I’ve been thinking about web traffic lately. And yes, I know that the traffic graphs of MySpace and TheFaceBook have been circled around the blogosphere a million times, but I am going to repeat them anyway:

Two years of data. Let’s compare them with two other more recent startups which are looking “successful” (from a traffic standpoint, that is) but are not social networking sites. Here are the graphs from vertical search sites Kayak and Indeed one year after they’ve launched:

My impressions when I compare the two sets:
1. All four of these graphs are “pretty,” but clearly the first two are prettier (linear vs. geometric growth).
2. The social networking sites don’t exhibit break-out traffic behavior early in their existence.
3. There is clearly display a magical inflection point when the network effect of all the users in a social networking site causes a dramatic shift towards geometric growth.

Obviously there are many examples of both vertical search sites and social networking sites where the traffic launches flat/limited and continues along those lines.

My gut conclusions (based on limited set of data with selection-bias, etc., etc.) from all of this:
1. The success of a social networking site is difficult to discern from its early traffic pattern. It isn’t until later in its life if the traffic usage will really ramp after the network effect has kicked in.
2. Vertical search sites which will be successful display early traffic patterns signaling this future growth.
3. From an investor point of view, be patient with social networking sites in the beginning, but cautious with vertical search ones which haven’t demonstrated immediate traction.