Pictures are worth more than words.
$2 billion, to be exact, in the case of Facebook’s Oculus acquisition, where the future potential of visually immersive social networking alone (forget the gaming applications) is supposed to make it all worthwhile.
This deal rekindled discussions around the emergence of the visual web and its future implications, but the truth is that the visual web has been coming of age for a while. Ever since a) digital photography became cheap enough for the mass consumer and b) broadband penetration got high enough to allow easier uploading and sharing of visual media, we have been on a steady path towards visual web domination. I believe that every major piece of functionality we value on the web as consumers will be transformed into a visual version. And if the current incumbent providers of such functionality don’t adapt appropriately, new companies will fill the void to create a lot of value for their investors.
Investors have already started to profit from this trend. 2012 and 2013 had the Instagram and Tumblr acquisitions respectively and Pinterest’s successive private valuations are continuing their stratospheric rise. But these are still the early innings of a game that gets even more interesting as new visual web functionality speeds up the mass global adoption of digital media, e-commerce and communications.
Humans are visual animals so it’s no surprise that in order to have mass adoption of new technology there needs to be a shift from text-based to visual content and interfaces. The parallels in prior technology adoption curves are many:
- In social networking, sixdegrees.com and other early efforts were niche until picture uploads became easy during the MySpace and Facebook era
- First-generation shared bookmarking/news sharing sites (Digg, Delicio.us etc) presenting URLs and text summaries: niche; Pinterest and clones pinning images: mass market
- Usenet newsgroup binary file sharing for videos: niche; YouTube: mass-market
However, some of the biggest categories have yet to “turn visual”. Start with one of the biggest ones: search. It’s been dominated by text queries (text search bar) and text results (URLs with short summaries), with the occasional photo or map thrown in if the query can be matched very specifically (e.g. a well-formed address or recognizable celebrity name). Why can’t we paste an image into a search bar, or double-click on a Facebook image post to begin a search? It turns out it’s really difficult to go directly from visual analysis of an image to an indexed set of results based on visual characteristics of some sort. Questions like “What’s the relevant part of the image?” and “What’s the implied intent of the user behind the search?” are very difficult to answer with just visual cues. But, to an investor, this complexity is what makes the opportunity behind visual search interesting. Superfish, a company in our portfolio, has demonstrated the ability to process images (starting with product-related ones) at massive scale and return results that are visually similar to the source image, regardless of spatial orientation, background image characteristics, lighting etc potential confounders. The conversion rate to clicks and eventual purchases (mind you: most of this is happening on sites that already have a text search bar somewhere on the page) is quite high, proving that there is real application of visual search technology at least for ecommerce purposes.
But why stop with product images in implied purchase intent situations? What about discovery opportunities resulting from our everyday interactions with the real world? After all, we experience the world around us through visual inputs for the most part, and real-world objects don’t come with tags attached or links that can be followed. Enter companies like Blippar or Metaio, who can trigger an augmented-reality like experience from everyday visual inputs consumed through a smartphone or tablet camera. Think of a “real world browser” triggered by the camera on your phone (or wearable gadget, or VR set, or whatever) where every movie poster on a bus stop can play the movie preview for you, or every piece of food packaging can trigger recipe instructions and videos, or every printed catalog picture can lead to an e-commerce instant transaction.
In such a world where visual content reigns there is an obvious need for both enterprise-class analytics and content management functionality to track all that visual content going around and to serve up new visual content in the right contexts. Companies like Piqora are pioneering the effort towards a visual web marketing suite for enterprises, signing up customers fast and furiously.
These are just a few examples of areas where the advent of the visual web is likely to shake up the current technology leaderboards. And the bigger the disruption, the bigger the opportunity for entrepreneurs and investors alike—I can’t wait to see what’s next.
Andreas Stavropoulos, DFJ Partner