A VC

Mr. BATTELLE: And help me please welcome our first conversant, Mr. Fred Wilson. 

Mr. WILSON: Hello. 

Mr. BATTELLE: Welcome. 

Mr. WILSON: Thank you. 

Mr. BATTELLE: So, Mr. WILSON… 

Mr. WILSON: Mr. BATTELLE… 

Mr. BATTELLE: You often get to be the proxy for a little application that six months ago had three million users and now has 35 million, 31 – 35 million. 

Mr. WILSON: Right. 

Mr. BATTELLE: Twitter. What did you see when you decided to invest in Twitter? 

Mr. WILSON: Well, for me it was really pretty simple. I’ve been blogging for close to six years now and it takes me a good 30 minutes every day to write a blog post and when I started using Twitter, I realized that I could communicate some of the insight that I was trying to communicate every day in 20 seconds. And I saw that I was doing that four, five, six times a day and having a similar amount of impact in a much lighter way experience for me as a content creator. And the fact that Ev and Biz and Jack had a history in the blogging world, I kind of saw this Blogger 2.0 and that was my investment thesis. It wasn’t really much more than that. I mean, obviously, much more has happened since then that has made it much more than bloggers but… 

Mr. BATTELLE: It made you seem much smarter than maybe you actually were. 

Mr. WILSON: Exactly. Every investment I’ve ever made that has worked out fabulously is always a case that the investment played out in a way that we didn’t imagine. 

Mr. BATTELLE: So, I guess, the next question I was going to ask you, you may have already rendered it moot, but what is your investment thesis? 

Mr. WILSON: For Twitter? 

Mr. BATTELLE: Well, just in general. When you look to invest in a company, do you have a larger thesis about what’s happening in the world? 

Mr. WILSON: Yeah. A couple of weeks ago, I was privileged enough to be able to give a talk at Google and the talk was about how the Internet is disrupting industries and that’s our investment thesis. If you really want to go look at our investment thesis and you have an hour to spare, go watch that Google video. And our thesis is pretty simple. The Internet is a disruptive force, it’s one of these, you know, once every hundred years kinds of things that it goes all the way through pretty much all industries. Certainly, the Internet is going to do this to every industry that is end-to-end digital. The media industry I think was the first because it is probably the most end-to-end digital, but there are many more industries. And that is basically at a 30 thousand foot macro level, that is our investment thesis. 

Mr. BATTELLE: You seem to have been focusing many of your investments in the area of media and marketing disruption. Is there a reason for that? 

Mr. WILSON: Well, we’re here in New York and those industries are heavily concentrated here. We understand those industries pretty well. And we have seen the kinds of things that can really shake things up in that category and we thought media was going to be first. So, that is why we’ve done a lot. And we also in “Web 1.0” made a bunch of investments like the industry standard… 

Mr. BATTELLE: I’m sorry. 

Mr. WILSON: Inside that… 

Mr. BATTELLE: You just let us sell when the guys want. 

Mr. WILSON: Exactly. But we saw that… 

Mr. BATTELLE: We don’t have a history or anything. 

Mr. WILSON: Because we have a lot of history. But we saw that taking the traditional media model and just putting it on the Internet wasn’t enough. And the big investment success that we had back in the late 90s was GeoCities. And that allowed me to realize that it really isn’t about just taking a magazine or a newspaper and putting it on the Web. It’s really about turning us, the people who are on the Web into the content creators. And so, if you look at our portfolio, most of the things we’ve done in disrupting media have been around citizen journalism or social media. 

Mr. BATTELLE: So, before I want to drill down a little bit into Twitter because I actually twitted right before you came on and said, what do you want to ask Fred. And I got the same question over and over again which I’m sure you already know what I’m going to ask. But, can you list three or four or five of the investments that you’ve made besides Twitter that you think are sort of timely right now? 

Mr. WILSON: Well, you know, it’s easy for me just to talk about the most successful ones. I’ll try to mix it up. We have a company called Zynga which is the leading social gaming company. So, they have about 25 games that run on eight or nine different social networks and have amassed an enormous audience. I don’t know if it’s public or I can even say but, they have as many daily game players as any web-based gaming service out there. And they’ve done that in a year and a half on the back of social networks. 

Mr. BATTELLE: And Texas Hold’em Poker. 

Mr. WILSON: But, Texas Hold’em Poker is actually not their biggest franchise. Their biggest franchise is a game called Mafia Wars – 

Mr. BATTELLE: Oh, yeah. 

Mr. WILSON: …which is one of the best social games, maybe the best social game. So, that’s one company. Another company is Boxee. You showed a logo of Boxee. Boxee is a browser, a social browser, kind of like what Flock, I think, is trying to be. Except it’s designed only to be run on TVs and devices connected to TVs. So, it’s a browser that’s designed for the 10-foot experience and it’s social. So, if you and I are friends on Boxee and you watched, you know, some movie, I see that. You can recommend it to me, you know, it’s a little bit like Twitter in that way. That would be another one. Disqus which is a company that a lot of people scratched their heads about why are you messing around with a blog comment service? I think blog comments are very important piece of the social media landscape. I think of, sort of the four big channels in social media as Twitter, Facebook, blogs and blog comments and Disqus is the leading provider of third party comment system on the Web. And so, you have for five, Meetup, which is also a social media company hiding as a service that gets people off the Web. 

Mr. BATTELLE: Now, I’m thinking about each one of these and it’s true. When you look at Meetup or Disqus, Zynga, Boxee, I want to talk about separately. But, even Boxee, I know that Boxee is sort of a half a million or so, a little more, the rest of them, very, very large in terms of the amount of people that are involved with this service in some way. A really funny headline crossed my e-mail this morning and the headline, it was from one of the news services that I subscribe to. I can’t remember which, which is kind of one of the problems that news services have. But, it said “Susan Boyle Fails to Monetize Massive Web Popularity.” So, this is the woman who just lost the British version of American Idol which I'm sure that in England they would kill me for saying that because it started there. But, she's got millions of YouTube plays and this is just you know as huge instant web star.  But, the headline in the industry publication was that she failed to monetize that massive population. Do you worry about that for something like Zynga or something like Disqus. 

Mr. WILSON: I don't worry about it for Zynga because they’re already monetizing at a phenomenal rate, let’s leave it at that. But, yeah, we worry about it with every single one of our services. I mean, I worry about it with Twitter, right. Twitter has no revenue so… 

Mr. BATTELLE: That was a bridge to the next question. 

Fred: So, this is a hard thing to do, to figure out how these companies which are based implicitly on delivering a free service to get mass adoption. And then, you can’t turn around and start charging people to use it. That will end the party right then and there. So, you have to come up with some way to monetize these services and I think there is no one way. That’s the problem. I mean, in the early days of the Web, it was slap-a-banner ad and then we got to search and everything was about clicks and paper clicks. And now, we’re in this new world and I don’t think there is going to be one magic bullet that solves the problem in terms of monetizing social media. 

Mr. BATTELLE: Let’s jump into Twitter. 

Mr. WILSON: Right. 

Mr. BATTELLE: There have been an awful lot of, I’m sure, very helpful speculation on what Twitter’s business model or models might be. Can you enlighten us on the ones that at least you and the team pay attention to or find worthy of consideration? 

Mr. WILSON: Sure. I don’t want to get on in front of Ev and Biz on this but I can amplify some of the things they’ve already said and maybe give you a little bit more insight. They feel very strongly that they’re not going to charge people to use Twitter. So, that’s not going to happen and I think Biz was very clear a week or two ago that they think banner advertising is a pretty unlikely solution to that. So, the things that they’re more interested in are creating premium accounts for people who need premium accounts. The kinds of people who need premium accounts are businesses that are doing real business on Twitter, celebrities who need to be known as, if it’s Oprah, you need to know that it’s Ophrah. If it’s Mr. John Battelle, you need to know it’s Mr. John Battelle. So, there’s… 

Mr. BATTELLE: Now, I have, no one else does, but I have to pay. 

Mr. WILSON: You need to know that. 

Mr. BATTELLE: I have to pay for Twitter soon. 

Mr. WILSON: You don’t have to, that’s the whole point of this. That Twitter’s going to – 

Mr. BATTELLE: But I get the real Mr. Battelle, like the real shack 

Mr. WILSON: Exactly. 

Mr. BATTELLE: Does that put me into the suggested users box? That’s what I want to find out. 

Mr. WILSON: That may well be. That may well be part of, you know, I think, suggested users is a piece of this. And I think there are – one could imagine, if you think about what businesses and celebrities and brands need on Twitter and what they’re not getting today, there’s a whole set of premium services that are there. And you don’t have to have them if you don’t want to. But they’re there for you and they’re priced in a manner that makes them affordable and scaleable. So, that’s the first big initiative, that’s the thing that Ev has been talking about for most of this year and I fully expect that we’re going to have a bunch of those services in the market by the end of the year. So, that’s one. The second thing that I think is pretty obvious is there is something to do around search. Not every Twitter search is necessarily monetizable. When you search on your name or you search on your company or you search for that hash tag CM Summit or whatever, there may not be any real commercial activity there. But, if you're doing research on, I want to buy a digital camera and I want to know what digital camera do. So, I'm going to go search Twitter to see what the chatter is about this service, there's clearly monetizable intent there. And I think Twitter will do something to monetize that. So, that's a second area. And then the third is mobile. And I don't think that the things to do in mobile are the things that the people might be thinking about. We're not going to start charging people to send and receive messages over and over mobile. But, you know, you think about Twitter is the - I don't have this verified. But, I've heard it from a couple of sources. Twitter's short code here in the States is 40404 is the most used short code in North America more than any other short code. 

Mr. BATTELLE: Wow! 

Mr. WILSON: And Twitter also has – 

Mr. BATTELLE: Can someone tweet that please? 

Mr. WILSON: And like I said, they’re not verified but that’s what I’ve heard from a couple of people. The other thing that you’ve got to think about is that Twitter has a phone number for most of those 32 million people. And those people are actively engaging in mobile device to mobile device communication. So, there’s a bunch of things that one might want to be able to do mobile to mobile that we’re not doing today. I might want to be able to pay you some money, for example. Facebook has launched a payment system and I think that that’s a very smart move on their part. And I would hope that sometime in the next couple of years, Twitter could launch a payment system or maybe front end the payment system from somebody else. So, these are the kinds of things that I think are the highest value to the community and to Twitter and to the businesses they are conducting business on Twitter. And those are the kinds of monetization systems that make sense to me and I think to the Twitter team to go after. 

Mr. BATTELLE: You mentioned, I want to unpack one thing. You said something about brands on Twitter, sort of like celebrities having the ability to sort of build an official presence. 

Mr. WILSON: Right. 

Mr. BATTELLE: Not unlike what Facebook’s done with Pages, right? 

Mr. WILSON: Exactly. 

Mr. BATTELLE: And there’s a lot of things that Twitter is doing that, are like what Facebook is doing and the reverse. Facebook has actually redesigned around a sort of like Twitter like thesis. The two companies seem to be staring at each other quite directly. 

Mr. WILSON: I think learning from each other, that may be is another way to put it. 

Mr. BATTELLE: So, how did you feel when Evan said no to half a billion dollars from Facebook? 

Mr. WILSON: Ev wrote a great memo, which probably will never see the light of day, to the senior managers. 

Mr. BATTELLE: You could forward it to me if you like. 

Mr. WILSON: …to the senior management team and the board and he said, you know, there’s - I actually don’t remember if it was four or five, but about four. There are four reasons why a company should sell. The management team is tired and does not have it in them to take it to the next level. There is a life-changing financial event for the management team. There is some huge business problem that we can’t solve on our own. A good example of that would be YouTube and the whole sort of intellectual property issue. And, I forget what the fourth one was, but anyway, he articulated the reasons why a company ought to sell. And then he pointed out that we face none of those issues and that we could finance the company and that we have plenty of opportunity to create a sustainable business and that the service was growing. And this was all last fall and he was right about all of that. So, I think that in hindsight, he really provided great leadership around that decision and convinced everybody to say no and I think it was the right decision. 

Mr. BATTELLE: Do you think that there is a number and then I’ll stop? But do you think that there is a number or is it really that that decision is the same decision even if it gets too YouTubian or DoubleClickian kinds of numbers? 

Mr. WILSON: I honestly don’t know because no one has thrown a number out. So, you know I think… 

Mr. BATTELLE: You see, I just got information out. 

Mr. WILSON: So, you know, until you - I mean, what I've always learned is that the answer is no. You know, we're not selling and then, you know, at some point, someone comes along and, you know, Google could have sold but nobody ever really put a deal in front of Larry and Sergey that was a number that, you know, convinced them not to. 

Mr. BATTELLE: Right. 

Mr. WILSON: And so - and I think maybe the same thing is true at Facebook. I've heard from people at Google that there were conversations about buying YouTube and Facebook at the same time and they concluded that it didn't really make sense to do two billion plus acquisitions at the same time. There's too much operational risk around that. So, that suggests to me that Facebook could have been bought at some point. 

Mr. BATTELLE: Yeah. 

Mr. WILSON: So, I think the answer is that, you know, you can never say never. But, it's also true that all the points that have put in that memo last fall are true today. 

Mr. BATTELLE: Right. 

Mr. WILSON: And so I think there's a real bias in which everyone has been very clear about. I think that there's a real bias that we should try to make Twitter an independent company for the long hall. You know, Tim O'Reilly has this thing about the internet-operating system. And if you look at what the internet-operating system is, it's the internet and a bunch of functions that come with it. Your search function is Google and your purchase function is Amazon and your list-something-for-sale function is craigslist or eBay and you could go on and on and on. And I think Twitter has the opportunity to be the function, which is tell the world what you're thinking, right? If you have something that you just want to say now, you do that by posting it to Twitter and then the internet takes it from there. So, it's a short message input function. And because of the open API, there are already 11,000 services built on top of that. 

Mr. BATTELLE: Yeah. 

Mr. WILSON: And so we're headed to a million services built on top of that. So, Twitter is, I think, becoming a piece of internet-operating system and most of those companies I just mentioned are independent companies. 

Mr. BATTELLE: Right. 

Mr. WILSON: And it may be that in order to continue to be a piece of the internet-operating system, you need to be an independent company because if you sell delicious or you sell Flickr or you sell whatever else it may be, it get sucked into something that's not part of the internet-operating system and a new function gets built. 

Mr. BATTELLE: So, you were just talking about Yahoo there? 

Mr. WILSON: I didn't mean to be… 

Mr. BATTELLE: As not... 

Mr. WILSON: I didn't mean to be talking about Yahoo. 

Mr. BATTELLE: But it does when you sell it and becomes part of a greater whole. Somehow, it loses some part of its essence. 

Mr. WILSON: I think so. 

Mr. BATTELLE: Let's pull back for a second and talk about marketing, a room full of people who are invested in figuring out how to take a brand into the space, into the social media space. Specifically to Twitter now as opposed to what might be coming and more broadly, any lessons that you might have or how to be - how to practice the craft of marketing in this sort of mercurial environment.

Mr. WILSON: Well, I think you said it in your introductory remarks. It's - you've got to have the conversation. You got to be in the conversation. A good example of this - two or three weeks ago, I guess and I don't do very often on my blog. I did a bitch post and I bitched about American Express. And it was a great thing that… 

Mr. WILSON: Marcy, leading the audience… 

Mr. BATTELLE: One of our sponsors, thank you. 

Mr. WILSON: Came into - in the conversation and left a comment. 

Mr. BATTELLE: Yeah, right. 

Mr. WILSON: And it was a great thing. And the comment discussion took a new life after that happened. But, it wasn't as good as it could have been. And yesterday evening, I wrote a post about conferences and pointed out that I've never been to a TED conference and probably never will go to a TED conference. What's interesting about that is that several of the people behind TED were very quickly in that conversation and a bunch of people rallied around TED and if you go look at that comment thread, it's a very balanced conversation and in fact, it might even be a pro-TED conversation. That didn't happen with American Express. Now, I don't know that the two brands are that comparable because American Express is a big company, right? And everybody has had at least one experience with American Express that might not have been ideal. So, so you know, it's harder to imagine that, you know, hundreds of people would have come to the aid of American Express in that conversation. Whereas with TED, you know, it's a beloved brand among some group of people and those people were there. Whenever I write about Apple and I'm very critical of Apple, the Apple fanboys come out and they come out with a vengeance and you know, they can… 

Mr. BATTELLE: You know, this is actually a very interesting point because there is - I mean, my first job in this business 25 years ago was being a reporter covering Apple. 

Mr. WILSON: Right. 

Mr. BATTELLE: So, I know that fanboy, they're actually like fan old men now. 

Mr. WILSON: Right. 

Mr. BATTELLE: But, I know them very well and what I find extraordinary about it is that Apple is the only company that has that kind of an extremely, you know, evangelical base on the web that absolutely ignores it and does not feed it, right? They do not join the conversation. Apple is a very traditional company when it comes to this. It's almost like they're playing a little judo and saying we're not going to do what everyone else is doing. 

Mr. WILSON: Well, they can get away with it because they have - they're ninjas, right? And they know that their ninjas are going to fight their fight for them. 

Mr. BATTELLE: Right. 

Mr. WILSON: But, I think most brands don't have that and so I think they have to create social media ninjas of their own. 

Mr. BATTELLE: Apple ninjas. Good point. 

Mr. WILSON: I didn't make up that term, social media ninja. 

Mr. BATTELLE: No. 

Mr. WILSON: David Kidder and Max Kalehoff from Clickable were the ones who introduced it to me. And that they have inside their company a group of people that are called social media ninjas and they use it very effectively. 

Mr. BATTELLE: I want to ask you about a couple of the post you've made recently and it's more like your ideas. 

Mr. WILSON: Right. 

Mr. BATTELLE: One of your ideas is called "The Power of Passed Links." 

Mr. WILSON: Right. 

Mr. BATTELLE: You wrote a post about that in April. I think it was in April. 

Mr. WILSON: Right. 

Mr. BATTELLE: Can you enlighten us on - and sort of generally, the idea there and why you think it matters? 

Mr. WILSON: So, what I've been looking at is the refer logs for all of our portfolio companies and also wherever else I can get somebody to show me their refer logs and I've been building a database hopefully over time and looking at the amount of links that are coming from organic and paid search, just largely Google, to be honest. And a number of visits that are coming from what I consider to be social media, which is in my mind, Facebook, Twitter, blog and blog comments. And what's interesting to me is that Google is still doing great and the amount of traffic that most companies are getting from Google - for most people, it's somewhere between 40 and 60, 70 percent of the traffic. So, Google still owns the web. But that's only grown at about maybe five or 10 percent month over month, maybe even less for some companies. It's growing though. But, social media is growing at a very fast clip. Twitter and Facebook are growing at like 40 percent month over month, the number of incoming visits. And those visits are coming from what I called passed links - links that are passed from me to you. And of course, with the re-tweet function in Twitter in particular, that can get amplified very, very quickly. And so I think that, you know, email is another form of passed link. It's the original form of passed link, but emails can get passed around virally but most emails don't have that kind of amplification factor that social media does. Blogs and blog comments, I think, are a big piece of this but hard to see because they're not coming from a single domain and so that's a real problem and opportunity for somebody to go kind of grab a ball to blog domains and all the blog comment domains and call that blogs and give that data to people who use Google analytics and others to kind of see how much of that is coming from blogs. My guess is that blogs as a group is equally powerful and more powerful than Facebook and Twitter. But any case, you take those trend lines and you take them out another year. Social media together is going to be bigger than Google. 

Mr. BATTELLE: In other words, this thesis played out is trouble for Google because Google has gotten to its position by being the circulatory system of the web. 

Mr. WILSON: Right. 

Mr. BATTELLE: And now, a new circulatory system is developing, which is laid over it - it's dependent on it, certainly. It's integrated with it, but it is growing much faster than it. 

Mr. WILSON: Happens all the time. You know, when the U.S. government was trying to go after Microsoft, you know, for being a monopoly, what was happening was that, you know, the hackers were building Linux. And now, you know, as Google starts to look like a monopoly who owns the web, we're coming together to create a new form of media. It's more powerful than it, so I think this is inevitable. 

Mr. BATTELLE: So, I wrote a post in March or actually, I guess it was earlier than that - in December where I said Twitter equals YouTube because people were noticing that search referrals - there's sort of a new signal of search on the web and it was Twitter and that seems to really be growing the amount of search that's coming out of Twitter. 

Mr. WILSON: Yeah. I'm not convinced that the thing that Twitter does that's so disruptive is search. 

Mr. BATTELLE: Well, it's not so much that it's a search in the traditional form but rather, I think, every tweet might be seen as a query. 

Mr. WILSON: That I agree. I really think of it as this passed links phenomenon, right. So, I saw it this morning. I, you know, ComScore has some big news today which I think they're going to be talking about at some point. 

Mr. BATTELLE: And they’re announcing it here. 

Mr. WILSON: Right. 

Mr. BATTELLE: Stay tuned. 

Mr. WILSON: So, I wrote a blog post, you know, John knows it. I was on the board of ComScore. I was one of the founding investors there and was on the board for nine years and it's a company that is still near and dear to my heart although I’m not involved now anymore. They have some big news and I wrote a blog post about it and I twitted it and in the 20 minutes between when I posted and left to come up here, it had been re-twitted about 30 times. I don't know how big the audiences of those people who re-twitted it where, but if each of them had a thousand followers, you know, that's 20,000 people who are going to see it at length that did not see it on my initial… 

Mr. BATTELLE: Right. 

Mr. WILSON: I mean, there's obviously some overlap, but that to me is maybe a bigger deal than search. 

Mr. BATTELLE: Right. 

Mr. WILSON: Is that viral spreading of links. 

Mr. BATTELLE: So, you're using that viral spreading of links to focus that quick silver attention on something in the moment. 

Mr. WILSON: Right and it is relevant. 

Mr. BATTELLE: Right. But that is exactly what search does, except in the static form as opposed to real time form and that's the thing that I find so fascinating. 

Mr. WILSON: What's different though is search is very intent-driven. 

Mr. BATTELLE: Right. 

Mr. WILSON: I want to buy a digital camera. I go, I search, I buy. And the passed links thing is much more serendipitous. StumbleUpon, I think was a very interesting service we weren’t an investor in it, but it was very serendipitous when you stumbled upon something. And I think that Twitter and Facebook and social media more broadly, I think, is a more powerful way of that serendipity. I’d see you want, I think in life you want some things you subscribe to, you want some things that you go search for and then everything else you kind of want to come at you through some filtered set of trusted sources. And that’s… 

Mr. BATTELLE: Through what Mark calls the social graph. 

Mr. WILSON: Correct. But the social graph that the problem that Facebook has and they know it, is that there are a lot of people out there who are not friends, who are really powerful social recommenders and you're not just going to have them in your social graph in the original instantiation of the way Facebook was setup. 

Mr. BATTELLE: Yeah. 

Mr. WILSON: And so, I think, blogging to me is the proper model and I think that the people who started Twitter launched Twitter with the blogging model, which is I can follow you and you don't have to read me. And we don't have to be friends, but you can be influential and that is, I think, a more natural model, that relationship model to me. 

Mr. BATTELLE: That's one of the reasons that we have both LinkedIn and Aardvark here, as I think the second and third order social graph is very, very interesting as a recommendation filter, right? 

Mr. WILSON: Right. 

Mr. BATTELLE: But, I think, everyone who uses LinkedIn, one of the things about it that works is that it is not just who you are connected to professionally, it is who they might be connected to or who they, you know, third order as well. In Aardvark which is a service you'll see here, it works exactly the same way. 

Mr. WILSON: Right. 

Mr. BATTELLE: We're going to run out of time if I don’t let you guys get some questions. And so I think, we've got folks with microphones if anyone wants to ask Fred a question that I haven't asked. Please raise your hand and do. I want to make this as much a conversation as possible. Thank you for the house lights. While you do that, let me ask you about earning media, because that is another one of the ideas that I found really important that you’ve written about recently. 

Mr. WILSON: So earn media is the opposite of paid media. So instead of going out and buying media, figure out a way to earn the media, and there’s lots of ways you can do it. I mean, it all started with PR. I think the PR firms are the ones who created the term earn media. But I think that now with the whole social media eco system out there, there's a lot of ways you can earn media and many of the best things that have been done are things that you've been doing John with your partners to create presence in the blogs and presence in Facebook and presence in Twitter and other places. And, you know, my favorite story about that is the Korean Barbeque Taco trucks in Los Angeles. There are two trucks - Kogi BBQ. If you're ever in LA and you use Twitter, just follow Kogi BBQ and they drive all around, these two trucks drive around LA and they Twitter where they are. If you happen to be near where they are, you can go get one of the best Korean barbeque tacos you've ever had. And I think, you know, they've got 15 - the last time I checked, they've got about 15,000 followers and they've done it all through blogs, Flickr and Twitter and that's a great example of earning their media. They don't have to buy it. 

Mr. BATTELLE: Yeah, and their lines are ridiculous. They just show up and there's a flash crowd around their taco truck. 

Mr. WILSON: Right. 

Mr. BATTELLE: …which is pretty cool. They have a question over here. 

Unidentified man #1: Hey, how is it going? Love the matching outfits by the way. 

Mr. BATTELLE: He’s got checks and I got stripes. 

Unidentified man #1: Only because I'm wearing the same suit, I think. So Fred if you're the CEO or board member investor somehow magically in-charge of the New York Times, what’s the first three to five things you would do? 

Mr. WILSON: I would get rid of the paper. I would shut down the paper. I would stop… 

Mr. BATTELLE: Is it the Times, I'm sorry. 

Mr. WILSON: Yeah. I would stop covering stuff that is covered better elsewhere. I’d stop covering business, The Journal does it better. I would stop covering sports, The Post does it better, and I would focus on what they do uniquely well, their opinion, their national political news, their world political news. I mean when, you know, Obama nominated Sotomayor, is that how you say her last name, I don't know anyway, to the Supreme Court, the next day, The Times had three or four really great pieces about that. Nobody does that better than they are. Do that and do nothing else. 

Mr. BATTELLE: So the things you said to get rid over are the legacy revenue streams for the business, right? You know, business brings in business advertisers, the print edition used to be the fundamentally, you know, 80% of the revenue. 

Mr. WILSON: Right. 

Mr. BATTELLE: You’re basically talking about a plan not unlike GM for The New York Times where you just sort of take make two companies put the cool - the good stuff here and all the legacy stuff that's losing money and bleeding but used to be, you know, in another company like get sold off the parts. So that's what you suggesting is we should… 

Mr. WILSON: I think they can only do what's sustainable, right? And the one thing that's sustainable for them is the thing that they do uniquely better than anybody else and that's the only thing, I think, they do uniquely better than anybody else so that's what they should do. I mean I don't know else what they can do. 

Mr. BATTELLE: Over here. 

Unidentified man #2: Hey there, it's a great discussion. Something that I've seen in the last few months and I know there's data to explain it, but I'm curious on your take on it. It seems like MySpace has fallen out of the conversation, you're talking about social media, you’re talking about social network, about Facebook and all these other companies yet you never mentioned MySpace. 

Mr. WILSON: Well, MySpace does not have viral channels. MySpace isn't a viral service. If you look at the way that – if you look at people who build apps on top of Facebook and people who build apps on top of MySpace, MySpace it doesn't – it just, there's no way, it’s not built in to the nature of their service, it's stuff gets passed around. I think MySpace is largely an entertainment business. Largely around music and to a slightly lesser extent, video and I think that they have a place to exist in that world as a social entertainment service, but they don't seem to have the DNA to be a social media service, a broad horizontal social media platform, the way that Twitter and Facebook are. So that's my take on MySpace. 

Mr. BATTELLE: I spent sometime with Jon Miller and Owen Van Natta last week. Jon Miller is the new chief digital officer for Murdoch and Owen was the number two guy at Facebook who is now running MySpace. And they're hoping that maybe a year from now when we meet, you won't be saying that. But, they also agree that the focus of the company is really on entertainment and music for now. 

Mr. WILSON: The problem is, there are companies out there; AOL, Yahoo and MySpace are all very good examples of it, that don't have deep technology innovation in their DNA. And, you know, it seems to me that that is an absolute requirement if you want to be a platform and I think, that if you don't want to be a platform, then I don't know what you should be aspiring to be. I mean, I don't know that there is anything else that you would want to be. 

Mr. BATTELLE: One more question and then I think we are going to have to… Okay, I got it. 

Unidentified man #3: I'm curious about your outlook for the US economy and how your expectations for recovery impact your portfolio strategy. 

Mr. WILSON: I think the economy is going through a restructuring more than, I mean, this is a downturn of course, but I think the more profound thing that's going on is my partner Albert wrote this thing today about, you know, GM's going bankrupt and there's all this innovation going on in the technology space at the same time. And you just think about that for a second. What we're witnessing is sort of the – or The Times is another good example, we're witnessing sort of the dwindling of the industrial era and the rise of the information era. And so, I'm very bullish about our business and the kinds of companies we invest in and we're seeing it in our portfolio. And we have a dozen companies that have revenues of more than 10 million a year or more and all of them were flattish in the first quarter and all of them are doing much better now. It may just be stimulus money kind of sloshing around the economy, but I really believe that the kinds of companies that we were involved in and that many of you are involved in are going to be just fine. 

Unidentified man #3: To that point, you saw that GM and Citi exit the Dow Jones 30 and Cisco was added to that point. 

Mr. WILSON: Good example, perfect. 

Mr. BATTELLE: Well, we can't keep going for a much longer time but please join me in thanking Fred for coming here. 

Mr. WILSON: Thank you.