Meet hot darling of Web 2.0: StackExchange

Here is the site. The idea is simple: it’s a questions-answers service creator, much like Ning is a social network creator.

The questions-answers sites have been around forever. Even Yahoo! has one. However, the platform for these sites seems to be a new thing. Is it a good idea? While there are many unsuccessful social network, the biggest social network platform – Ning seems to be a success. Is it a success?

They have had over $119M in funding. Are they profitable? No. Do they have any revenue? Yes! How much? Likely to be $1M. Crap! A company burning through a hundred of millions and having annual revenue of a couple millions at most. That’s a typical Web 2.0 success indeed.

So it looks like StackExchange will be rapidly followed by competitors, and eventually even an open-source free version of it. It doesn’t look that StackExchange will be a huge success, but it well may be profitable. The key to StackExchange profitability would be very simple. The guys developed a nice platform, and they put it out there. If they stop all development and their maintenance and support costs are minimal, they will be out of red soon. There will be competitors, but the “first mover advantage” will let StackExchange to enjoy their nice monthly fees for a long time. If they continue to improve the product, sinking more dollars, it will be another money black hole.

 

 

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One Response to Meet hot darling of Web 2.0: StackExchange

  1. […] gives up a hope of making money, goes to VCs instead A while ago I was writing about StackExchange, which is a platform to create simple web 2.0 questions-answers community sites. StackOverflow was […]

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