Influential Internet Analyst Mary Meeker Defends Internet's Future Despite Downturn
Stanford Business School — May 7, 2001 — Controversial Internet analyst Mary Meeker defended her role in cheering on technology stocks' rocket-like rise of recent years, and said she was still optimistic despite their present lowly state.
In a week when Fortune magazine splashed her face on its cover with the words "Where Mary Meeker went wrong", she told an audience here that her team at Morgan Stanley had made the best calls possible with the knowledge available at the time.
Hers has been one of the most influential voices in the industry, helping to usher billions of investor dollars into the emerging sector and its then-unfamiliar names like Netscape, AOL and Priceline. Lately, however, she has been criticized for contributing to the Internet bubble and not predicting its deflation last year.
Her lunchtime talk on May 7 was organized as part of the Stanford Business School's View From The Top series, but she quipped that in her case it was "a view from near the bottom".
She said of the bad press she has received of late: "Did we do the best we possibly could? Yes. Did we do better than everyone else? Yes."
She also gave an insight into her reluctance to downgrade her ratings on some Internet stocks. "My biggest fear as a stock picker is, I cannot bear the idea of looking back on Yahoo one year from now and saying, how did I ever think that a company with 190 million unique visitors per month, and one of the most powerful brand names in the world, wouldn't be able to figure out how to more effectively monetize its customer base," she said.
Noting that Internet penetration was still low compared with telephones or cable television, she said that the next five years would continue to see strong growth, and with it "lots of opportunities to make money and grow businesses".
She said that firms would be able to sell "almost anything" online, although e-tailers such as the troubled Webvan grocer were "ahead of their time".
Now, most people have to log-on whenever they need to use the Internet— confine their surfing to the office. But once most homes have broadband connections, people would be able to keep their Internet on all the time. "The user experience will be changed dramatically," she said.
She pointed out that the Internet auction site eBay was already a major platform for trading used cars, with half of the customers not seeing the cars before buying them.
Meeker added that the sluggish economy could actually spread the use of the Internet as a business tool among traditional, "old economy" firms that had been skeptical of it in the past. "People are more focused on it than ever, because it is a driver of cost savings," she said.
On lessons learned from the winners and losers thus far, she highlighted the importance of great entrepreneurial leaders such as Scott McNealy, Michael Dell and Bill Gates. "They're just very unusual," she said.
She added that the No. 1 mistake of start-ups was to go after too small a market. "It's better to aim for 10 percent of a $1-billion market than 100 percent of a $100-million market."
She conceded, however, that not everything was open to calculation and analysis. Reflecting on the events of the past few months, she concluded: "Bad luck and randomness are part of life, and we have to live with them."