Opinion

Chrystia Freeland

Yuri Milner on the future of the internet

By Peter Rudegeair
September 23, 2011

This is a transcript of Yuri Milner’s presentation to the Yalta Annual Meeting in September 2011. To read Chrystia’s column about the presentation, click here.

A few months ago not three but eight leaders in the world gathered at Deauville in France at their regular G-8 meeting. But for the first time ever they invited six businessmen to meet with them and talk about the future. It’s interesting that four out of six were related to internet, and then I was among those invited. Each of us was given three minutes to say something, and I will now present to you a slightly expanded version of that presentation that I gave back then.

If we can look at the slide number 1, that you hopefully can see on the left-hand side, it basically shows the unprecedented growth of internet users globally. And I just want to bring your attention to the fact that this is probably the fastest proliferation of any technology ever, and the most fundamental fact being that right now around 2 billion people are connected to the internet and in the next 10 years you will see another 3 billion added to that number to a total of 5 billion people connected around 2020.

If you turn to the next slide, one would assume that internet is only about people, but actually it’s not. Around 5 billion devices are currently connected already, and this number will zoom to more than 20 billion devices connected to internet 10 years from now, and this will add to 5 billion human beings, so you would assume that there will be 25 billion people and devices connected and producing information.

On slide 3, I would like to bring your attention to one really unprecedented and not very well appreciated fact: how much information is actually being created. If you add all information that was generated by the mankind for the last 30,000 years beginning with the first drawings on the walls of the caves until year 2003, equal amount of information was created last year for only two days. It took two days to create equal amount of information to the one that was created by all people that ever lived from the dawn of civilization until 2003. And moreover the same amount of information will be generated in ten years from now only within one hour.

On the next slide, I want to show you that not only is information being created, but it is also being shared among people. And it is being shared at the ever increasing pace, and the pace is actually accelerating. One of the companies that we’ve invested in is called Facebook. In only two years, between 2009 and 2011, the information exchanged between people increased 28 times. And that cannot be explained by new people joining Facebook. Actually every single participant in this process is exchanging multiple times more information than only two years ago. Same applies to Twitter, where in the last two years we have seen a tenfold increase of the information that is created and distributed and exchanged on Twitter. And a very small fraction of this information is created by organized institutions like news organizations, and the vast majority of it is created by people themselves, and consumed by people who are interested to hear the newsfeed that is being produced by other people. If you are not the user of Facebook or Twitter but probably user of e-mail, you might have noticed that in the past few years the number of e-mails that you have been receiving daily was actually exploding. On average we are now receiving six times more e-mails than just four years ago.

And on the next slide I want to explain where it’s all leading, and it’s all leading to really unprecedented proliferation of Internet media compared to traditional media. The largest newspaper in the United States is only reaching 1 percent of population. We are kind of assuming that Wall Street Journal, USA Today, and other newspapers are very important. Yes, they’re extremely important, but only to 1 percent of the population on a daily basis. And that compares to internet media, which is used by 25 percent of the population daily and growing. The largest TV channel is reaching maximum of 10 percent of the population, and this ratio is constantly going down with the increasing number of channels that people watch and the further fragmentation of people’s attention.

On slide 6, one can see a very important trend which is accompanying this creation of information and emergence of internet businesses that are actually much more efficient than traditional offline businesses. Big internet company on average is capable of generating revenue of $1 million per employee, and that compares to 10 to 20 percent of that—$100,000 to $200,000—that is normally generated by traditional offline business of comparable size. And this efficiency is not going away; it’s with us to stay for a long time. And that creates alongside these efficiencies serious challenges for offline businesses trying to compete with online businesses. I was really deeply impressed by one fact that became apparent to me when we first invested in Facebook. Each single engineer in Facebook is capable of supporting 1 million users. There are only around 700 engineers working at Facebook, and there are more than 750 million users of Facebook, so that level of efficiency is really unprecedented and unheard of, and it never happened before. And this efficiency will deeply influence every single sector that we recognize as a traditional sector.

And on the next slide 7 I would claim that every type of human activity will be deeply influenced by internet. And the next sectors to be impacted I would forecast will be health-care and education. With digitizing clinical records and new educational institutions emerging allowing outstanding scholars to address tens of hundreds of thousands of users at the same time. In this September semester at Stanford, there is one experimental course of teaching artificial intelligence that is read by an outstanding professor for the first time online with 58,000 students signing up—not only from Stanford, but from every corner of the world—and this course is actually free.

On slide 8, I want to emphasize the next big trend, which is the accelerated emergence of artificial intelligence, which is capitalizing on all the information that is being generated everyday and every minute. We used to think about companies like Google as really a part of our lives and pretty static. We go use Google today, we use it tomorrow, and we believe that it is the same algorithm. But in fact algorithm is changing every week based on searches that we make and based on the feedback that users provide by using the service. And that’s what makes companies like Google so pervasive and almost monopolistic that their algorithms are constantly adjusting to better cater to our needs based on our feedback. And this virtual cycle continues at an ever increasing pace, making these companies even harder to catch up with. The same applies to Amazon which is trying to sell us new goods based on the ones that we already purchased, and Facebook, which is trying to form our relationships based on the relationships we already have. They have a very interesting feature that suggests new relationships to us, and these algorithms are so good right now that there is a more than 50 percent chance that we will accept friendship based on this artificial intelligence recommendation. And I clearly see that times that are not so far off where companies like Facebook will be in fact forming our social connections to a very significant extent.

And on the last slide today, I just want to draw a little bit of a futuristic picture, which is the emergence of the global brain, which consists of all the humans connected to each other and to the machines and interacting in a very unique and profound way creating an intelligence that does not belong to any single human being or computer but really spread out and living its own life and defining significantly the actions of each particular individual in the not so distant future. One striking fact is that about 20 percent of the global energy 10 years from now will be dedicated solely to maintain this global intelligence, and this number is around 10 percent already today in developed countries. And that actually can comfortably compare to 20 percent of calories that our human brains consume daily to support our traditional intelligence.

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They have a very interesting feature that suggests new relationships to us, and these algorithms are so good right now that there is a more than 50 percent chance that we will accept friendship based on this artificial intelligence recommendation. And I clearly see that times that are not so far off where companies like Facebook will be in fact forming our social connections to a very significant extent.

This is the scariest thing I’ve read in a long time.

Posted by lhathaway | Report as abusive
 

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