Naspers joins internet Hall of Fame

Cape Town – Naspers stood proud on the podium of the internet Hall of Fame recently, when it brought South Africa to number three on its list of countries with highest internet earners.

Tencent, in which Naspers has a 34% stake, is the second highest company in China, which is second on the podium.

The World Startup Report, which conducted the research, took the top three companies from 50 countries representing six continents. It researched deeper into these 150 companies to give a glimpse into the state of internet businesses.

While Naspers [JSE:NPN] wasn’t third overall, it positioned South Africa as the third most dominant country, as companies like Facebook, Amazon and Google represented the mammoth US, which sits comfortably at number one.

Overall, Naspers is the seventh biggest internet company in the world.

Key findings included:

- 29 countries have one internet company worth $1bn
- Google has a higher valuation than the remaining 49 countries combined
- Alibaba, China’s e-commerce giant, has a valuation equal to the remaining 48 countries combined
- On average, communication is the most valuable internet industry
- e-commerce and search are the most  popular industries
- public companies are six times bigger than private companies, which are 10 times bigger than acquired
- Search and gaming are the “most mature” industries
- Seven countries with the highest valued companies come from three continents: Five are from Asia
- Of the top 10 countries by company valuation, eight companies are public, one filed for IPO and one is private.

See slide show:

Advice to start-ups

Be realistic about wanting to start a billion dollar company. “Only in very few cases will you be able to outperform the eco-system’s biggest companies by more than a 100%,” the report says. “If you want to build a $100bn company, you have to go to the U.S. or China.”

“You will take 10 years to build over [a] $1bn company,” the research shows, so don’t be dismayed when you see headlines showing overnight successes like Instagram – they are not normal.

The World Startup Report Team selected 50 countries in their research to represent a wide range of geographies, economic development levels, population sizes and many more. “In the end, we wanted to find out what sort of development is possible in each of these countries,” it explained when it released the research. “Our proxy [was] the historical size of internet companies and their respective valuations.”

The e-commerce and search industries could be considered the building blocks of each country’s internet growth, the research shows. “It is worth noting that even though individually, companies in these industries have the highest overall values, on average none of these categories has the highest value,” it explains. “Companies in the communication field are by far the most highly valued.”

- See the full document here with details from the report.

- Explore this useful infographic from the Economist.

- Follow Matthew on Twitter.

* Fin24 is part of Media24, a subsidiary of Naspers.

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