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I find Stack Exchange very useful in the exchange of ideas.

I do hope that this fantastic service would continue perpetually.

Does Stack Exchange have a sustainable business model?

How is Stack Exchange funded?

2 Answers 2

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They have VC money. The business model is ads and the Stack Overflow Careers site.

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I do hope that this fantastic service would continue perpetually.

Yeah, that would be nice.

Does Stack Exchange have a sustainable business model?

Not that I can tell. VC money is not sustainable because the investors expect to get some kind of return on their investment, so unless you are making a profit, you won't continue to get VC money. SE is hiring a lot of employees lately -- a lot -- and thus increasing their spending, which means they burn through their VC faster. I have no idea how much revenue careers and advertisements brings them, but intuitively it can't be that much. Meanwhile, their operating costs continue to increase as they hire, add more servers, etc.

Also, SE is the new kid on the block, competing with the likes of Monster, Glassdoor, and to some extent, LinkedIn, in the effort to bring up a community of people looking for jobs and companies looking to hire. They're fighting a lot of inertia to use those more established sites. HR drones aren't known for being early adopters. I'd be astonished if your typical Corporate America HR were even aware of careers.SO.

How is Stack Exchange funded?

Daniel answers that satisfactorily. That accounts for their funding today, but if/when the VC dries up, they'll need to rely on ad revenue and companies paying to post job ads. It seems like a rough business to be in: if the economy goes down the toilet, like it's presently very likely to do if the US Congress doesn't vote to raise the debt ceiling, the number of available jobs will dry up, and so will the job postings on sites like careers.

Personally I'd be willing to pay to use SE's question and answer sites, but I know that the SE community sites also serve a lot of users who would be completely unwilling to pay, so it's kind of hard to say how this thing will continue to be funded unless SE horizontally expands to something more profitable, like writing proprietary software, or selling cars or groceries. Maybe I'm underestimating the amount of money that companies will pay to post a job ad, but I don't feel that the income from careers is going to counterbalance their expenditures on the Q&A sites and careers itself.

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  • I can't find a source at the moment, but they've said that basic operations are self-sustaining based on ads, at least at the moment.
    – nhinkle
    Commented Oct 1, 2013 at 16:03
  • Ads, and we now have several products in Careers 2.0. We can't really discuss revenue, but you don't need to worry about the model ;)
    – Tim Post
    Commented Oct 3, 2013 at 12:48
  • Look at how subtly craigslist gets their ad revenue, and you can see that it doesn't take filling 1/3 of the page with ads, to keep afloat (not to mention make a tidy profit.)
    – Debra
    Commented Oct 13, 2013 at 3:09

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