By Douglas MacMillan
On the website Quora, users ask and answer a wide range of questions, from the evolutionary purpose of crying to advice for avoiding jury duty.
But one question on the site remains a mystery: “How does Quora make money?”
For now, it doesn’t.
Quora co-founder and CEO Adam D’Angelo
Co-founder and Chief Executive Adam D’Angelo has emphasized building a question-and-answer site with millions of repeat visitors before trying to make money from them, a strategy that proved successful at D’Angelo’s last job – as one of the earliest executives of Facebook.
But even Facebook experimented with ads its first year in business, and began hiring salespeople in its second. At nearly five years old, Quora has yet to generate any revenue or even lay out a plan to make money. The company just raised an additional $80 million in funding from investors led by Tiger Global to fuel its continued expansion, and perhaps, its search for a business model.
“Our goal is permanence and independence and that means revenue,” Marc Bodnick, a former investor who joined Quora in 2011 to lead its business operation. “This may be the last time we need to raise money.”
And yet, Bodnick says there are no concrete plans to monetize the site. Advertising is a “likely” business model for the company, but Bodnick would not specify if there’s a timeline to begin testing ads.
The biggest opportunity for Quora could lie in search advertising, similar to the text-based ads that appear next to Google’s search engine results. About one-third of visitors to Quora are looking to find an answer a specific question, and that could be a good opportunity to show them an ad related to their question, Bodnick said.
Unlike some other Q&A sites, Quora requires users to register with their real names, or log in using their Google, Twitter or Facebook accounts. This gives some credibility to the answers, and in many cases those who answer are the people who are the best authorities on the topic. President Obama used the site last month to answer questions about Healthcare.gov.
But Quora hasn’t proven it can scale beyond the Silicon Valley echo chamber. The site’s questions are still more weighted toward topics of interest to its early Silicon Valley adopters, like entrepreneurship, venture capital and technology.
Quora declined to say how many monthly active users are on the site. A spokeswoman did say the site has about 500,000 topics, millions of Q&As and hundreds of millions of views per month. More than 40% of traffic comes from mobile, she said.
Based in Mountain View, Calif., Quora has 70 employees and plans to use part of the new capital to add more engineers and designers. The company plans to eventually translate its site to other languages, and improve its ability to spot and remove “spam,” or answers to questions that serve more as promotions, Bodnick said.
The company has now raised close to $150 million from investors including Matrix Partners, Benchmark and Peter Thiel, one of Facebook’s earliest backers. Its last round of funding, announced in March 2012, valued the company at about $400 million, TechCrunch reported at the time.
As Quora begins exploring a business model, it might turn to its own community of questions-and-answers for advice. In a discussion titled “What could Quora’s long-term business be?” commenters suggest the site could make money by matching employers with potential job candidates, license its software for large organizations to use internally or by charging users who want a question answered by a specific expert on a topic.