Does This Blog Get More Traffic From Google or Twitter?

Unidentified Host: Just to go back here, one of the things that you've been blogging about recently is this idea of earned media and how earned media can in some ways be more valuable than paid media. Could you explain? I think a lot of people haven't read your stuff and I think they'd benefit from understanding what you're talking about this concept of earned media and why it's important.

Mr. FRED WILSON: Well, earned media is not a new term. I kind of stole it from the PR business. The PR people used to pitch you that you should spend $10,000 a month with them instead of $10,000 on advertising and that they'll earn you your media as opposed to paying for it. But my assertion is that social media - and I think of social media as Facebook, Twitter, blogs, blog comments - is a place that all kinds of marketers can go to earn media, and what they need to do is they need to be present in the media. They need to create the media. In some cases where they need to be conversational in the media, they need to have a fan page on Facebook, they need to have a Twitter account, they should be blogging, they should be commenting on blogs. And in the process, they can in a - there's a correct way to do it and an incorrect way to do it. You can't spam but you can earn the right to have a conversation with people and say, "Hey, guess what? We got this great service called Animoto, you can create videos using photos and, you know, you ought to come check it out." And if you do that at scale, and some of these systems are at scale, Facebook and Twitter for sure are at scale, then you can earn a lot of traffic that you don't have to buy. It's interesting to note that every single one of these companies doesn't pay for their 100,000 unique visitors. Now, a lot of them are getting it from Google. Google Organic SEO was the original earned media. It's the gift that, you know, Google gives everyday. But my blog now gets more traffic from Twitter than it gets from Google. And that's unique, and I think that's probably true for TechCrunch as well.

Mr. MIKE ARRINGTON: No, no, your blog doesn't get more traffic from Twitter than Google.

Mr. WILSON: It does because if you include a lot of the direct traffic that's actually coming through Twitter, I get about 20 to 25 percent of my unique visitors a month from Twitter and about 16 percent from Google.

Mr. ARRINGTON: No, that's incorrect.

Mr. WILSON: I'll give you my blog, man. I will give you my referrals.

Mr. ARRINGTON: (unintelligible), but the last time I checked, we were like 15 percent Google and a respectable, like three percent, four percent for Twitter, I think. But I'll ask your TechCrunch.

Mr. WILSON: I actually published my referrals on my blog and you'll see that I get about 10 or 11 percent from Twitter and about 16 percent from Google, but I also get about 38 percent direct, and I'm pretty sure that a bunch of that direct traffic is actually coming from third party Twitter clients. I'm pretty sure that I'm getting more traffic from Twitter than I'm getting from Google.

Mr. ARRINGTON: OK, so you were - OK. Well, we'll have to compare the stats because that seems a little bit wrong.

Mr. WILSON: But it's - first of all, I'm an investor on Twitter. I talk about Twitter…

Mr. ARRINGTON: Right, so you have an incentive to make stuff up about it.

Unidentified Man: But he also has a lot of Twitter users believing as well.

Mr. WILSON: No, I told you, I will share my referrals. I'm not making stuff up. But the point is that there is a lot of traffic that one can gain, and not just from Twitter, by the way. I think Facebook in many ways is even more powerful with over 200 million unique visitors a month versus, whatever Twitter is at 50 or whatever. So, you know, it's - these are systems that you could use to get some of your 100,000 unique visitors that you don't have to pay for, so that's the concept.

Unidentified Man: I want to add for just a moment. We went crazy on this, you know, for about a year, and that's how we drove traffic through the roof, but it didn't really change revenues. Conversion fell at the same time. Now, what we've found is that when people are searching for an address, they would come to our Web site but they never bought anything and we don't make any money just from traffic. We have to get them to jump through all these hoops and buy a house. And so the traffic that we get from Twitter, from Facebook, from referrals is much more valuable to us once we track back whether those people end up buying because they have heard from a friend that Redfin is good, not just done a Google search and found 123 Main Street and ditch the site two seconds later.

Mr. ARRINGTON:  Can we just - can we - are we - I don't quite understand. The e-mail that you guys sent out before this, prepping us, that maybe we shouldn't ask Fred about Twitter questions directly. Do we embarrass him?

Mr. WILSON: You can ask.

Mr. ARRINGTON: Is it – I think it would be fascinating to talk a little bit about a site that is so prominent culturally that hasn't actually started generating revenue yet.

Mr. WILSON: OK.

Mr. ARRINGTON: Should I ask the questions?

Mr. WILSON: Sure, ask questions. I might not – won't be able to answer it but I'm going to try.

Mr. ARRINGTON: So I'll ask you the question that you don't think I'm going to answer. First, I'm not going to ask you how they are going to make money because you're clearly not going to answer that. You've been asked that every time you've been on a panel for the last six months, but here is the question. Twitter hasn't started generating revenue yet, at least, any real revenue. Why? And is the reason, it seems to me there's one of two reasons, but maybe there's another one, but is it because like YouTube, YouTube got far from over 1.65 billion dollars on zero revenue. Once you have revenue, there's this knowing sort of fact that buyers want to value you based on their financials as opposed to, you know, other things or is it that they really just haven't, you know, figured it out yet or is it that revenue is friction that will slow down growth?

Mr. WILSON: Well, I don't think that they are going to employ any revenue models that aren't going to be friction through the slow down growth. So that is not - certainly not the reason. I think the reason is largely because the management team believes that they are better off right now focusing on growth at all costs and so when they look at an investment of x millions of dollars to build out a revenue system or an investment of x million dollars to build out a whole bunch of new (unintelligible) sets or add a bunch of new things to the API, they've just been making a decision to invest in growth and invest in the product. And there's going to come a time when they are going to stop doing that but they haven't reached that point yet.

Unidentified Host: Let me ask you a quick question just to follow up on somebody's earlier comments just for some real practical feedback. Are you finding that the traffic - and I'm interested with what Fred thinks but also what these CEOs think. Are you finding that the traffic that comes from Twitter, Facebook, some of the other social sites has more valuable traffic than what you're getting from Google, from other sort of paid(ph) means because the traffic is coming from a friend or some sort of influential person theoretically to you?

Mr. WILSON: I'll give you an answer that I - initially what people think. Etsy, which is one of our portfolio companies, it's a market for handmade goods. It's an eBay style of market place sellers, sell to buyers, Etsy is not a retailer. They get conversion from Facebook and Twitter that approximates the conversion they get from Google. They actually get better conversion from Facebook than they do from Twitter but all three of them are in about the same amount of dollars. It's actually cents per visit in terms of what each visit converts. And they are - they are right around each other, so they - you know, social media, earned media, passed links, whatever you wanna call it, certainly in that market place are conversions(ph) as well.