UK consumers have embraced data-hungry services like Facebook and Google, but many also have concerns about privacy online; young people have a more positive view of the trade-off and know how to avoid targeted advertising

Businesses that are conscientious about consumers’ data gain their trust, and the gap between trusted brands and the market as a whole may grow substantially in the future

Despite Edward Snowden’s revelations on ‘Big brother snooping’, the UK Government has secured vast access to communications data without serious challenge to date

At its f8 developer conference, under the slogan “Build, Grow, Monetise”, Facebook rolled out a slew of new policies and initiatives designed to boost its appeal amongst users, app developers and advertisers

In its drive to encourage developers to build more apps that support the social network, Facebook is attempting to position itself as a “cross-platform platform” with 1 billion+ users that sits on top of iOS, Android and other mobile operating systems

Key announcements included App Links, an open source solution enabling linking across apps, which may drive additional usage, and Facebook Audience Network, an app ad network rolling out this year, which should drive additional margin and could challenge Google AdSense

Facebook has successfully transitioned its business to mobile, with the number of mobile users now exceeding those on PC, and mobile newsfeed ads accounting for nearly all revenue growth and over half of total revenue, now on a $10 billion annual run-rate

North America and Europe continue to account for the vast majority of revenue and revenue growth, despite flat audience penetration in both regions, as increasing mobile consumption and advertiser take-up have driven sharp increases in ARPU, particularly in the US

Despite tougher comparables and declining desktop revenue going forward, the rapid ramp up in mobile ad revenue, plus initiatives such as video ads, ads on Instagram and planned mobile ad network, should deliver strong growth through 2014 and into 2015

In an audacious move to minimise the risk of mobile social disruption, Facebook is to acquire leading messaging app Whatsapp for up to $19 billion, or $42 per user, or 11% of Facebook’s current market cap

Messaging platforms are becoming the new social media, particularly for younger demographics, and while Facebook/WhatsApp will be huge in mobile, other services could still side-step into Facebook’s territory

The price for WhatsApp may be justifiable to counter the threat, but Facebook has only bought one of many, and paying a full price may encourage the others; expensively buying every competitor does not feel like a long-term strategy

Explosive growth in take-up of smartphones and tablets means that the effective size of the internet will increase by several multiples within the next few years. This transformation in scale comes with a major change in character and operating dynamics, creating new opportunities and revenue streams.

Twitter is unique amongst social apps: it gives new users a blank canvas in which they can (and must) create their own social network reflecting their own interests, hence building an ‘Interest Graph’, but onboarding new users remains a challenge.

Revenue at Twitter is now on a $600 million annual run-rate, scaling rapidly since the introduction of ‘native ads’, and seems set for further growth: the key question is whether it can achieve breakout user growth and mass market scale.

2013 has seen yet another year of strong growth in consumer adoption of mobile devices and screens adding to the challenges facing traditional media. Press and radio have long been affected, but television is now starting to feel the heat

BT and Sky’s contest for premium pay-TV sports rights has intensified. August saw the launch of BT Sport, while BT’s acquisition of the European football rights in November was a clear statement of intent, spending half of Channel 4’s total programming budget on approx. 200 hours of content

The UK has seen buoyant advertising growth of around 4% in 2013, with similar growth expected in 2014, in the context of the strongest economic recovery in Europe

Facebook has announced Home, an Android app that takes control of your phone, replaces the home screen with your Facebook newsfeed and relegates any competing social services to, it hopes, an afterthought.

At launch, Home will be available to at most 20% of Facebook’s mobile base. It is an interesting tool to lock in core users and drive up their engagement, but can only be part of Facebook’s mobile strategy.

Facebook has strong mobile user and revenue growth, but has not ‘won’ social on mobile as it has on the desktop, and competing services have drawn hundreds of millions of users. It is not yet clear Facebook will win, or even that there will be a single big winner.

Around 125m smartphones were sold globally in Q2, up over 30% from Q2 2011. Around 450m mobile handsets were sold in the quarter, giving smartphones a volume share of around 28% Apple and Android dominate with a combined of 85% of units sold, and a cumulative total of 810m devices running their mobile platforms. Of these we estimate that 680m are active, of which 95m are tablets Android arrived later and has grown faster, but Apple’s market share of smartphones as been steady at 20-25% for several years: Android’s growth has come at the expense of Nokia, RIM and feature phones