DISQUS

Mark Essel · 6 months ago

Very excited about monetization potential for not only social media (facebook/twitter/friendfeed) but for web content in general. The economy of the internet is evolving. I labelled gratitude as the virtual currency in social media, but that is usually shown with thanks and a link.
I'm worried about one hiccup. If passed links are the currency, how will advertising piggy back on them. Anytime I'm paid to refer something, my genuine recommendation has had all it's value removed.

I alluded to an alternative form of monetization as a comment a few days ago on your blog (http://www.avc.com/a_vc/2009/06/clearing-someth...). An advertisement window (very Googlish) based upon the meta data (semantic) of passed links.

Vladimir Vukicevic · 6 months ago

I think that's a great idea. It retains some of the "personal touch/trust" since it connects to actual passed links by real people, but it also is able to scale those links to a potentially viable ad model.

fredwilson · 6 months ago

Hmm

Vladimir Vukicevic · 6 months ago

Hmm = "Interesting and potentially good" or Hmm = "What the hell are theses guys talking about?"

fredwilson · 6 months ago

Hmm in this context means I need to think about it

Mark Essel · 6 months ago

Wrote up the idea/gathered the thoughts. Mockup included. The mockup could apply to any social media interface. A collaborative effort between meta data/meaning tools and social media would be idea. Monetization for Web2010: http://www.victusspiritus.com/2009/06/21/moneti...

fredwilson · 6 months ago

I'll check it out and get back to you

Kathi Frank · 6 months ago

Thanks for your perspective on how to make money on Twitter.

brisbourne · 6 months ago

Nice talk Fred. As a VC myself I particularly like the description of how you worked towards a conclusion on the value of passed links. Proprietary analysis of (semi) proprietary data is a great way to stay ahead of the pack.

fredwilson · 6 months ago

well we do a lot of that but we also share it with the world once we reach
the conclusions so i don't see it as proprietary in that sense

brisbourne · 6 months ago

True enough. I'm a big fan of your open approach.

jeffmyers · 6 months ago

I agree social media will continue to grow as a traffic source via passed links. A seismic shift of the type that you are talking about has the potential to reset the landscape as some companies will be ahead of the game and learn how to leverage. At the same time expect some existing leaders to falter as they fail to take advantage. Change of the magnitude you suggest always creates huge opportunities.

fredwilson · 6 months ago

That is what message should have been. I missed the punch line

Allan Isfan · 6 months ago

Fred,

I was in the crowd at 140conf and thought your presentation was absolute dynamite (imagine exploding perceptions). It was a positive wake up slap in head for many of us that opened our eyes to enormity of the impact of social networks, not just form a social aspect but a financial one. The realization that many sites could ultimately get more traffic from Facebook and twitter than google is stunning.

Your talk is inspiring a blog entitled "Social Linkonomics" where I will make the case that the economics of social networks are in fact tied to their ability to fuel the rest of the internet. Taking down the walls will be key to their survival and lead to an open social web where EVERYONE benefits.

Do you have a sense for the timing? For example, when will social networks will be responsible for say 10% of all traffic leads to other sites?

Cheers,
@isfan

fredwilson · 6 months ago

We are at the 10pcnt threshold now for many sites

Thanks for your kind words. I would not and could not have any of these insights without the constant feedback and conversations that happen here at AVC

journik · 6 months ago

Allan, Fred, My new blog gets 80% of it's clicks from twitter and RTs already. BUT this is NOT the big deal. My year old social community gets 30% of it's clicks from Google and 60% from Youtube. The YT originating viewers have 300% the page penetration that google does. And Twitter users have the same Youtube. In other words... One click from a twitter user is worth three from a google user.

fredwilson · 6 months ago

I didn't realize that youtube is that good at driving traffic. I've not seem it in refer logs myself. What kind of community do you have?

journik · 6 months ago

My youtube is an educational channel for gifted and advanced students, actually, making any student gifted and advanced.

Google naturally favors youtube videos for its search results so between my 20,000 subscribers (across 3 channels) and page one google visibility for keyword searches, If I start a series on "how to do long multiplication in your head," Then, make the last episode available exclusively to community members. The kids sign up.

sonicgleek · 6 months ago

links from someone you have an affinity for get clicked. period. so why not focus on that?

that's the plan for siginity ... it's one of the social sites being launched by social services startup sonicgleek.com

paulhart · 6 months ago

If you build a service that can take advantage of Twitter etc. as a vehicle that provides value to your customer as well as advertises your product, you're golden.

I'd be willing to pay for 'commercial' access to Twitter to enable that communications channel.

Scott Varland · 6 months ago

Great talk, Fred. I certainly agree about the power of social link sharing, but I'm wondering if this obsession with 140 characters will prevent Twitter from fully leveraging that trend. Sure we've got a s-ton of different URL shorteners, but those are hacks to cheat a limit that is /was imposed by arcane technology (and who Tweets from SMS anymore?). Facebook meanwhile (despite over engineering and numerous missteps), is releasing a rather snazzy Stream API with native support for links, images, video, and other rich data sources. How far can 140 characters actually take us?

fredwilson · 6 months ago

I'd look for twitters api to evolve. It already has and it will continue to do so

Jeremy Campbell · 6 months ago

I agree that Google is so important because of the traffic it sends to websites, especially the important organic traffic. Twitter is for sure heading in this direction, and it's important because it's so real time which will become only more important going forward.

I'm putting Twitter into my marketing plan when I rewrite my company's business plan because I believe there is unlimited potential using the revolutionary service. I already get a 6%-19% CTR across my 4 Twitter accounts and assume it will only increase as I increase my permission with my followers.

Great job Fred!

Bruce Barber · 6 months ago

It's funny, Fred - tonight I've been going through my "thought leaders" RSS feeds. I just listened to Chris Brogan discuss his upcoming book "Trust Agents". Then, as I navigate to AVC, my ears perk up as you use terms like "passed links" and "trusted links".

"Relationships" and "trust" mean something again.

Maybe things aren't so bad after all...

fredwilson · 6 months ago

They never were for people who are pushing the envelope

charliepinto · 6 months ago

Great job, Fred! What do you think about semantic links evolving from sensor technologies? Say for example, I take a picture of an advertisement. Next, that advertisement is sent into a semantic link where everyone following me can click on it and either buy the product, watch a promotional video, or go straight to a website. Just a thought; I would really like something like that!

fredwilson · 6 months ago

Can you build it?

charliepinto · 6 months ago

Of course! It's an idea I have been playing around with. Now I just need a CTO to help me build it out :)

kevin · 6 months ago

this is another example of a great talk that i'd love to take with me on my phone or ipod. sigh. when will video sites add a "download" link.

Vladimir Vukicevic · 6 months ago

Thanks Fred. I appreciate you sharing this speech with us. I think you are spot-on about links being the currency powering the Internet.

You're helping to rightfully bury the arguments that Twitter will never be able to monetize its services. I completely agree that when the time is right Twitter will have plenty of diverse opportunities - I recently wrote about this, you might find it useful - http://vukicevic.blogspot.com/

Although you might be dismissing the disruptive power of scammers, phishers, etc. This is especially an issue with URL shorteners which add an additional layer of anonymity even when received from trusted parties.

fredwilson · 6 months ago

I agree about url shorteners.

Vladimir Vukicevic · 6 months ago

Twitter should think about developing some sort of pre-click link verification system, maybe in collaboration with Norton or VeriSign.

Who knows, that could be another potential revenue source. Verified links along with verified accounts.

fredwilson · 6 months ago

Cool idea

timo · 6 months ago

The lady who recorded this was Ulrike Reinhard. Just to mention it.

fredwilson · 6 months ago

Thanks. I didn't know who did that

henryyates · 6 months ago

Great talk - really clear and engaging. IMO I think you are better without slides.

fredwilson · 6 months ago

To be honest, I winged it.
I forgot that I had to talk about passed links so I spent about five mins prior to the talk going over my passed links posts from memory and then just went up there started talking.

I don't plan on doing that again but I think you are right about slides

henryyates · 6 months ago

This blog reads like a one to one conversation with your audience - your 140 talk achieved that as well. I think the Steve Jobs's of this world are particularly good at achieving that, which is part of the reason it makes them so engaging to listen to.

David Fishman · 6 months ago

As many hav said, really insightful, thank you. The one question I have is how will the SN's stay alive without a profitable business model? I run a ton of sites and also have seen the increase in traffic from the major and even some minor but well targeted SN's. I just dont know how of any of these sites/companies are going to be able to sustain their business without becoming profitable.

Vladimir Vukicevic · 6 months ago

Profitability is inevitable when there is a participatory audience of millions. That type of mass possesses inherent value that can pretty easily be tapped.

Mark Essel · 6 months ago

Vladimir, don't forget the dotcom 2000 IPO bubble popped because of a failure to consider and implement monetization. Users don't automatically donate cash because you give them something great. Businesses do when you make them more revenue.

Vladimir Vukicevic · 6 months ago

I agree, that's one of the few different reasons that popped the dotcom bubble. But I think that now, almost 10 years later, we live in a different world.

Membership fees are just one of many different types of potential income. Advertising is still important but it will have to be different from before. The reciprocity you mention is spot on.

Because of this, I think that advertising shouldn't be eliminated as an option and a large opportunity. Advertisers are looking for partners now as opposed to just a channel - as the downfall of newspapers and the success of Google has shown.

With the scale that social networking is reaching, figuring out new models can't be that difficult.

fredwilson · 6 months ago

Follow the money

Todd Zeigler · 6 months ago

Great talk. I've seen similar trends as you on sites I manage that (1) consistently churn out new content and (2) are engaged in Twitter and Facebook. Sites I manage that don't do these two things get pretty much no traffic from Twitter or Facebook, however. So I think it is a particular kind of site you are talking about here.

fredwilson · 6 months ago

right, but what that says to me is build engagement with facebook and
twitter and get free traffic