A VC - Latest Comments in Welcome To The "Dark Side" Marc and Ben

Re: Welcome To The "Dark Side" Marc and Ben

booger — Mon, 16 Mar 2009 16:21:59 -0000

small wonder marc's going the vc route -- ning's not likely to make him rich again.

Re: Welcome To The "Dark Side" Marc and Ben

fredwilson — Sun, 22 Feb 2009 14:17:25 -0000

watching again now on my living room TV. here's some things i don't entirely agree with:

1) newspapers are not spending 90% of their time on print even though the vast majority of their revenue is still coming from print. i think they might be spending over half their time thinking/working on their online oppty

2) i wouldn't classify amazon as a "magic business". to me Amazon is a testament to Bezos tenacity and execution. that business is a slog not "magic" like google or microsoft.

3) i don't have a "special relationship" with my xbox. my son does, but i don't. i think its a generational difference between Marc and me. and that makes him a better investor than me in the games sector.

4) he uses the word "valley" to talk about the startup sector broadly. that's a mistake that silicon valley insiders make all the time. silicon valley represents less than half (maybe as little as 1/3) of all innovation/startup activity.

but i had to work hard to find stuff i did not agree with. i see the word almost identically to the way marc does.

Re: Welcome To The "Dark Side" Marc and Ben

alanp — Sun, 22 Feb 2009 14:12:52 -0000

that will be coming to TV ads soon as related to your online actions even with the recent beat downs of nebu ads and phorm. probably why google abandoned radio and print but still has hopes for tv.

Re: Welcome To The "Dark Side" Marc and Ben

FairlyPrice — Sun, 22 Feb 2009 01:00:42 -0000

It is absolutely wrong for him to use that headshot. Might as well use a baby pic.

Re: Welcome To The "Dark Side" Marc and Ben

Merl — Sat, 21 Feb 2009 18:30:53 -0000

Clarification: Physically, time has not been kind to Mark. But as long as you have your health, cheers!

But really, the press needs to stop using that picture from a decade ago.

Re: Welcome To The "Dark Side" Marc and Ben

alphanaliste — Sat, 21 Feb 2009 15:57:54 -0000

Wow, that would be creepy.

Re: Welcome To The "Dark Side" Marc and Ben

Aruni S. Gunasegaram — Sat, 21 Feb 2009 15:20:05 -0000

That's great. It's always good to have people who have built businesses investing in other businesses. I've found that a successful entrepreneur turned investor tends to add a lot more value to the companies they invest in...at least within the first 5 to 7 years they start doing it full time.

Re: Welcome To The "Dark Side" Marc and Ben

markslater — Sat, 21 Feb 2009 13:14:24 -0000

the value is surely contexting against the flow on facebook. you make a god point here, as does another commenter above. people are connecting on facebook - they dont spend much time on a page.

There have to be more opportunities beyond the site associated with what we are socially doing or what we socially choose to share with our network. Twitter i guess is a step towards this, but there surely is a more dynamic location aware way to leave your social jestream using facebook to connect.

Re: Welcome To The "Dark Side" Marc and Ben

fredwilson — Sat, 21 Feb 2009 12:46:17 -0000

What if the telephone had a recorder that advertisers could listen to and
then display ads on your TV while you are watching later that match the
stuff you talked about earlier?

Re: Welcome To The "Dark Side" Marc and Ben

fredwilson — Sat, 21 Feb 2009 12:43:20 -0000

S&P is down 30% over the past five years

Thomson/Reuters says that the 5 yr VC return is 8.6%

So VC has outperformed S&P500 by almost 40% in the past five years

Re: Welcome To The "Dark Side" Marc and Ben

EntrepreneurDude — Sat, 21 Feb 2009 12:27:21 -0000

I thought that was Dr Evil....

Re: Welcome To The "Dark Side" Marc and Ben

fredwilson — Sat, 21 Feb 2009 11:21:11 -0000

Nice one Kid. Love the supermodels line!

Re: Welcome To The "Dark Side" Marc and Ben

kidmercury — Sat, 21 Feb 2009 11:14:33 -0000

IMO the key to social networking monetization is in enabling influencers on social networks to make money. which is why i think ning and niche social networking in general is a better bet than facebook and the other mass social networks. with that said facebook is undeniably a juggernaut and now has more options than simply being a social networking destination, as evidenced by facebook connect, so perhaps there are new revenue opportunities that are not dependent upon facebook as destination as well.

and the alleged supermodels participating in this discussion may wish to upload their own pic to disqus before hatin' on marc's appearance. yes marc has more success and intelligence in his toe nail than the youngsters bringin' the hate will ever have in their entire existence, though being a jealous hater knockin' the dude's appearance is not the way to cope with that.

Re: Welcome To The "Dark Side" Marc and Ben

alanp — Sat, 21 Feb 2009 10:04:14 -0000

I completely agree with Stone. There is no doubt that Facebook can and will generate a certain amount of ad revenue because of their sheer size and massive inventory. Unfortunately for them, they are a communications site (like Yahoo Mail, AIM) and the value of ads on these sites is low for 2 reasons. First people move from page to page very quickly so the ads are often never seen by the user. second, users are engaged with other people, not the web sites or its content, so it is difficult to move the user from this mindset to an engagement with an advertiser. Adwords is a platform that works for the obvious reasons - consumers are LOOKING for an advertisers product or service. Facebook, while it may open up many opprotunites to leverage the word of mouth benefits of the site for its advertises, will probably never be able to monetize this with a universal platform. they will have to create one new ad concept/strategy after another with advertisers to drive success for advertisers. while they may hit some marketing homeruns as one-offs, it is not a scalable platform that will bring in the masses of advertisers they will need to make FB into the kind of succcess Google has generated. i just can't envision any platform that they can create for advertisers that will deliver the accountable and obvious value that advertisers need. I am a FB fan (as a user) but I rarely buy ads for my clients on this site becuase they don't work (from a direct response perspective).

I equate their problem to the telephone. While it might be a fantastic communication tool that everybody uses, the only ad revenue genreated by the telephone is from telemarketing - a nice business but it doesnt drive anywhere near the ad revenue that television does.

Maybe Facebook can't ever be monetized at the level we are all hoping?

Re: Welcome To The "Dark Side" Marc and Ben

ibankerinSValley — Sat, 21 Feb 2009 09:36:21 -0000

Excuse me Fred, but whats VCs overall ROI over the past 5 years and how does that compare w the S&P500?

Re: Welcome To The "Dark Side" Marc and Ben

fredwilson — Sat, 21 Feb 2009 09:10:09 -0000

Good point mike

Re: Welcome To The "Dark Side" Marc and Ben

fredwilson — Sat, 21 Feb 2009 09:03:12 -0000

Good points, all of them

I'm thinking hard about all of this and appreciate the diverging viewpoints

Re: Welcome To The "Dark Side" Marc and Ben

mdudas — Sat, 21 Feb 2009 09:01:22 -0000

In your understanding, are the ROI complaints from Microsoft sellers & their clients true for the social & engagement-type advertising, or more specific to click-through rates on targeted display ads? And how is ROI-being defined by these advertisers (I hope not solely click-through, as Facebook is a social media site - people interact with it very differently than they do Google search results, obviously, so the objectives of the campaigns & the way results are measured should be different).

The biggest challenge is demonstrating and getting advertisers, planners and buyers to agree on value beyond click as well as expanding comfort levels with online brand advertising that goes beyond traditional display. My company, TargetSpot, is working on this from the audio and video side of the business. Much of offline television and radio advertising is driven by branding - the clients understand this, accept it and have seen positive brand lift & awareness that drives measurable offline and online sales for years.

Note that much of what works in radio & local TV includes custom components such as station promotions, contests, on-air talent reads, etc. Online media companies are getting better at putting these packages together for advertisers, so I would expect the picture to get much less murky over the next few years.

Re: Welcome To The "Dark Side" Marc and Ben

stone — Sat, 21 Feb 2009 08:30:30 -0000

The folks at Microsoft would quibble with the view that no one has tried to monetize Facebook. In fact, they will tell you that the roi is so poor that they hate putting serious advertisers on the site, especially if they expect a decent click-through rate.

The real truth is about PR. They have a massive amount of traffic --- truly amazing --- but cannot find the repeating pattern that will turn that traffic into a massive cash machine like AdWords. So, what do they do? Keep using brute force to drive revenue while making it look like they don't really care. This buys them time --- time with employees, investors and anyone else that cares.

For a company that hasn't tried, they have built multiple ad/targeting products, held parties for NY ad agencies, struck multiple deals with Microsoft, fired Owen Vanatta (for failing to hit revenue numbers), etc., etc., etc.

Fred, you are very smart but you are falling for spin because you believe in Facebook. I will tell you that the picture is a bit murkier.

Re: Welcome To The "Dark Side" Marc and Ben

fredwilson — Sat, 21 Feb 2009 07:03:09 -0000

They are doing $300-$400mm in annual revs without even trying

If Facebook was being run by a media guy (say Tom Evans of Bankrate and
formerly Geocities), they'd be doing $1bn for sure with that kind of
audience and engagement

Zuckerberg has no intention or interest in doing that

Some of these young entrepreneurs are capitalists but not exactly rational
in the sense that we are

They are betting that by foregoing a dollar today, they'll make two tomorrow

I am not sure that's a good bet, but Marc is sitting on the board watching
behavior that I've seen as well

And I think he's right

Re: Welcome To The "Dark Side" Marc and Ben

fredwilson — Sat, 21 Feb 2009 06:56:08 -0000

That's not true. He's aged well as a person.

Re: Welcome To The "Dark Side" Marc and Ben

fredwilson — Sat, 21 Feb 2009 06:52:12 -0000

I'll go back and watch carefully and let you know

Re: Welcome To The "Dark Side" Marc and Ben

RexDixon — Fri, 20 Feb 2009 23:40:18 -0000

totally agree and said so on my tumblr stroll (rexdixon.tumblr.com) about 5 hours ago. :)

Re: Welcome To The "Dark Side" Marc and Ben

Saul — Fri, 20 Feb 2009 23:00:51 -0000

It is absolutely wrong for him to use that headshot. Might as well use a baby pic.

Re: Welcome To The "Dark Side" Marc and Ben

stone — Fri, 20 Feb 2009 21:30:13 -0000

One thing he said that is plain ridiculous: that Facebook could generate a billion dollars in revenue if they wanted to. Instead, they've decided to struggle raising money and suffer further dilution --- yeah, right! If they could generate a billion dollars my guess is they would. Since they are not doing anything close to these numbers it's safe to think they cannot .