .

on Trend to Rise 2x Y/Y… Daily Number of Photos Uploaded & Shared on Select Platforms. 2005-2013YTD 600 # of Photos Uploaded & Shared per Day (MM) 500 Flickr 400 Snapchat Instagram Facebook 200 300 100 0 2005 2006 2007 2008 2009 2010 2011 2012 2013YTD 14 Source: KPCB estimates based on publicly disclosed company data. .Photos = 500MM+ Uploaded & Shared Per Day. Growth Accelerating.

Choose How Long Your ‘Snap’ Lives 15 .Short-Term Sharing Exploding – Snapchat Growth From Content That Disappears. Up >2x in 2 Months Snapchat Daily Number of ‘Snaps’ 5/12 – 4/13 160 140 # of Photos Shared per Day (MM) 120 100 80 60 40 20 0 5/12 10/12 12/12 2/13 3/13 4/13 Source: Snapchat.

Video… 16 .

. Up from ~Nada Six Years Ago YouTube Hours of Video Uploaded per Minute. 6/07 – 5/13 120 Hours of Video Uploaded per Minute 100 80 60 40 20 0 6/07 1/09 5/09 3/10 11/10 5/11 5/12 5/13 17 Source: YouTube.Video = 100 Hours Per Minute Uploaded to YouTube.

Video (Short-Form + Persistent) = Ramping Fast Twitter Vine 6 Second Videos 2x M/M Growth Vine iOS App Monthly Active Users (MAUs) as % of Total USA iPhone MAUs. 18 . 1/13-4/13 8% % Share of USA iPhone Monthly Active Users 6% 4% 2% 0% 1/13 2/13 3/13 4/13 Dropcam ($149 ASP) More Video Uploaded per Minute Than YouTube Source: Onavo. Dropcam.

a Wi-Fi video monitoring camera that streams to my phone and computer. – Randi Zuckerberg Parents Can See & Talk With Children While Away From Home Source: Dropcam.Opt-In Video – ‘Big Brother’ Meets Big Mother? 30% of Dropcam viewers used Talk Back to interact over past 2 weeks. I still join my husband in singing bedtime lullabies using Dropcam. Mashable. When I am on the road. 4/13 19 .5/13.

Sound… 20 .

Tencent. 4x Y/Y Source: SoundCloud. 21 .Sound = Emerging as Voice Comes Back to Phones… SoundCloud 11 Hours of Sound Uploaded per Minute Tencent WeChat 400MM+ Users.

Data… 22 .

23 . We Help Others Waze • • 48MM Users. I Help You. +2x Y/Y 1B+ Miles Driven per Month w/ Waze Open Jawbone UP Per Day… • Billions of Steps • 700K+ Hours of Sleep • 5x App Interactions per User Yelp • • 102MM Users. +42% Y/Y Source: Company data.Win-Win-Win Sharing = Growing Quickly – You Help Me. +43% Y/Y 39MM User-Generated Reviews.

10/12 – 4/13 60 50 # of API Calls (MM) 40 30 20 10 0 10/12 11/12 12/12 1/13 2/13 3/13 4/13 24 Note: *API calls are data request from fitness devices (such as Jawbone UP) and GPS-enabled activity tracking apps (such as Endomondo / Runtastic) that partner with MyFitnessPal.Fitness Data on Mobile + Wearable Devices = ~2x Month-on-Month Growth MyFitnessPal . . Source: MyFitnessPal.# of API Calls*.

25 . Obesity & Inactivity 37%. Alcohol 9%. Other 10%.Health Outcomes – Behavior (at 40%) is Biggest Driver of Premature Death USA Proportional Contribution to Premature Death. Source: “We Can Do Better — Improving the Health of the American People” .The New England Journal of Medicine. 2007 10% 5% 40% 15% 30% Behavioral Patterns* Social Circumstances Health Care Genetic Composition Environmental Exposure *Smoking: 44%. 2007.

Sharing… 26 .

YouTube + Twitter + Google+ + Pinterest + Instagram + Tumblr Rising Fast Which of the Following Social Media Do You Use? Facebook YouTube Twitter Google+ LinkedIn Pinterest MySpace Instagram Tumblr Foursquare 0% 20% 40% 60% 80% 100% 2012 2011 Source: Frank N.Social Media – Facebook Leads. 27 . “Facebook Fatigue . Magid Associates. Based on a study of 2K social media users aged 12-64 who were asked “Which of the Following Social Media Do You Use?” 2011 Pinterest and Instagram data from 9/12 / 4/12. March 2013.Fact or Fiction?”.

com.Americans = Sharing Underachievers… % of Respondents Indicating They Share ‘Everything’ or ‘Most Things’ Online. links.)’ Source: Ipsos Open Thinking Exchange. 28 . etc. photos. videos. via Marketingcharts. 5/13 70% 60% 50% 40% 30% 20% 10% 0% World Average = 24% 15% Note: Survey question is ‘describe how much you share online (including status updates. feelings.

29 .‘truth’ can be a photo or video / click–send away. ‘Clean. This is new terrain.1B+ global active Facebook users…68% on mobiles…60% log in daily…with average 200+ friends… 350MM photos uploaded daily…* It’s hard to hide . well-lighted place to do business?’ ‘People are basically good?’ Perhaps the world is on cusp of being safer than ever? There are lots of sacrifices.Unprecedented Transparency in Time of Tremendous Global Uncertainty… Ramp in Always-On Connected Global Citizens • 1. Only time will tell how all this plays out… • • • • • * Source: Facebook. 5/13.

MOBILE – AGGRESSIVE MOMENTUM 30 .

0 = Weakest) 6 4 2 0 Source: IDC. 3/13.4 social and communications apps on their phones. Facebook-sponsored research asked smartphone owners how an array of social and communication activities on their phones made them feel. 0 = Weakest). 3/13 When Asked How Social and Communication Activities on Smartphones Made You Feel 8 Relative Sentiment Index (10 = Strongest. 31 . Most owners use ~7. Responses are indexed above.Smartphones = Extraordinary Attributes Connected + Excited + Curious / Interested + Productive USA Smartphone User Relative Sentiment Index (10 = Strongest.

9% in 5/09 5% 0% 12/08 2.4% in 5/10 10% in 5/12 6% in 5/11 15% in 5/13 12/09 12/10 12/11 12/12 12/13E 12/14E 32 Source: StatCounter Global Stats. . 12/08 – 5/13 (with Trendline Projection to 5/15E) 30% Trendline 25% % of Internet Traffic 20% 15% 10% 0.Mobile Traffic as % of Global Internet Traffic = Growing 1.5x per Year & Likely to Maintain Trajectory or Accelerate Global Mobile Traffic as % of Total Internet Traffic. 5/13. Note that PC-based Internet data bolstered by streaming.

.China – Mobile Internet Access Surpassed PC. via Mobile Phones. 1/13. Q2:12 % of Chinese Internet Users Accessing the Web via Desktop PCs vs. 6/07 – 12/12 100% % of Total Internet Users in China 96% 80% via Desktop PC 60% 71% via Mobile Phone 75% 40% 28% 20% 0% 6/07 12/07 6/08 12/08 6/09 12/09 6/10 12/10 6/11 12/11 6/12 12/12 33 Source: CNNIC.

Q4:12 NHN Korea Search Query Trend (Indexed). 1/11 – 3/13 NHN Search Query (Indexed) PC Query Mobile Query 1/11 3/11 5/11 7/11 9/11 11/11 1/12 3/12 5/12 7/12 9/12 11/12 1/13 3/13 Source: NHN Corporate Presentation. Korea – Mobile Search Queries Surpassed PC.S. 34 . PC vs. as of 5/13. Mobile.

1/11 – 3/13 50% Groupon North America Transactions Completed on Mobile (%) 45% 40% 30% 20% 10% 14% 1/11 4/11 7/11 10/11 1/12 4/12 7/12 10/12 1/13 35 0% Source: Groupon. . America – 45% of Transactions on Mobile. Up from <15% Two Years Ago % of Groupon North America Transactions Completed on Mobile. as of 3/13.Groupon N.

086 $1.59 1% 11% $4.245 36% 14% 41% 23% 43% 30% 325 110% 44% 376 92% 47% 432 76% 51% 488 69% 54% 543 67% 57% 604 61% 60% 680 57% 64% 751 54% 68% Annualized Ad ARPU ($) $4.28 (2%) 7% $4. Q1 Growth = Revenue +43% Y/Y.43 7% 4% $5.Facebook – Mobile Has Helped Drive Users & Revenue.329 $1.15 19% (5%) $4. 36 . ARPU + 15% Q2:11 Ad Revenue ($MM) Y/Y Growth % from Mobile Mobile Active Users (MAUs) (MM) Y/Y Growth % of Total MAUs $776 83% -- Q3:11 $798 77% -- Q4:11 $943 44% -- Q1:12 $872 37% -- Q2:12 $992 28% -- Q3:12 Q4:12 Q1:13 $1. Mobile Users +54% (to 68%).15 12% 16% $4.60 15% (11%) Source: Facebook.37 Y/Y Growth Q/Q Growth 18% 11% $4.00 1% (13%) $4.

Mobile. So Far Facebook Annualized Ad ARPU.Facebook = Rising Mobile ARPU Has Offset Declining Desktop ARPU. 37 . Desktop vs. 3/11-3/13 $6 Annualized Ad ARPU ($) $4 $2 0 3/11 6/11 9/11 12/11 3/12 6/12 9/12 12/12 3/13 Desktop Ad ARPU Mobile Ad ARPU Overall Ad ARPU Source: Facebook.

COMPUTING – YET ANOTHER PLATFORM CHANGE… 38 .

We Just Began to Figure Out Smartphones… 39 .

31% Growth. 40 .5B Subscribers. Source: Informa.Smartphone Subscriber Growth = Remains Rapid 1. 21% Penetration in 2013E Smartphone Smartphone 2013E Sub Y/Y as % of Smartphone Growth Subs (MM) Total Subs 354 219 94 70 67 43 38 36 33 32 30 21 21 21 20 29% 58 76 23 6 53 67 11 46 29 12 19 38 23 60 31% 28 15 28 52 22 18 34 27 29 38 43 36 25 27 Smartphone Smartphone 2013E Sub Y/Y as % of Smartphone Growth Subs (MM) Total Subs 20 19 19 18 17 15 15 14 12 12 11 10 10 9 8 33% 18 63 21 24 25 35 20 58 37 20 10 10 60 59 14% 34 21 30 30 37 19 26 27 60 25 40 34 16 31 Rank Country 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 China USA Japan* Brazil India UK Korea Indonesia France Germany Russia Mexico Saudi Arabia Italy Australia Rank Country 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Spain Philippines Canada Thailand Turkey Argentina Malaysia South Africa Netherlands Taiwan Poland Iran Egypt Sweden Hong Kong 2013E Global Smartphone Stats: Subscribers = 1.492MM Penetration = 21% Growth = 31% Note: *Japan data per Morgan Stanley Research estimate.

000 1. . 2013E 6.000 Smartphone Users 1.000 5B+ Mobile Phone Users 5.actual number of actual smartphone + mobile phone devices in use (subscription numbers) may be higher than user numbers.000 3.Smartphone Usage = Still Early Stage With Tremendous (3-4x) Upside Global Smartphone vs.000 Global Users (MM) 4. Note: One user may have multiple devices .000 0 Smartphone Mobile Phone 41 Source: Morgan Stanley Research estimates.5B 2. Mobile Phone Users.

. Morgan Stanley Research.4x Share Gain)… Samsung Up 7x Over ~2 Years Global Smartphone Unit Market Share Q4:12 Q1:10 22% 16% 4% Apple Samsung 80% Other 49% 29% 55MM Units 219MM Units 42 Source: IDC. Data as of 4/13.Apple Growing Rapidly (1.

…Then Along Came Tablets… 43 .

000 40.000 30.000 100.000 10. iPad 60.000 20. iPad (4/3/10).Tablet Growth = More Rapid than Smartphones.000 iPad iPad iPhone iPhone 140. Launch Dates: iPhone (6/29/07).000 20. iPhone vs. as of CQ1:13 (12 quarters post iPad launch).000 60.000 40.000 50.000 0 0 0 0 1 1 2 2 3 3 4 5 6 7 8 9 10 11 12 12 After Launch Launch Quarters After Source: Apple.000 160. iPad = ~3x iPhone Growth First 12 Quarters Cumulative Unit Shipments.000 80.000 Global Unit Unit Shipments Shipments (000) (000) Global 120. 44 .

Gartner. < 3 Years from Intro Global PC (Desktop / Notebook) and Tablet Shipments by Quarter Q1:95 – Q1:13 60 Global Units Shipped (MMs) 50 40 30 20 10 0 Q1:95 Q1:97 Q1:99 Q1:01 Q1:03 Q1:05 Q1:07 Q1:09 Q1:11 Q1:13 Desktop PCs Notebook PCs Tablets 45 Note: Notebook PCs include Netbooks. Morgan Stanley Research. Data as of 4/13.Tablet Shipments = Surpassed Desktop PCs & Notebooks in Q4:12. Source: Katy Huberty. . Ehud Gelblum.

Source: Katy Huberty. Gartner. Data and Estimates as of 4/13. Morgan Stanley Research. 46 . Not Notebooks & Desktops Global PC (Desktop / Notebook) and Tablet Shipments by Quarter Q1:1995 – Q1:2013 160 140 Global Units Shipped (MMs) Desktop PCs 120 100 80 60 40 20 0 1Q95 Notebook PCs Tablets 1Q97 1Q99 1Q01 1Q03 1Q05 1Q07 1Q09 1Q11 1Q13 Note: Notebook PCs include Netbooks. Ehud Gelblum.Demand for Large-Screen Computing Devices is Robust. But Mix Favors Tablets.

Top Vendors Largely Same in Desktop & Notebook Cycles – Very Different in Tablet (& Smartphone) Cycles Desktop PC Market Share 2000 % Share Compaq Dell HP IBM NEC Others 13% 11% 8% 7% 4% 57% HP Acer Dell Lenovo ASUS Others Notebook PC Market Share 2010 % Share 19% 17% 12% 10% 8% 34% Tablet Market Share 2012 % Share Apple Samsung Amazon ASUS Lenovo Others 51% 13% 8% 5% 1% 20% Smartphone Market Share 2012 % Share Samsung Apple Sony ZTE BlackBerry 30% 19% 5% 5% 5% 37% Others Note: Notebook PCs include Netbooks. Data as of 4/13. Gartner. Source: Morgan Stanley Research. 47 .

An Unusual Pattern… In Two Computing Cycles… 1) Smartphones 2) Tablets …Entering a Third Cycle… 3) Wearables / Drivables / Flyables / Scannables 48 .

Technology Cycles – Still Early Cycle on Smartphones + Tablets. Pebble. Wikipedia. NTT docomo.com. Google. Apple. Now Wearables Coming on Strong. Jawbone. Google. Faster than Typical 10-Year Cycle Technology Cycles Have Tended to Last Ten Years Mainframe Computing 1960s Mini Computing 1970s Personal Computing 1980s Desktop Internet Computing 1990s Mobile Internet Computing 2000s Wearable / Everywhere Computing 2014+ Others? 49 Image Source: Computersciencelab. IBM. .

Morgan Stanley Research.000 1B+ Units / Users 100MM+ Units 1MM+ Units 1970 10MM+ Units 1980 1990 2000 10B+ Units??? 100 10 1 1960 2010 2020 Note: PC installed base reached 100MM in 1993.New Major Technology Cycles = Often Support 10x More Users & Devices.000 10. 1960 – 2020E Devices / Users (MM in Log Scale) 100. Driven by Lower Price + Improved Functionality Computing Growth Drivers Over Time.000 1. Source: ITU. 50 . cellphone / Internet users reached 1B in 2002 / 2005 respectively.

…Wearables (with Sensors)… 51 .

and miscellaneous activities. Source: TomiAhonen Almanac 2013. charging.Smartphone Users Reach to Phone ~150x a Day… Could be Hands-Free with Wearables # of Times Typical User Checks Phone per Day Messaging Voice Call Checking Time Music Gaming Social Media Camera Alarm News & Alerts Calendar Web Search Other 0 5 10 3 3 14 15 20 25 52 23 22 18 13 12 9 8 8 6 5 Other includes voicemail. .

Sensor-Enabled Wearable Attributes Hands-Free • Voice / gesture control • • • 3rd party apps API partners Accessories Development Platform • Always-On • • Low power consumption Instant wake Background working / sensing • Less distracting when receiving alerts / reminders / messages AttentionGetting Environment -Aware • • • • • • GPS Accelerometer Compass Camera Microphone Other Sensors Connected • • • • Wi-Fi 3G / 4G Bluetooth NFC Source: MIT. KPCB. 53 .

Some People Laugh at Wearables… And ‘SNL’ Does Rule… . 54 .) Source: Saturday Night Live. 5/13.

…Some People Laughed at PC & Internet There is no reason anyone would want a computer in their home. .Ken Olsen (Founder) Digital Equipment 1977 May 1999 55 .

…Drivables… 56 .

A Car or a Computer on Four Wheels? 57 .

etc. Note that *listening share data for other non-mobile / non-PC devices (car / TV. Other*.) PC Mobile + Tablet 80% 60% 40% 20% 0% 4/09 10/09 4/10 10/10 4/11 10/11 4/12 10/12 4/13 58 Source: Pandora. so FQ4:13 ended Jan 31. **Pandora fiscal year ends Jan 31. 4/09 – 4/13** 100% Share of Total Listening Hours (%) Other* (Car / TV. .Pandora Usage – Car / TV / Appliance Usage (~13% Now) to Likely Surpass PC (21%) Usage in 2 Years Share of Pandora Quarterly Listening Hours. etc) are KPCB estimates. Mobile + Tablet vs. 2013. PC vs.

…Flyables… 59 .

It’s a Bird.0-magnitude earthquake in Lushan. 60 .net. China (4/13). Middle image – Dronereport. *Right image – Drone carrying cameras + other sensors being deployed during search & rescue mission of 7. It’s a Plane. It’s a Mini-Drone… Use Cases of Low-Cost Drones Agriculture GPS-Enabled Photos Help Pinpoint Potential Crop Damage Early On Sports / Entertainment Unique Angle of View Provides Insights for Training + Broadcast Audience Public Safety / Disaster Relief* Providing Aerial Video Coverage / First-Aid / Other Supplies in Challenging Conditions Source: Left image – Shutterstock.

Scannables – Codes / Tags + Cameras / Sensors 61 .

QR Codes = Scan & Be Scanned to Get Stuff… SCAN Quick Scan w/ Smartphone For Info on Nutrition / Product / Price… BE SCANNED Smartphone-Generated Codes For Boarding Pass / Ticket / Payment / Rewards… 62 .

China .Follow UK Embassy Weibo Account by Scanning QR Code Outside Embassy in Beijing 63 .

Check-Ins. Business Card Exchange.) 0 3/12 3/13 Note: * March 2012 use case breakdown not available..) Promotions (Billboard. 64 . Tickets. China QR Code Market Study. 3/13 10 9MM China Monthly QR Codes Scanned (MMs) 8 3% Payment 22% Information (Nutrition Info. 2013.. 3/12 vs. Rewards. Source: Imageco.. We believe data are understated..QR Code Scanning = Up 4x Y/Y in China. Advertising…) 6 33% 4 2MM* 2 42% Passcode (Coupons. Offline Businesses Driving Online Connections China Monthly QR Codes Scanned by Use Case.

3/11-3/13 400 Registered Users (MM) 300 200 100 0 3/11 6/11 9/13 12/11 3/12 6/12 9/12 12/12 3/13 65 Source: User growth per Tencent and Morgan Stanley estimates. Tencent WeChat Registered Users. Businesses… Use QR code + communication functions to manage customer acquisition and relationships. provide customer support via WeChat. . SMBs can send offers / take online orders. China) – Mobile Communication + Local Commerce via QR Codes Consumers… In addition to connecting w/ friends via voice / text / pictures. +4X Y/Y.Tencent WeChat (400MM+ Users. WeChat users can scan QR codes of merchants to stay connected and enroll in rewards programs + receive coupons.

LOTS TO LEARN FROM CHINA – VOLUME + INNOVATION 66 .

1/11 – 2/13 250 Active iOS and Android Devices (MM) China 200 USA 150 100 50 0 1/11 3/11 5/11 7/11 9/11 11/11 1/12 3/12 5/12 7/12 9/12 11/12 1/13 Source: Flurry Analytics. China (MM).China – iOS + Android Users Surpassed USA. USA vs. Q1:13 Active iOS and Android Devices. 67 .

2012 50% % of Total Media Consumption Time USA 40% 42% 33% 29% 26% 20% 14% 11% 6% 0% Print 5% Radio TV Internet Mobile 22% China 30% 10% 12% Source: USA media time spent share data based on eMarketer as of 12/12. China. 38% in USA % of Time Spent in Media. USA vs.China Leads USA in Mobile + Internet Time Spent vs. TV = China @ 55% vs.750 samples as of 12/12. 68 . China media time spent data per Miaozhen Systems’ (a leading 3rd party ad tech platform) survey of 35.

Alibaba – Gross Merchandise Volume Surpassed Amazon.com + eBay vs. . 1995 – 2012 Amazon. Alibaba / Taobao $200 Amazon.com + eBay. Q4:12 Gross Merchandise Value.com eBay Amazon.com + eBay GMV ($B) $150 $150 Alibaba / Taobao GMV ($B) 69 $200 Alibaba / Taobao $100 $100 $50 $50 $0 1995 1997 1999 2001 2003 2005 2007 2009 2011 $0 Source: Company data.

70 .com (360buy) – Same Day Delivery with Real-Time Item Tracking on Map / Mobile…Often on Bicycle Free* Same-Day Delivery in 25+ Cities in China / Customer Can Track Package Location on Map / Mobile Devices and Contact Delivery Person in Real Time Note: *For orders > $8.JD.

71 .Taxi Apps* – China – Push to Talk to Driver / Bid Extra to Increase Chance of Getting Car on Your Terms Push to Talk Say current location and where you’re going. Your voice message will be delivered instantly to all nearby available taxis Bid to Win Increase your chance of hailing a cab during peak hours by offering extras tips up front (in addition to regular fare) Real Time Tracking View your taxi’s location in real-time. Right image – Kuai Di Da Che. push to talk to the driver directly to coordinate pick-up *Source: Left image . Center image – Di Di Da Che.Yao Yao Zhao Che.

Morgan Stanley Research. Up From $0 Y/Y Notable Events / Movements Helped by Sina Weibo Beijing Air Quality Campaign – Sina Weibo users’ UGC photos / polls / reposts / suggestions helped drive government adoption of daily monitoring of air quality Real-Time SelfOrganized Emergency Relief – Through Weibo.Sina Weibo – 530MM+ Users (+2x Y/Y) Help Push For Social Change…$100MM Revenue Run Rate. . volunteers coordinated to pick up stranded travelers at Beijing airport during torrential downpour in 7/12 Sina Weibo Registered Users & Annualized Revenue Run Rate. 4/11-3/13 Registered Users (MM) Registered Users Annualized Revenue Run Rate Annualized Revenue Run Rate ($MM) 72 600 400 200 0 4/11 $120 $80 $40 $0 6/11 8/11 12/11 3/12 6/12 9/12 12/12 3/13 User / revenue source: Sina.

data post 1980 based on IMF data (GDP adjusted for purchasing power parity). Europe vs. Europe & USA are Epic Percent of Global GDP. OECD. 1820 – 2012. University of Groningen.GDP = China Share Gains vs. 73 . USA vs. India vs. Latin America 40% 30% % % of of Global Global GDP GDP 33% 33% 33% 19% USA 19% 19% 27% 27% 27% 20% 16% 16% 16% 10% Europe 0% 2% 2% 2% 2% 2% 2% 16% 16% 15% 15% 16% China 15% 8% India 8% 8% 8% Latin 6% 6% 6% America Source: Angus Maddison. China vs.

MOST ENABLED ENTREPRENEURS EVER? ZERO -> 1 MILLION USERS IN RECORD TIME(S) 74 .

Is This Generation Different? Selective Formative Events of Past 20 Years September. 2008+ – Destabilized financial security High Unemployment Levels – Destabilized career optimism Potential Fiscal Debt Challenges – Rise in need to depend on selves Rise of Cheap / Available Computing – 24x7 global access to loads of stuff including shared goods Rise of New ‘Geek’ Entrepreneur Heroes – Jobs + Sergey / Larry + Zuck… Rise in Social Connectivity – Ability to find / create / share / provide + get feedback Rise in Value of Social / Virtual vs. Financial + Physical Currency 75 . 2001 USA Terrorist Attacks – Destabilized sense of security Rise of China as Global Super Power – Altered global competition Global Financial Crisis.

Turning Passion Into Businesses…On an Epic Internet Palette Sports David Finocchio / BleacherReport Books Otis Chandler / Goodreads Music Daniel Ek / Spotify Art / Creativity Georg Petschnigg / Fiftythree Design / Inspiration Ben Silbermann Pinterest Sound Alex Ljung + Eric Wahlforss / SoundCloud News & Politics Chris Altchek + Jake Horowitz / PolicyMic Product Design Ben Kaufman Quirky Home Decoration Adi Tatarko + Alon Cohen / Houzz 76 .

YOU WANT TO BE A PUBLIC COMPANY? 77 .SO.

Q1:08 – Q1:13 Registered Members Registered Members (MM) 200 Gross Margin 85% Gross Margins (%) 78 250 90% 150 80% 100 75% 50 70% 0 Q1:08 Q1:09 Q1:10 Q1:11 Q1:12 Q1:13 65% Source: LinkedIn. Data as of 5/27/2013.Internet IPO Standout – LinkedIn… Registered Users = 218MM in Q1. . High Gross Margins (87%) LinkedIn Registered Members and Gross Margins. +35% Y/Y.

6% above consensus consensus EBITDA $50MM. 2x consensus 2/12 – Q4 Revenue $168MM. +81% Y/Y. +81% Y/Y. Revenue $228MM. 16% above consensus $0 5/11 9/11 1/12 5/12 9/12 1/13 5/13 79 Source: Yahoo Finance. Shares +305% LinkedIn Share Daily Closing Price. Raised $714MM 5/11 – IPO @ $45 Raised $353MM 11/11 – Q3 Revenue $140MM. 5% above consensus EBITDA $38MM. 14% above consensus EBITDA $5MM. . +72% Y/Y. 16% above consensus $225 $200 $175 $150 $125 $100 $75 $50 $25 8/11 – Q2 Revenue $121MM. 8% above 8/12 – consensus Q2 EBITDA $79MM. 5% above consensus EBITDA $34MM. 15% above consensus 5/13 – Q1 Revenue $325MM. 10% above consensus EBITDA $12MM. 31% above consensus 11/12 – Q3 Revenue $252MM. 2% above consensus EBITDA $83MM. +101% Y/Y. 25% above +89% Y/Y. +124% Y/Y. FactSet.…Internet IPO Standout – LinkedIn Averaged 7% Revenue / 83% EBITDA Upside Since IPO. 5/11-5/13 2/13 – Q4 Revenue $304MM. Bloomberg. +105% Y/Y. 3% above consensus EBITDA $56MM. Data as of 5/17/13. +129% Y/Y. 5x consensus 11/11 – Follow-on offering @ $71 per share. 62% above consensus 5/12 – Q1 Revenue $188MM.

Capital expenditures for Facebook include capital leases. non-recurring charges and include depreciation. Figures are not de-duplicated. Google (14).Financial Dynamics of Internet Leaders eCommerce Amazon Years Since Founding People Users Cumulative Operating Expense R&D Capital Expenditures Revenue Gross Margin (%) Free Cash Flow Market Capitalization 19 91K 209MM eBay 18 32K 116MM Communication Facebook 9 5K 1. amortization. 2-year for iPhones and iPods. eBay users are active members of eBay marketplace. eBay (17). Tencent (12).1B Tencent 15 24K 798MM Search Google 15 54K 1. stock-based compensation.2B Hardware Apple 37 80K 500MM+ $50B $15B $9B $246B 27% $12B $122B $42B $7B $6B $79B 69% $19B $71B $5B $2B $3B $12B 72% $1B $62B $5B $2B $2B $20B 56% $7B $73B $63B $26B $20B $153B 72% $53B $301B $87B $21B $30B $695B 37% $138B $415B Full lifetime data for all companies not available. 26 for others). Market cap. Data for Google includes DoubleClick (back to 1996). Apple (37 for revenue. Apple user figures based on estimated installed base of Mac. Morgan Stanley Research. Data for eBay includes Paypal. Yahoo! Finance. ComScore. Google gross margin based on revenue net of TAC. Source: Public filings. Operating expenses exclude one-time. Facebook (6). iPad. 80 . Google user data per ComScore. Company (Years of Data) as follows: Amazon (19). iPhone. FactSet. 3-year for iPads. figures as of 5/21/2013. iPod units assuming a 4year replacement cycle for Macs.

028 6.301 874 682 374 2.054 2. Google Finance.540 4.121 926 763 1.957 5.558 3.334 1.064 81 2013 market value data as of 5/20/2013.com LinkedIn Rakuten Netflix Liberty Interactive NHN Yandex Tripadvisor Netease Verisign Mail.375 2012 Revenue ($MM) $155.com + LinkedIn Gain Y/Y… Apple + Baidu Fall Rank 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Total Company Apple Google Amazon eBay Tencent Facebook Priceline Baidu Yahoo! Yahoo! Japan Salesforce.261 3.987 3.089 5.359 899 $345.304 3.971 49.Market Value = Google + Amazon + eBay + Tencent + Priceline + Yahoo! + Yahoo! Japan + Salesforce. Morgan Stanley Research.ru Mercadolibre Groupon Nexon Asos Region USA USA USA USA China USA USA China USA Japan USA USA Japan USA USA Korea Russia USA China USA Russia Argentina USA Korea UK 2013 Market Value ($B) $416 311 127 76 74 73 42 33 30 29 28 22 17 14 12 12 10 9 8 7 6 6 5 5 4 $1.609 10.050 972 5.958 61. .093 14. Source: FactSet.

HIGH-SKILLED IMMIGRATION – PERSPECTIVE 82 .

kpcb.com/insights 83 .Immigration in America & The Growing Shortage of High-Skilled Workers Report / Presentation Can Be Found at www.

Why Did We Publish a Report on High-Skilled Immigration?
• America is the global leader in the technology industry. • Immigrants (often with STEM* degrees) have been (and are) especially important to the vibrancy of tech companies. • America has a shortage of high-skilled STEM workers and our tech leaders believe it's constraining their ability to compete and grow jobs in America. • Government policy helps send many qualified foreign high-skilled workers home and constrains those that can come to America. • Global environment for recruiting high-skilled STEM workers is likely to get much more competitive. • Potential for immigration reform in America is very real and the future direction will likely be determined this year. • This is a big issue for the technology industry – we encourage you to read / share / opine on the report – it can be found at kpcb.com/insights
*Note: STEM = Science / Technology / Engineering / Mathematics.

84

99% Of Americans Are Immigrants Or Descendants Of Immigrants
USA Population by Ancestry, 2010 Census

Immigrants or Descendants of Immigrants

15%

11%

9%

15%

13%

16%

5%

15%

306 Million

German Other European Asian

Irish African American* Other / Unclassified

English Hispanic

Native Americans

0.9%

3 Million

0%

20%

40%

60%

80%

100%
85

Note: *African-American total includes those who came as slaves and not as voluntary immigrants. Other includes North America (Canada), Australia, New Zealand, and those who have more than one ethnicity reported. Source: Census Bureau, 2010 data.

High-Skilled Immigrants Are Only 1% Of Total U.S. Population

U.S. Population at a Glance, U.S. Born vs. Immigrants by Type of Admission, 2010
4MM, 1%

Legal Immigrants (High-Skilled) Legal Immigrants (Family-Based) Legal Immigrants (Refugees & Other) Undocumented Immigrants

270MM U.S. Born 87% of Total Population

19MM, 6% 40MM Immigrants 13%

6MM, 2% 11MM, 4%

Total USA Population = 310MM
Note: Number of undocumented immigrants currently residing in USA is an estimate by PEW Hispanic Center based on Census data. Precise breakdown of legal immigrants currently residing in USA by type of admission is not available and is an estimate based on Census data as well as Department of Homeland Security immigrant admission data from 1986 to 2010. Source: Census Bureau, PEW, DHS.

86

093 47. Italy ‐‐ 1st‐Gen.011 116. Ranked by Market Capitalization Rank Company 1 Apple 2 Google 3 IBM 4 Microsoft  5 Oracle   6 Amazon.764 37.000 331.com 18 Dell 19 Yahoo! 20 Cognizant Technology 21 Adobe 22 Broadcom  23 Intuit 24 LinkedIn  25 Symantec  Total Founded by 1st or 2nd Gen Immigrants Mkt Cap ($MM) $416.639 105.648 20.100 53.445 239.089 21.904 105.252 53.346 4.357 16.800 7.118 38.000 31. Public Tech Companies.S.347 43.690 4.714 118.144 11. Russia 2nd‐ Gen.397 12.640 19. Corporations” 87 .917 35.230 61.982 4. Syria 1st‐Gen.619 60. 2012 Founders / Co-Founders of Top 25 U.com 7 Cisco 8 Intel   9 Ebay 10 Facebook 11 EMC 12 Hewlett‐ Packard  13 Texas Instruments 14 VMware 15 Priceline 16 Automatic Data Processing 17 salesforce.300 8.S.300 11.044 119.500 1.916 $1.605 5. Poland ‐‐ ‐‐ 1st‐ Gen.274 25.000 57.000 115.472 53. The Impact of Immigrant Founders & Professionals on U.861 434.261 10.60% of Top 25 Tech Companies Founded By 1st & 2nd Generation Americans = 1.153 972 6.828 172.006 4. Cuba ‐‐ 1st‐Gen.000 88.800 111. Poland ‐‐ 1st‐Gen.700 11.713 19.306 23.357 63.400 66.500 3.3MM Employees.000 9.800 34.958 104.048 LTM Rev ($MM) $164.530 234. Nairobi ‐‐ 2nd‐Gen. Germany ‐‐ Source: FactSet as of 3/13.346 49.500 4.633.756 35.622 268. Taiwan 1st‐Gen.583 31.721 65.768 Employees 76. Germany ‐‐ 2nd‐Gen.507 72. France ‐‐ 2nd‐Gen.050 56. Hungary 1st‐Gen.700 156.393 19.987 7. a report by the Partnership for a New American Economy. “American Made.458 20.341 14.839 $555.373 8. Switzerland ‐‐ 2nd‐Gen.151 13.945 3.028 5. UK 1st‐Gen.840 25. Russia 2nd‐Gen.246 94. “The ‘New American’ Fortune 500”.216 Founder / Co‐ Founder Steve  Jobs Sergey Brin Herman Hollerith Bill  Gates Larry Ellison Jeff Bezos Leonard Bosack Andrew Grove Pierre  Omidyar Mark Zuckerberg Roger Marino William Hewlett Cecil  Green Edouard Bugnion Jay Walker Henry Taub Marc Benioff Michael  Dell Jerry Yang Francisco D'Souza John Warnock Henry Samueli Scott Cook Konstantin Guericke Gary Hendrix Generation 2nd‐Gen.252.003 24.

000 150.4x # of Computer Science Graduates Projected Average Annual # of Graduates w/ Bachelors Degree in Computer Science vs.474 # of Job Openings Requiring a Bachelor's Degree in Computer Science 0 50. per Year Source: Microsoft analysis (published in 2013) based on Bureau of Labor Statistics data. 2010-2020E # of Graduates w/ Bachelors Degree in Computer Science 51.Computer Science Job Opening Forecast = 2. # of Job Openings Requiring a Bachelors Degree in Computer Science.300 100.000 Number of People.000 122. 88 .

S.2012 600 F1 Student Visa Issued Number of Visas Issued (000s) 500 400 300 200 100 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 ~350K Difference H-1B Employment Visa Issued ~100K Difference 85K H-1B Visas Subject to Cap Source: U.5x Rise in Student & Employment Visa Issuance Gap Over Decade Number of Student (F1) vs. Employment (H-1B) Visas Issued per Year. 1992 . Department of State. 89 .USA Sending More Qualified Foreign Students Home Post Graduation 3.

CA. 3/13. Oracle And Qualcomm – Have Combined 10. Picture by Joshua StantonSavitz. http://www.Startups & Big Tech Companies Can’t Hire Enough Engineers Street View From Silicon Valley Five High-Tech Companies Alone – IBM. Intel. in Mountain View.com/doc/130388692/Tech-CEO-letter 90 .000 Current Openings In The United States. Data source: Technology CEO letter to the president and lawmakers. Microsoft.scribd. Image: View outside of Quixey’s office on Castro St.

Read More @ kpcb.com/insights 91 .

APPENDIX 92 .

Traditional Industries Being Re-Imagined 93 .

2012 250.1925.000) 50.S. Data not available for 1914 .S.000 Pieces of Mail Delivered (MM) 200.000 $0 150. Net Profit / (Loss) ($MM) 94 .000) 100. Postal Service Mail Volume Peaked in 2006 Owing to Email Rise… Profitability Plummeted Pieces of Mail Delivered (MM) and Net Profit / (Loss) ($MM) of U.000) 2012 Source: Annual Report of the Postmaster General.000 ($5.U.000 ($10. 1886 .000) 0 1886 1900 1914 1928 1942 1956 1970 1984 1998 ($20. Postal Service.000 Pieces of Mail (MM) Net Profit / (Loss) ($MM) $5.000 ($15.

Study consisted of face-to-face conversations with over 1. Executives were asked to discuss top three external forces that will have the biggest impact on their organizations. “Capitalizing on Complexity: Insights from Global CEO Study”.Relative Impact of Technology on Large Organizations = #2 Concern & Rising Rapidly % of CEOs Who Thought The Following External Factors Would Have The Biggest Impact on Their Organizations… Market Factors Technological Factors Macroeconomic Factors 41% 35% 38% 84% 42% 39% 67% 44% 48% 48% 56% 39% People Skills 37% Regulatory Concerns 33% 25% 21% Globalization Environmental Issues Socioeconomic Factors Geopolitical Factors 2004 2006 2008 2010 Source: IBM. May 2010. 95 .500 CEOs worldwide.

Financial Services . 17% average credit card borrowing rate vs. • • • Source: *Credit Card #s per Federal Reserve Bank of Boston. Credit Card interest rate per Indexcreditcards. per Dept. average American carries 3-4 credit cards in addition to check cards / loyalty cards / coupons / cash in wallet.Context • 600MM+ credit cards in use in USA. 1. Bill data per Fiserv. of Treasury. 16B paper bills sent per year in USA. 10-year Treasury yield are 5/13 averages.3B bills paid by paper check per year in USA. 4.8% 10-Year US Treasury bond yield*. 96 .

per Blockchain.Emerging Financial Services Metrics Company Gross Volume $15B+ Gross Payment Volume Processed to Date Y/Y Growth ~3x Y/Y # Users 4MM+ Merchants $1. Source: Square.5x Y/Y 20MM+ Registered Users Square Y/Y growth excludes partnerships. Blockchain. 97 . LendingClub. Check.8B+ Loans Issued to Date ~3x Y/Y 137K+ Loans Funded to Date $500MM+ Gross Payment Volume of bills Per Year ~17x Y/Y 8MM+ Registered Users 18MM+ Cumulative Transactions ~5x Y/Y 11MM+ Bitcoins in Circulation $29B+ Gross Mobile Payment Volume Per Year ~2.info. Bitcoins data as of 5/25/2013. JP Morgan Chase. Lending Club loans issued to date as of 5/25/2013.

1T+ annual spending on education in USA. $460B+ = post-secondary.Context… • $1.Education . Programme for International Student Assessment (PISA). 98 . • Student loans up 8x over ten years. • $914B** student loans outstanding ($25K per graduating student). bigger than credit card ($672B) & auto loans ($750B). cost of going to college up +2x (inflation adjusted) over 30 years. Source: **Federal Reserve Bank of New York.

2002 .Online Education Growing Rapidly = 32% of Students Taking at Least One Online Course. .2011 8 7 Online Students (MM) 6 5 20% 4 15% 3 2 1 0 Fall 2002 Fall 2003 Fall 2004 Fall 2005 Fall 2006 Fall 2007 Fall 2008 Fall 2009 Fall 2010 Fall 2011 10% 5% 0% 35% 30% 25% % of Total Enrollment 99 Students Taking at Least One Online Course Online Enrollment as a % of Total Enrollment Source: Changing Course: 10 Years of Tracking Online Education in the United States. Babson Survey Research Group 1/13. 2011 US Online Enrollment in Degree-Granting Postsecondary Institutions & % of Total Enrollment.

.800 US colleges perceive online education as the same or superior as compared to face-to-face education Academic Leaders’ Perceptions of Learning Outcomes in Online Education Compared to face-to-face 2012 2011 2010 2009 2006 2004 2003 0% 20% 40% Inferior & Somewhat Inferior Same 60% 80% 100% Superior & Somewhat Superior 100 Source: Changing Course: 10 Years of Tracking Online Education in the United States. Babson Survey Research Group 1/13.Online Education = Quickly Becoming More Accepted 77% of academic leaders at over 2.

Education Being Democratized = Fast Global MOOC (Massively Open Online Course) User Growth iTunes U Open University Downloads. 9/12 – 3/13 40 20 0 Students iTunes U Open University Downloads. 4/13. 101 . by Region 16% 46% 25% 16% 13% United States China UK Other North America 35% 13% 16% Asia Europe Other Source: The Open University 3/13. by Region Course Enrollment Coursera Users. & Coursera Company Data. 6/08 – 3/13 60 Downloads (MM) 10 8 (MM) 6 4 2 0 6/08 3/09 1/10 11/10 9/11 7/12 9/12 11/12 1/13 3/13 Coursera Users & Course Enrollment.

18% of GDP in 2010.Healthcare – Context… • $2. • $147B estimated medical costs associated with obesity in 2008. OECD. Source: American Heart Association. 102 . up from $79B in 1998. 2012. and 2x OECD average.6T+ annual spend on healthcare in USA. Center for Medicare & Medicaid Services. up from 5% in 1960. up from 15% in 1990. • ~100MM Americans (30%) of Americans considered obese in 2012.

March 2013 103 . we seem to jump right to the issue of who should pay the bills.Steven Brill. blowing past what should be the first question: Why exactly are the bills so high? . Great Reporting…Perhaps. Right Time When we debate health care policy.Right Story. Time.

Re-Imagination is Alive & Well 104 .

com (360buy) At Your Door Same-Day Delivery / RealTime Tracking / Last Mile on Bikes Manufacturing MakerBot 3-D Prototyping / Printing Education Codecademy Accessible by Anyone. Anywhere. Anytime Housing Airbnb Turn Privately-Owned Properties into Hotel Experience Transportation Uber On-Demand Transportation 105 .Re-Imagination of Basic Business Process… Building / Funding KickStarter Online / Social Distribution / Real-Time Progress Logistics JD.

Re-Imagination of Asset-Heavy Products / Services… Music (Spotify) Pay for Access / Instant On-Demand Streaming on Internet-Enabled Devices Video (Netflix) On-Demand / Instant Access Anywhere Textbooks (Chegg) Pay For Usage Rights During Semester Wallet (Square) Smartphone is the New Wallet Employment (oDesk / eLance) Workforce as a Service (WaaS) / On-Demand / Global Store Fronts (Zaarly) Anyone Can Open / Beautifully Designed 106 .

Re-Imagination of R&D… Minted • • 85K designs submitted 4MM monthly visitors • • Quirky 87K designs submitted 360K registered users • • 99Designs 228K designers 216K contests Source: Company data. 107 .

or a tool you use for your own personal learning • The 2012 survey compiled data from 582 learning professionals worldwide (55% working in education & 45% in noneducational organizations Company Twitter YouTube Google Docs* Google Search WordPress Dropbox Skype Powerpoint Facebook Wikipedia Moodle Evernote Slideshare Prezi Blogger / BlogSpot 2012 Rank 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 2009 Rank 1 3 5 8 6 71 11 13 31 17 14 27 7 28 14 108 Source: Centre for Learning & Performance Technology (C4LPT) Top 100 Tools For Learning 2012. .Re-Imagination of “Learning Tools” = Twitter / YouTube / Google Docs / Google / WordPress C4LPT Ranking of Top Learning Tools • 582 learning professionals worldwide were asked to provide their top 10 tools used for learning in 2012 / 2009 • ‘Learning tool’ is defined as any tool that you could use to create or deliver learning content/solutions for others.

Re-Imagination of Computing Operating Systems iOS + Android = 60% Share vs. 109 .com (as of 2011). 35% for Windows Global Market Share of Personal Computing Platforms by Operating System Shipments. 1975 – 2012 1983 Wintel . Public Filings.25% 100% Market Share of Personal Computing Platforms by Operating Systems (%) 90% 80% 70% 60% TRS-80 50% 40% Apple 30% 20% Other 10% Commodore Amiga Android Atari WinTel 1998 – 2005 Wintel – 96% 2012 Wintel – 35% 0% 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 Source: Asymco. Gartner for 2012 data. Morgan Stanley Research.

kpcb. Report / Presentation Can Be Found at www.com/insights 110 .USA. Inc.

The Index is calculated each month on the basis of a household survey of consumers' opinions on current conditions and future expectations of the economy. 5/13.Consumer Confidence = At Five-Year Highs.3 0 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 Note: Index started in 1967 / benchmarked to 1985=100. Source: The Conference Board.1 100 80 60 40 20 2/09 Trough CCI = 25.5 4/13 CCI = 68. 1978 – 2013 YTD 160 140 120 Consumer Confidence Index (1985=100) 35 Year Average CCI = 91. 111 . Though Still Well Below 30-Year Average The Conference Board Consumer Confidence Index.

112 .Consumers Less Concerned About Employment. More Concerned About Rising Prices Percent of USA Respondents Citing Their One Most Important Issue. 4/13. 4/09 – 4/13 Q. which one of the following economic conditions most concerns you? 54% 50% 46% 42% 42% 44% 45% 42% 32% 32% 28% 29% 29% 33% 30% 36% 27% 43% 38% 37% 48% 44% 47% 45% 34% 31% 45% Unemployment / Job Security Rising Prices Financial Markets Real Estate / Home Values 40% 37% 33% 37% 31% 26% 33% 4/09 7/09 10/09 1/10 4/10 7/10 10/10 1/11 4/11 7/11 10/11 1/12 4/12 7/12 10/12 1/13 4/13 Source: comScore surveys. Based on your current situation.

Source: FactSet.Stock Markets = Often Leading Indicators of Economic Activity Stock / Commodity Markets Performance (% Change From 1/93). 1/93 – 5/13 800% 700% 600% Index Value (1/1/1993 = 100%) 500% 400% 300% 200% 100% 0% 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 S&P 500 NASDAQ China Shanghai Composite MSCI Europe Oil Gold Note: All values are indexed to 1 (100%) on Jan 1. Data as of 5/24/13. 1993. 113 .

USA, Inc. – Biggest Gap Between Revenue & Expenses in USA History Outside of World War I & II
USA Inc. Revenue & Expenses as % of GDP, 1901 – 2012
50% Revenue as % of GDP (Left Axis) Revenue & Expenses as % of GDP 40% Expenses as % of GDP (Left Axis) Real GDP (Right Axis) $16 $14 $12 $10 $8 20% $6 $4 10% $2 0% 1901 $0 1911 1921 1931 1941 1951 1961 1971 1981 1991 2001 2011 Real GDP (in Trillions of 2005 Dollars)
114

Biggest Gap Between Revenue & Expenses in USA History Outside of World War I & II

30%

Source: 1910 – 1930 per Census Bureau, 1940-2012 per White House OMB. Real GDP adjusted for inflation, in 2005 dollars.

Where Your Tax Dollars Go – Entitlements = 59%
% of USA Federal Government Spending, 2012
Entitlements Defense Other* Interest

59%

19%

16% 6%

0%

20%

40%

60%

80%

100%
115

Note: Federal entitlement expenses include Social Security, Medicare and Medicaid. Source: White House OMB.

USA Social Security + Medicare + Medicaid + Interest Payments Should Exceed Federal Revenue Within 12 Years, 35 Years Sooner than 1999 Forecast, per CBO
Federal Social Security + Medicare + Medicaid + Interest Payments vs. Revenue as % of GDP, 1980 – 2042E
40%
Revenue Federal Social Security + Medicare + Medicaid + Net Interest Payments

30%

% of GDP

20%

10%

0% 1980 1990 2000 2010 2020E 2030E 2040E

Source: Congressional Budget Office (CBO) Long-Term Budget Outlook (6/12). Data in our chart is based on CBO’s ‘alternative fiscal scenario’ forecast, which assumes a continuation of today’s underlying fiscal policy. Note that CBO also maintains an ‘extended-baseline’ scenario, which adheres closely to current law. The alternative fiscal scenario deviates from CBO’s baseline because it incorporates some policy changes that are widely expected to occur and that policymakers have regularly made in the past.

116

KPCB is a venture capital firm that owns significant equity positions in certain of the companies referenced in this presentation. and should not be construed as providing any particular recommendations or analysis for any specific company that is mentioned in this presentation.Disclosure The information offered in this presentation speaks to industry trends in general. 117 .