How To Monetize a Q&A Site: Answers.com CEO David Karandish (Part 2)

Sramana Mitra: A plan did not exist at that time?

David Karandish: Answers.com was not a parallel path. We acquired Answers.com in 2011. Around 2008-2009, we did a white boarding strategy session. We brought some of the key management team members in and asked them, “If we were going to build the ultimate Internet company, what would that look like?” We checked off a bunch of items. A great brand that consumers recognize and lots of high-quality content. The content would be unique, stuff you can’t find in other places. Ideally, that content would be increasingly from users and it would capture the voice of consumers.

If we’re going to build the ultimate Internet company, we’re going to end up with diverse revenue relationships, and ideally, some of those relationships are going to be recurring in nature. You’ll have some predictability and a good view into future cash flow.

Then, we said if we build this ultimate Internet company, it’s got to be something with a large total addressable market where we’re not constrained by category, sector, geography, or platform and is something that can be widely applicable.

That was the template that we wanted to go for. We looked at what we had and said how do we bridge the gap between the template for what we thought an Internet company should look like and what we had at that time, which was a couple of mom and pop websites in these various verticals?

We said we can’t try to solve all of these at once. One piece of advice I’d give to entrepreneurs is, sometimes when you’re faced with 10 big problems, trying to solve all at the same time is really difficult. We picked one, and the one we started with was the content. We said there’s got to be some type of content that applies to all the categories we want to be in, that adds a lot of value to the consumer and a lot of value to the advertiser.

One of our developers built a question and answer platform.  We started applying that out to our vertical sites and the next thing you know, we got a few thousand questions and answers coming into our little tiny vertical sites.  That was the moment when we said we were going to go all-in on the question and answer concept.

We saw what it would look like for us to continue growing organically.  Even though we’d built some great technology and we had parts of that puzzle figured out, we said there’s got to be a company out there that has a great brand, a nice registered user base, more diversified revenue than what we had at the time, as well as a lot of user-generated and unique content.

In 2010, we kicked off a process to acquire Answers.com.  Answers.com had been through its own journey.  It was originally a plugin for Internet Explorer where you could right-click on a word and see its definition. On top of that, you could go see reference information about it, including various encyclopedias, various thesauruses, and all sorts of reference material.

The founder of the company Bob Rosenschein had a great idea. His idea was to take that content, and rather than leaving it in this Internet Explorer plugin, turn that into a web page, which was Answers.com. It was primarily focused on providing this reference-answer rollup. This was in the early to mid2000s.

Pretty soon thereafter, there was a little company that was partnering with the Wikipedia platform to do questions and answers in a wiki format. Answers.com at that time acquired that company, which was doing these wiki-based questions and answers, and that became integrated into the site along with the reference content. The cool thing about this wiki platform is that, similar to Wikipedia, anyone could ask a question, answer a question; or edit that answer. So what Bob and his team found was that those questions and answers would improve over time as more and more people joined the community and shared their knowledge and really built the product out.

Fast-forward to 2011: Answers.com at that time was a public company. We came in through our holding company. We raised some debt financing to go acquire Answers.com, take it private, and then apply all of our technology to it. That was the journey of how we went from our mom and pop websites to owning one of the largest websites on the Internet.

This segment is part 2 in the series : How To Monetize a Q&A Site: Answers.com CEO David Karandish
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