"Collectively, We're All a Lot Smarter"

Portfolio.com: What kinds of entrepreneurs are you looking for?

Wilson: There are two kinds of teams we end up financing. There are experienced teams, often that we've worked with in the past, and we love to back those teams, and we'll do it as often as we can.

Oftentimes, it's a first-time entrepreneur, but in that case, it's typically somebody who has already built something, and it is starting to shake things up. And we're investing because we've already seen that the first-time entrepreneur has actually been able to get into the market and make something happen without us. And then we can come in and help build a team around them and help them build the business.

Portfolio.com: Do you think Facebook is going to try to I.P.O. this year?

Wilson: I don't think they're going to try to I.P.O. this year, but I do think they will to try to I.P.O. [at some point.] But I think they're smart enough and patient enough to realize that they need to build that engine of predictability around revenues and growth and really get the fundamentals of the business rock solid, because the last thing that anybody wants to do, particularly such a high-flying company, is to go public and blow a quarter early on, and then they become damaged goods, so I don't think they'll do that. I think they'll wait.

Portfolio.com: Do you think that Facebook C.E.O. Mark Zuckerberg has what it takes to take a potentially $15 billion company public? Or do you think Facebook should follow in Google's footsteps and bring in an experienced technology C.E.O. like Eric Schmidt before they go public?

Wilson: I think [Zuckerberg] can do it, but he's going to need some help. Bill Gates found [early Microsoft President and C.O.O.] Jon Shirley. Larry Ellison had a number of people over the years that have helped him run his company. It doesn't mean that Zuckerberg has to give up control of the company. Larry and Sergey have never given up control of Google. Everyone knows that. They just delegated certain responsibilities to Eric, and they've given Eric the ability to weigh in on every issue that matters to the company, and they've created a structure that works. I'm sure there are some frustrations at times, but it works, and it's made all of them fabulously wealthy. So I think absolutely Mark needs to do that. And I think if he's willing to listen to the people around him, including his board, his confidants, and his management team, he will do that.

Portfolio.com: What happens to Yahoo over the next 6 to 12 months?

Wilson: Well, it could very well be sold. Microsoft just had a great quarter and Microsoft has the exact same problem that Yahoo has. Together they could be 30 percent of the search market to Google's 70 percent. Divided, they're each somewhat marginalized, so certainly at a minimum, combining their search businesses makes an enormous amount of sense.

Or Yahoo could outsource its search business to Google, which would be throwing in the towel. I don't think they want to do that, but from a financial perspective, they could make a lot more money doing that. So they have to rationalize what they're doing in search, because it's unsustainable.

The other they have to do-and I think they're doing it-is they have to decide where they're going to fight and where they're not going to fight. They've gotten a little bit defocused in trying to do too much. They should pick four or five areas that they are going to be dominant in. They're dominant in email, so they have to continue to be dominant in email. They've got a very strong franchise in online photography, so maybe they should be dominant there. They've got some interesting things going on in online music, so maybe they should make a big play in online music. Places where they have great executives, great vision and great franchises already, they should invest in those. And the places where they don't, like social networking and search, maybe they should cede. They were trying to be everything to everybody, and that probably isn't sustainable anymore.

Portfolio.com: Do you agree with Yahoo C.E.O. Jerry Yang's recent push to make the site "the premier starting point on the Web"?

Wilson: Most adults I know start their Internet session at Google, and most kids I know start their Internet session at either Facebook or MySpace. So it just doesn't seem to me that it's a viable strategy.

Portfolio.com: How will Twitter make money?

Wilson: The centerpiece of Twitter is the Twitter timeline. It's you and all your friends and the updates you've made most recently. It looks very similar to the Facebook minifeed, and to me, the Facebook minifeed is the second most interesting attention aggregation point on the Internet, the first being the search engine result page. So if you own a powerful attention aggregation point on the Web, I think you can monetize that. Facebook has already started to do that by putting sponsored messages into the minifeed, and I think over time you'll see them do more and more with the minifeed as a place for monetization to happen. And I think if they're successful in that, a lot of people, Twitter included, will probably watch those moves closely and emulate them.

Portfolio.com: So you think Twitter might put sponsored messages in the Twitter-feed?

Wilson: Maybe not. But maybe that's not the most powerful idea. Maybe the most powerful idea would be if iTunes had a button that says, "I'm listening to this song right now," and when you click that, it goes into your Facebook minifeed and your Twitter minifeed. And maybe iTunes or the person who's trying to market the music in iTunes pays for the right to do that, because maybe when you do that someone clicks through and goes and buys the song, or listens to the song.

Portfolio.com: But wasn't that what got Facebook into trouble with Beacon, the company's social advertising system that broadcast users' purchases to their friends?

Wilson: I think there's nothing wrong with Beacon, other than the fact that it was launched as opt-out, instead of opt-in. So I think that users will absolutely want to broadcast certain things to their friends, and there are some things they're not going to want to broadcast to their friends. And they need to be able to control that at a very granular level. When they decide they want to broadcast that they think the new iPhone is the greatest phone ever, that's possibly a way for commerce to happen.

Portfolio.com: Do you agree with Yahoo C.E.O. Jerry Yang's recent push to make the site "the premier starting point on the Web"?

Wilson: Most adults I know start their Internet session at Google, and most kids I know start their Internet session at either Facebook or MySpace. So it just doesn't seem to me that it's a viable strategy.

Portfolio.com: How will Twitter make money?

Wilson: The centerpiece of Twitter is the Twitter timeline. It's you and all your friends and the updates you've made most recently. It looks very similar to the Facebook minifeed, and to me, the Facebook minifeed is the second most interesting attention aggregation point on the Internet, the first being the search engine result page. So if you own a powerful attention aggregation point on the Web, I think you can monetize that. Facebook has already started to do that by putting sponsored messages into the minifeed, and I think over time you'll see them do more and more with the minifeed as a place for monetization to happen. And I think if they're successful in that, a lot of people, Twitter included, will probably watch those moves closely and emulate them.

Portfolio.com: So you think Twitter might put sponsored messages in the Twitter-feed?

Wilson: Maybe not. But maybe that's not the most powerful idea. Maybe the most powerful idea would be if iTunes had a button that says, "I'm listening to this song right now," and when you click that, it goes into your Facebook minifeed and your Twitter minifeed. And maybe iTunes or the person who's trying to market the music in iTunes pays for the right to do that, because maybe when you do that someone clicks through and goes and buys the song, or listens to the song.

Portfolio.com: But wasn't that what got Facebook into trouble with Beacon, the company's social advertising system that broadcast users' purchases to their friends?

Wilson: I think there's nothing wrong with Beacon, other than the fact that it was launched as opt-out, instead of opt-in. So I think that users will absolutely want to broadcast certain things to their friends, and there are some things they're not going to want to broadcast to their friends. And they need to be able to control that at a very granular level. When they decide they want to broadcast that they think the new iPhone is the greatest phone ever, that's possibly a way for commerce to happen.