Yuri Milner’s uplifting 20-year outlook for the consumer Internet

Consumer internet investors take note: Huge opportunities lie ahead as the rest of the world comes online.

So says Russian investor Yuri Milner, who projects that the value of consumer internet companies would grow a healthy 10x over the next 20 years to $35 trillion. That’s nearly double the $18.5 trillion U.S. GDP in 2016.

To listen to Milner tell it, this projection is a conservative one and does not reply on dramatic technology breakthroughs that could lift that 10x higher.

“It does not assume any revolutionary developments,” Milner said at the TechCrunch Disrupt conference in San Francisco on Monday. “It does not assume flying cars.”

Instead, Milner, an early backer of Facebook and Twitter, based his calculation on the consumer internet’s historical growth rate. Ten years ago, the value of consumer internet companies added up to $350 billion. In the following decade, that value grew to $3.5 trillion, a 10x advance.

Expect more of the same as online activity in the rest of the world catches up to that of the developed countries, he said. That includes not just an increase in the sales of goods, but of services, which have lagged behind merchandise. He sees transportation and healthcare sectors contributing to this service growth.

What’s also likely is that a small group of companies will continue to account for most of the value, he said.

As it stands today, five companies account for about 75 percent of the value with another 15 companies soaking up an additional 20 percent. The top tier includes Google, Facebook, Amazon, Alibaba and Tencent.

In 20 years, perhaps 10 companies will make up this first tier with perhaps 50 companies in the second tier, he said.

Photo of Russian entrepreneur and venture capitalist Yuri Milner (right) speaking alongside Facebook CEO Mark Zuckerberg at the Life Sciences Breakthrough Prize announcement in San Francisco, Feb. 20, 2013. Reuters/Robert Galbraith