The service allows content to be generated completely by users. The Holy Grail of Web 2.0, User Generated Content (UGC), this type of service allows users to both post questions and answer others' questions in a wide variety of domains. Growth has been impressive. According to the company, for the first nine months of this year, WikiAnswers' unique monthly visitor count in the U.S. has grown 317%, to more than four million. This ranks WikiAnswers as the second-fastest growing domain of the top 1,500. Not too shabby.
Google (NASDAQ: GOOG) pulled a competing service last year after boring results. Yahoo! (NASDAQ: YHOO), on the other hand, with Yahoo! Answers, has proven the model that users enjoy using this type of service. Yahoo has seen tremendous growth and according to TechCrunch, "one of Yahoo's most successful product launches in recent years has been Yahoo! Answers, which is showing more than 50% year-over-year growth in pageviews, according to comScore. Yahoo! keeps pushing the crowd-sourcing property, which lets 95 million registered members around the world answer each others' questions."
This is a great service: Both in terms of driving traffic and just flat out providing useful information written by people with knowledge to share. It should also drive search queries at Answers.com, feeding Answers' revenue model. I've been critical of Answers.com in the past: It overly relies upon a quasi-agreement for traffic from Google, are engaged in buying Dictionary.com for an obscene amount of money, and are hampered by lack of execution on the ad sales front.
That said, it is putting together some interesting properties and showing some decent growth from the usage/traffic side. I wish Answers.com could answer for me what the right valuation on this puppy should be.
For now, I'm on the sidelines.
Author holds a position in GOOG but in no other stocks mentioned above as of 11/1/07.
Zack Miller is the lead equity analyst for America Israel Investment Associates, LLC., the managing editor of IsraelNewsletter.com and a former equity analyst for a leading multinational hedge fund.
That said, it is putting together some interesting properties and showing some decent growth from the usage/traffic side. I wish Answers.com could answer for me what the right valuation on this puppy should be.
For now, I'm on the sidelines.
Author holds a position in GOOG but in no other stocks mentioned above as of 11/1/07.
Zack Miller is the lead equity analyst for America Israel Investment Associates, LLC., the managing editor of IsraelNewsletter.com and a former equity analyst for a leading multinational hedge fund.
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