StumbleUpon eBay for $75 Million and Never-Ending Bubbly

by lornali on July 10, 2007

words by Lorna Li, photos by Julie Blaustein

On Thursday, June 28, StumbleUpon celebrated a Summer Party at 111 Minna Gallery, in San Francisco’s Soma district, conveniently located downstairs from their office and a fortunate 3 blocks from my house.

Complimentary champagne, beer and wine flowed freely, with abundant, healthy veggies and cheese platters to compensate for the not-too-healthy splitting champagne hangover I felt the next day.

When eBay buys you for $75 million, there’s plenty of reason to toast – and StumbleUpon made sure there was plenty of bubbly to go around.

StumbleUpon is bub.blicio.us.

Photo credit: Julie Blaustein

If you don’t already know, StumbleUpon allows you to discover Web sites, people, videos, online communities, product information and more in a manner very much like channel-surfing, but for the Web.

All you need to do is simply download the free StumbleUpon toolbar. As part of the installation process, you choose which topics you are most interested in. Done. Then, every time you hit the “Stumble!” button, off you go to Never-Never land.

Since I became a Stumbler, I’ve stumbled upon websites showing low-impact Hobbit-like woodland homes, a real-time map of global carbon emissions, Sam’s mailbox picture collection, Greenpeace’s map of the gigantic North Pacific trash vortex, the incomprehensibly abstract dontclick.it experiment, and the Free Hugs Campaign, which, corny as it seems, both made me laugh and moved me to tears.

Oh my God…StumbleUpon is addictive.

Photo credit: Julie Blaustein

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The great thing about StumbleUpon is its simple rating system that allows you rate sites with a “thumbs up” or “thumbs down”. The community rating system enables StumbleUpon to make better recommendations as you stumble along, providing an increasing level of relevance over time. These ratings also connect people sharing unique combinations of interests. Stumblers can share their favorite web sites and interact with other users to further improve their web surfing experience.

Simply by word-of-mouth, the StumbleUpon community has grown 150 percent year over year, delivering approximately five million new recommendations a day to its roughly 2.3 million highly engaged users.

For most of us, StumbleUpon is just another fun, free web app that sits in your web browser and does cool things. Look below the surface, one will find a handy tool for social media optimization, unique revenue model and interesting implications for paid search. In particular, their new StumbleThru component is thought be the bigger motivation for eBay’s acquisition. While the purchase price might initially raise eyebrows, within a marketing framework, eBay’s $75M purchase of StumbleUpon is not a drug-induced hallucination.

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Photo credit: Julie Blaustein

Cashing In on the Tech Startup Fairy Tale

Now that’s pretty cool, and I must admit, over the past few months of writing for bub.blicio.us, I’ve discovered a lot of really great sites and web applications. The one nagging question that I, and many others hoping to work for a promising startup, ponder is – how do you pick a winner?

Michael D’Agosta, a recently recruited engineer, said that hiring with StumbleUpon was a strategic move. He researched the sector and interviewed with several interesting companies. But StumbleUpon was so engaging, it brought this über-geek back to the heyday of 1999, a time when the Internet was, for him, more about finding cool stuff on the Web.

“StumbleUpon differentiates itself from other websites by not seeing its users as prey,” he said. “One problem with many ad-driven web sites is click-inflation, the addition of extra clicks in order to display more advertisements. But this comes at a cost of user time, and that’s just rude.

If Web publishers were truly interested in enhancing the user experience and making their lives easier, they would add more value per click, at the cost of showing fewer ads.”

What he also liked about StumbleUpon is that advertisements are shown as stumbles, too, and the community gets to rate the ads. Sponsored content that doesn’t add value can be ‘thumbed down’ and thus filtered out of the user experience. In such way, the ads do not just sell something, they also add value to the user experience. To him, this was a novel idea.

Most importantly, Michael felt that many other social applications simply replicate what his email client already does for him, even if on a shorter timetable. By contrast, email could never replicate the collaborative nature of StumbleUpon.

When I asked him what advice he had for picking a winning startup, he said, “First of all, get underneath the hype.”

Start by interviewing and asking lots of questions, to learn the market topology… then pick something unique that you like. Make English your ‘primary language’, then know Python, Ruby and PHP. But don’t believe anyone who tells you that one is better than another. Be aware of your instincts and follow them; business on the net guarantees you won’t have enough information to make intellectual sense of things. Through it all, cultivate the human element -internet engineering isn’t about hardware or software, it’s about people.”

Michael was hired by StumbleUpon a sweet six weeks before the eBay deal.

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eBay’s $75M Purchase of StumbleUpon is “Not a Drug Induced Hallucination”

Social Media Optimization with StumbleUpon

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More Party Images. Photos courtesy of Julie Blaustein