Internet, Startups

Power of Passed Links

Fred Wilson, a VC and blogger and investor in Twitter, talks about the power of Twitter to drive traffic.

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He says that among their portfolio companies, traffic from Twitter and Facebook is now about 20% the amount of traffic driven by Google; that it is growing about 3-40% per month; and that if that growth rate continues, Facebook and Twitter will drive more traffic to their portfolio companies (excluding Twitter, obviously) than Google within a year or two.

As I wrote two months ago, I get that the potential for traffic growth is very attractive. The question for me remains is there some fundamental benefit that will allow this to happen, or are we just seeing a bubble inflate right now:

So why the hype? Traffic. People — bloggers especially, those in Silicon Valley or the tech industry even more particularly — have realized that Twittering can send traffic.  This is why Jason Calacanis offered $250,000 for one of the 20 recommended user slots on Twitter.  It’s why so many top twitterers include links in their tweets, usually to their own properties. And why so many in the SEO/SEM business have flocked to use Twitter.

So it’s all good, right? Twitter is the new Google, a new fountain of traffic for web properties? That depends on how you look at it, and whether you think Twitter provides some essential, fundamental value. If you question whether it provides much value other than the potential to drive you traffic, the Florida real estate cum ponzi scheme analogy goes like this: people are flocking to Twitter mostly because they believe it has the potential to drive traffic, and as long as people flock in that perception is fulfilled.

The problems start occuring when the growth slows down, or stops.

And this movie, we’ve seen it before. Digg and Facebook got the same (ok, not quite the same) levels of hype in their days of ascendancy, for the same reasons. People thought they could be tamed, harnessed, used as traffic hoses. As growth (or the perception of growth) in traffic from those services decreased, so to did the hype attendant on them decrease, at least among the digerati. But unlike Twitter, one could argue Facebook, and to a lesser extent Digg, provided some more meaningful, underlying value to their end users.

I still think that the jury is out.


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