espite being coastally challenged (currently living in Philadelphia), Josh has been an active entrepreneur and investor in the Internet industry since its commercialization. In 1992, while he was a student at the Wharton School of the University of Pennsylvania, Josh co-founded Infonautics Corporation – an Internet information company. In 1996, Infonautics went public on the NASDAQ stock exchange.
Microsoft/Yahoo - let the exodus begin
Updated - See new post for more info.
Back in November, Facebook launched their new SocialAds platform. Like many other folks, I decided to spend $50 to check out the platform. Like Fred, I decided to advertise for my fund - First Round Capital. Unlike Fred, however, I decided to test Facebook's targeting mechanism by running targeted ads to employees of large Internet companies -- including Yahoo and Microsoft.
One of the nice parts about Facebook's platform is their realtime statistics. Back in November, I saw that my Yahoo ad received 21,291 impressions with only 64 clicks -- a clickthrough rate of 0.30%. And my Microsoft ad received no clicks with 1,058 impressions. So when Microsoft announced they wanted to acquire Yahoo, it got me (and everyone else) wondering. Specifically, I wondered if YHOO/MSFT employees were indeed more likely to "look around" for new jobs -- and if so, how much more. Since I had baseline data from just 90 days ago, I decided to run the ads again.
On the Yahoo side, there was a 260% increase in clickthrough rate -- from 0.3% to 0.86%. That is not surprising. But on the Microsoft side, I was really surprised. When I ran around 1,000 impressions before, the ad did not receive one click -- now the same advertisement received 15 clicks. Microsoft's clickthrough rate increased from 0% to 1.19%. Maybe it's not just Microsoft's shareholders who are unhappy.
I acknowledge that this data is probably not statistically significant -- however, it probably is a good leading indicator of the exodus that will occur. And, while there has been a lot of discussion of whether a Microsoft/Yahoo combination would help or hurt Silicon Valley, the impact of this coming exodus has been largely ignored.
As talent leaves the big Internet/technology companies, there will be a flood of experienced folks looking to join (or start) startup companies. And that's a flood I look forward to.
on a side note, i'm betting google would kill for your $10 eCPMs on MySpace...
Posted by: eXay | February 06, 2008 at 08:56 AM
very cool data.
great post.
Posted by: bijan sabet | February 06, 2008 at 09:46 AM
You should try AOL and Google campaigns just to have comparison data.
Posted by: Jeff Clavier | February 06, 2008 at 10:19 AM
Dear Sir,
shouldn't you be doing something else?
just kidding, this is pretty good data... and not surprising.
Ash
Posted by: ashkan karbasfrooshan | February 06, 2008 at 10:41 AM
i reblogged this.
very clever Josh.
and very hopeful too for our companies.
fred
Posted by: fred wilson | February 06, 2008 at 02:03 PM
Josh,
If any good ones come your way, remember your friendly portfolio companies! We are in need of a good Director of Technical Ops...
Cheers,
Chris
Posted by: Chris Saxman | February 06, 2008 at 02:15 PM
Great Idea, interesting results.
I'm curious to see which company has the next big developer draw. That is after Facebook, Salesforce, VMW, and linkedin. (I don't see Linkedin or sales force really leveraging the opportunity as well as they could be.)
I think Powerset knows that scheme and if that takes off it could be a nice place to land but I don't see to many other companies with the momentum.
Posted by: Joe Conyers | February 06, 2008 at 02:23 PM
It could also be that a blog written by a Microsoft employee mentioned your ad and caused perhaps a few Microsoft employees to click on it.
http://www.25hoursaday.com/weblog/2008/02/05/TargetedAdsOnFacebook.aspx
Posted by: Jud Spencer | February 06, 2008 at 05:24 PM
That's why First Round Capital kicks butt. Outside the box thinking!
Curious, what was the landing page? A pix of Ballmer screaming?
Posted by: GL | February 06, 2008 at 06:45 PM
I bet these are Microsoft and Yahoo! robots clicking.
Posted by: Alex Iskold | February 06, 2008 at 07:53 PM
MS employees are MS shareholders.
Posted by: Roy | February 06, 2008 at 08:00 PM
Ummm ... why would someone want to hire someone from Microsoft to work at a startup? Are there any good examples at all of successful startups coming out of former MSFT employees?
Posted by: Redmond | February 06, 2008 at 08:32 PM
Redmond, surely you can think of some. Here's the first one that came to mind: iLike.com
Posted by: Peter Kafka | February 06, 2008 at 09:41 PM
February 2008. The label on your table is wrong. Too bad you made a graphic!
Posted by: sam | February 06, 2008 at 10:37 PM
There are hundreds of start-ups with MS founding teams. Have you worked in hi-tech for ten minutes?
Posted by: Roy | February 07, 2008 at 02:49 AM
Ye-es, but bear in mind that your '260% increase' is still only half a percentage point.
Indicative, yes. Definitive, no.
Posted by: NickD | February 07, 2008 at 05:50 AM
Well, if anyone wants to join a hot start-up, Openads is just what you need. We have offices in London, New York and Poland- Poznan.
Posted by: Sarah McQuade | February 07, 2008 at 10:25 AM
I happened to take a screenshot of one of your ads in November. As you can see, it was targeted rather well.
http://flickr.com/photos/brevity/1995413091/
Posted by: Neil K | February 07, 2008 at 11:45 AM
Its interesting reading what the VC community discuss about the online communities. I think this recent move from FB shows that the original developers are still involved.
Posted by: chanel | July 22, 2010 at 05:40 AM
As you can see, it was targeted rather well.
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I happened to take a screenshot of one of your ads in November. As you can see, it was targeted rather well.
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