Last couple of days from many different sources we have been hearing about this little company called Scribd. A funding frenzy is taking place around the company, with some of the top name venture capitalists jostling to invest in the company. There has been talk of an acquisition offer as well.
What we have heard from multiple and reliable sources that the company was offered $5 million on a post money valuation of $10 million, but passed on that offer. Someone offered to buy them but for now our sources say that Redpoint Ventures has invested a substantial amount of money at twice the valuation of the initial offer.
We asked Chris Moore, a partner at Redpoint Ventures, about all the hoopla, and he offered a “no comment.”
Scribd had previously raised about $300,000 in seed funding, on top of $12,000 it received from Y Combinator. What is Scribd anyway? As per their FAQ:
Scribd lets you publish and discover documents online. It is like a big online library where anyone can upload. We make use of a custom Flash document viewer that lets you display documents right in your Web browser.
Part of the idea behind Scribd is that everyone has a lot of documents sitting around on their computers that only they can read. With Scribd we hope to unlock this information by putting it on the web.
The technology behind the company is pretty impressive, and the traffic growth according to Compete.com and Quantcast has been pretty impressive. though one has to wonder if it merits such high valuation. A sign of the times?
Hi Om!
Apparently it is considered the YouTube of documents. Now you see the reason for frenzy?
All it takes is the right mental association.
To twist an already coined phrase – “It’s not what you do, it’s what it looks like”.
But to be fair, they must be seeing a lot of page hits.
P.S. I am doing some blogging on the IT scene in Pune India, while I visit. I had some interesting experiences trying to get broadband connectivity for my visit.
YouSendIt.com raised $10 mln a few days ago. Comparing to Scribd, Yousendit.com is no-brainer. Probably huge traffic of file sharing and file delivery sites lures investors.
How is it again that you make money from this?
This is going to be another successful site.
Should to see some copycat sites pretty soon.
So why would I want to upload my documents to this site again? Just curious.
Met the Scribd team a couple weeks back. They are extremely talented and down to earth. And interested in building something huge – instead of trying to flip for a quick buck. Think Redpoint invested in the team as much as the product.
Seems scribd.com is growing not because of viral or other defendable source of traffic. But rather its growing mainly thro SEO.
IMO, This is nothing more than any other user generated article site like squidoo.com
I took a quick look at the traffic graphs for Scribd and compared with a few other “start up” sites…according to Compete & Quantcast, Scribd might get about 100-200K uniques / month, and less than 500K pageviews.
Our site – FunAdvice – no funding, part time employees, etc, gets more than 350K uniques & a million monthly pageviews. The charts on both Compete & Quantcast show that it’s far ahead of Scribd…and yes, we’re in a totally different space.
But why is such a small site merriting such attention? I have yet to figure out why I need a “youtube for documents” personally.
One thing Scribd is doing is hitting the front page of Digg with incredible frequency. They are posting really timely, funny, crowd-pleasing PDF content (who knew such a thing existed??) and they are getting piles and piles of Digg. We at SplashCast are using a similar strategy – using content delivered through our service to participate appropriately in social media conversations – but while we’re very proud of our 14 Digg front page appearances in the last 4 months, Scribd is the leading example of this tactic. They hit page one 9 times in one month and had more total diggs in that time period than all but 9 other domains on the web. (for stats see http://elfurl.com/qvabu )
Heck, we even provide similar functionality for PDFs, but online humor isn’t my strong point and the people at Scribd are leveraging the heck out of it for big traffic and visibility. I’m sure this is only one of many factors, but the strategy does work – even for user acquisition. We’ve doubled month over month since launching and I’ll bet Scribd is seeing really awesome growth in new users. It’s awesome that some of that visibility is translating into potential financial support. It reminds me of the boost Hitwise can’t help but have gotten from blogging (see http://elfurl.com/c486t ) To some degree, these are stories illustrating a new paradigm: vendors who participate in conversations can really benefit from it.
Again, why are they getting funding?
Based on the various analysis services their reach is anemic. Getting dugged or slashdotted (or written up on Om of TecCrunch) leads to short-term traffic spikes.
I hope they are successfull because its a good idea what they’re doing. But more and more it seems that funding is predicated on who you know, not how succesfull your site is.
Another Y-Bomb? God bless Paul Graham and Y-Combinator for getting so much press from Om, Arrington, and the rest of the Web 2.0 crowd.
Scribd seems like a worthless business. They are hitting Digg? Great! Compelling PDF content? That’s dumb. A real service would take your PDF and put it online.
Take this example of why PDFs are not the future. If you go to a restaurant and click “Menu”, 9 times out of 10, it takes you to a PDF of the physical menu. Most people find this slow and annoying. The smart restaurants (or the ones who hire smart web designers), create actual web pages for this content.
Going to PDF is taking a step backwards and why would I want to share my documents? I have some papers from undergrad, some from my masters, etc. I don’t want to share those. Copyright violations are going to be everywhere in this service.
Way to waste your money Redpoint.
Perhaps the fact that you can upload a DRM-ed PDF file and have the service convert it to a variety of formats is driving visitors? I know being able to print out a file set to not be able to be printed is a draw.
That will probably be fixed ASAP though.
Scribd should be getting sued any day now by Tim Berners-Lee for intellectual copyright infringement on his idea he had in 1990:
Sharing documents on the internet. shocker
Hmm…maybe it’s getting a lot of traffic because you can find all sorts of copyrighted content like sheet music (all the Beatles music), full books (all the Harry Potter novels including what claims to be the first 200 some pages of Book 7), and even graphic novels and comics. YouTube of documents indeed!
They’re another example of a site that is taking off because they’re essentially breaking copyright laws. In their case however, their going overboard. There are already thousands of copyrighted books that are not only fully available on scribd, but they are coming up in the top results for Google listings as well. I smell litigation…
interesting discussion thread. if scribd can be the youtube of docs (copyright infrigements and all), the challenge will be for scribd to get to be a dominant site with tons of uniques and pageviews like youtube before the copyright holders clamp down and try and shut them down. youtube’s growth was so hockey-stickish, that by the time content providers decided that might not be so cool, they realized that it might be better to try and revenue share/collaborate w/ youtube versus fight them (with the exception of viacom). the media companies have not done a good job on using the web to distribute/monetize their content, so when a youtube, itunes, scribd? comes along, there is an opportunity to get their piece of the action from the community that these up-and-coming web companies provide.
As many here have pointed out, who needs to post their documents on a web site? I think in the closed circles of silicon valley they can create new needs that don’t exist yet. nobody really needs to watch videos on you tube but it’s there so I might as well used it. Same for this new service. I don’t need it but it’s there so I might as well use it. Or maybe does exist a necessity that Scribd satisfies but couldn’t it be more simply fulfilled by a normal, un-hyped, non-revenue generating web site. The point is that if you are a VC in the bay area your main interest is to find ideas for something that you can hype, make people believe they need it, grow it and then either sell it or use it to advertise. How about a web site where I can post my mood every day. 10M people end up posting their mood and all of a sudden you find your self with this new need of checking what’s the average mood in the new york area. So everyday, while you’re eating lunch at your desk you check it. Now http://www.worldmoodmap.com is the hottest thing, ppl with too much time in their hands blog about it, comment about the mood in Philly, the VCs who invested in it either sell it out or start advertising,… and here we have another great success. The point is not whether the website is useful or not. The point is to grab people attention and sell something to them. Our whole society is based on making “you” buying something. Grab people attantion and you can sell them stuff and get paid by the advertisers.
One more thing I always wanted to say: if you had a great company, you go public, you get 8bn $ from the public. Now your company is rich but you’re still not as the company really belongs to the shareholders; how would you take money out of it? how about creating some hype around a new thing, let’s say, I don’t know, something trivial, a website for people to post videos… inflate the whole thing enourmously… and then buy it (your new video website) for 1.5Bn. Nobody knows you actually own this new hyped company,… and voila’! you used the shareholders’ money to pay for something (worthless) you personally owned. Shareholders get the crap, you now got the cash.
YouTube better start making money soon for the shareholders sake. Welcome to Bubble 2.0
It is indeed true that Scribd can strip DRM from PDF files, but I doubt that ability is driving visitors to the service (esp. as it is a rather unknown feature/bug). Talking about popularity – is Scribd really doing so well? 1600 views for today’s most popular document (featured on the frontpage) – that’s not mind-boggling…
Breaking copyright law, sounds like they are YouTube of documents, let’s hope they don’t get the 1 Billion dollar lawsuit like Youtube.
http://www.openfloodgate.com is even better than Scribd — higher quality material. It’s newer and therefore has less buzz so far (though it’s gaining) — started by Tina Seelig at Stanford. It has privacy controls, so you can set up private viewing areas for docs you only want to share with a certain group or certain people.
Hype and more hype. Om – start featuring some real businesses please. Just because Paul Graham managed to convince someone at a VC firm to waste some part of their latest $300 MM fund means nothing.
Not only do they host copyright material, they make sure to remember your IP with the “traffic analytics”. What a great way to get sued!
Thank you, Scribd, for keeping everyone responsible.
scribd has some compelling content and they pioneered the ways documents can be shared…if you want to see a site that has monetized a site for documents check out http://www.gazhoo.com. Marketplace for documents.
Scribd is really HOT, I was searching for a website for uploading my M.Tech Thesis work, so that other can read it. and then I found scribd and i uploaded my thesis there.
I’ve been using Scribd for a number of reasons. It’s superior to google docs’ PDF management. I can upload documents over 500 KB, search those documents and have them converted to other formats without worrying about using my own system’s resources to do it.
What I find best is the integrated reader feature. Granted, Mac and Windows both have readers, but I’ve run into problems with them when I have to switch windows. With Scribd’s reader I can continue listening to a document while working in another window or moving away from my desk. It has also proven useful when assisting those with other accessibility needs.
And forget the copyright issues. I can’t think of many who are going to read the latest harry potter in front of their computer. What’s thrilling me is the publication of older works, government documents and some great school papers. Had Scribd been around when the Bush Admin was pushing the EPA to destroy documents, we wouldn’t be sitting around today wondering what it is we lost – because everything shredded would be online for the world to see.
Google has been trying to do this for a while. This isn’t a fad, it’s where information sharing and document management is headed. Similar but less elegant strategies are making pay for use services a lot of money. Anyone who can’t see the value here isn’t paying attention.
i m in love with scribd one of the best thinks is that i dont have to sign up for the service to use it just 2 clicks and my stuff is up there that is searchable and google can bring up my docs that really amaze me but one problem that i have found with scribd is that my excel docs are not posted and been 3 days but they i think they are still qeued in there system 🙁
What are the possible revenue models for a company like this? I like the company but unsure how them make money down the line. with all the smart (and not so smart) people here we could come up with an answer(s).
Scibd is the best tool I have seen to upload documents, specially given that it has so low download time.
I don’t really understand why people can’t notice how great Scribd is compared to the other sites listed above. Two weeks ago I found Scribd because my local bookstore didn’t have a book I had to read for a class…guess what? Scribd had the book! So I decided to look for other sites like Sribd, and so far into my quest, I haven’t found a site that comes remotely close to what Scribd has to offer. For some reason many people keep referring to Docstoc as a pretty good site for similar items, for the past 15 minutes I’ve been checking for various documents that I was able to access through Scribd, and they had none.
Docstoc seems to forget that many people also read books/novels for leisure, and that the market for people like me who can’t seem to get enough of reading novels, is quite large (Borders and Barnes and Nobles aren’t doing bad). Once they are able to start providing more and have less little to no limits, then I might find the site remotely interesting.
you should look at 4shared.com in my opinion its as good as scribd
COME ON! – You guys with experience of this kind of business!
I would love to hear what you think about Scridb’s revenue model?
Surely they can’t be keeping investors happy through advertising revenue alone!
I’m currently planning a similar (not the same as) web only business that will generate real cash, not just hits.
So does any know the answer?
“Scribd lets you publish and discover documents online. It is like a big online library where anyone can upload. We make use of a custom Flash document viewer that lets you display documents right in your Web browser.”
That’s great, cause if there’s one thing that my Web browser needed, it’s a way to display documents right inside it. I can’t believe Sir Berners-Lee left that feature out of the Web… what an oversight!
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Scribd WAS hot when it was just “this little company…”
But it shared the fate of every online service, software company or what have you out there that gets too big for its own head:
While “page clicks” or “reads” may be impressive numbers, they don’t really indicate genuine interest, such as a download would imply, and since Scribd removed the download stats for an individual document, they’re as good as saying,
“What the f… do we care whether anybody actually READS your document. We just assume you’re dumb enough to go gaga about our big numbers…”
Scribd was hot. Once upon a time. Now it will never be the same today that it was yesterday because they just keep from fiddling with it in order to make it “better” (for them).
Scribd.com took my copyrighted book and gave it away to over 27,000 people for free. Others took my four copyrighted DVDs and did the same thing for over 100,000 copies (10 times more than I sold). The effect of this….I’m not writing or producing DVDs anymore as apparently free = valueless.
The lack of protection assures that we move in other directions. The thieves were all US firms with a business model that perpetrates theft.
It is time for a change. I thought about litigating and still might. My brother is a United States Senator and I will be spending some time researching this by speaking and working with the law firms that have already litigated against scribd.com and others. So that a law can be crafted that will shut down all of these sites and collect compensation from those that have only served to stifle research by theft….For those that supported my work…thank you for that…..