NEWS: Answers Corp Dependence on Google SEO

Recent Events In July 2007, a search engine algorithm adjustment by Google led to a drop in Google directed traffic to Answers.com. This adjustment reduced our overall traffic by approximately 28% based on the average traffic directed to Answers.com from Google for the week prior to the adjustment as compared to the week after. As a result, our revenue also declined proportionately. We have not been able to reverse the impact of this adjustment, and we do not anticipate that we will recover the lost traffic and revenue. In response to the Google algorithm adjustment, we reduced our headcount and related compensation costs, reducing our base payroll expenses by approximately 12%. As a result, we recorded a charge of approximately $250 thousand in the third quarter of 2007, related to this restructuring.

In September 2007, Yahoo! dropped our content from its search index, which reduced our Yahoo! directed traffic. This action was reversed within a week, and we have recovered all of our Yahoo! directed traffic.

Note 5 — Major Customers

During the nine months ended September 30, 2007, the vast majority of the Company’s advertising revenue was generated through the efforts of third party ad networks. Additionally, during the three months ended September 30, 2007, the Company earned approximately 67% and 8% of its total revenue through two of its third party ad networks, Google and Shopping.com, compared to 70% and 15%, respectively, of the total revenue during the third quarter of 2006. Of the total revenue during the nine months ended September 30, 2007, Google and Shopping.com accounted for approximately 65% and 9%, compared to 67% and 15% of our total revenue during the same period in 2006.

Traffic 

Our revenue is primarily driven by the traffic generated by our Web properties and our ability to effectively monetize that traffic. Our current sources of traffic include the following:

 

•       Search engines : Users submit queries and algorithm search engines respond by generating a list of Web pages that are likely to offer the most relevant content. When our pages rank high in the algorithmic systems of search engines, our results are more likely to be accessed by users. According to our internal estimates, for September 2007, this source of traffic represented approximately 60% of our traffic. 

•       Google’s definition link :  We have an informal, non-contractual relationship with Google under which Google links search results related to certain definitional queries to Answers.com.  According to our internal estimates, for September 2007, this source of traffic represented approximately 15% of our traffic. 

•       Direct users : Users visiting our Web properties directly.  According to our internal estimates, for September 2007, direct users represented approximately 25% of our traffic.

The following table sets forth our Answers.com average daily page views and RPM, since our launch of Answers.com:

 

		Average Daily Page Views		Ad Revenue  (Thousands)			RPM
Q-1 2005		1,010,000		$	107		$	1.17
Q-2 2005		2,000,000		$	357		$	1.96
Q-3 2005		1,990,000		$	500		$	2.73
Q-4 2005		2,370,000		$	807		$	3.71
Q-1 2006		2,920,000		$	1,090		$	4.15
Q-2 2006		3,030,000		$	1,457		$	5.29
Q-3 2006		3,400,000		$	1,810		$	5.79
Q-4 2006		4,340,000		$	2,400		$	6.02
Q-1 2007		5,470,000		$	2,768		$	5.62
Q-2 2007		4,890,000		$	2,551		$	5.73
Q-3 2007		3,730,000		$	1,861		$	5.41

 

 

Facebook Funds Launched

Facebook, Accel and Founders Fund Launch fbFund; To Give Grants To Facebook App Startups

The size of the fund will be $10 million (coming from Accel and Founders Fund) with anywhere between $25 to $250 thousand in grants available for each selected startup dedicated to developing Facebook applications. Founders Fund and Accel will get the right of first refusal for the first round of financing of any company in the fund.

Peter Thiel of Founders Fund and Jim Breyer of Accel will be involved in the fund. Josh Kopelman of First Round Capital, founder of LinkedIn Reid Hoffman, Rajeev Motwani of Google, and Mark Zuckerberg himself will be on fbFund’s board of advisors. Chamath Palihapitiya, VP of Product Marketing and Operations of Facebook, will be handling fbFund internally for Facebook.

Zuckerberg’s announcement comes two months after Bay Partners decided
to earmark millions of dollars for investment in Facebook applications. Bay
Partners’ prospects will certainly be diminished as the result of Facebook’s
move to fund applications built on its own platform.

"To make sure that everyone understands the conditions of submitting a grant application, we will not review any materials you have sent via email, and any materials you may have sent have been deleted," the copy-pasted e-mail read. It's apparently to ensure that applicants know that the company "can't promise that any materials or information (they) submit here will be kept confidential, or specifically that (Facebook) or others might not develop similar or identical products or services."

Attention Facebook Developers!

On July 4, 2007, Altura Ventures announced the Altura 1 Facebook Investment Fund becoming the world's first Facebook-only venture capital firm. The fund is focused exclusively on the Facebook social operating system, the F8 development platform, the growing number of facebook applications and the developers, advertisers and users that are participating in the Facebook eco-system.

Announcing the New KP Facebook Fund: KPCBFBAF (Fictional Tom Perkins)
By Tom Perkins 9/18/07 10:30 AM EST New York

I wanted to take this opportunity to announce The Kleiner Perkins Facebook Applications Fund (KPCBFBAF) which recently closed on $150 million of capital. I’ve recruited Chamath Palihapitiy, Facebook’s VP Marketing and Operations as well as Gideon Yu, Facebook’s CFO to our Investment Board. The Fund, whose primary limited partner is Harvard University, will be dedicated to investing in applications developed for Facebook. We’ll be looking to invest sizable amounts of capital into each company from $2 million to $5 million over the life of the company.

the CRV QuickStart Seed Funding Program.

CRV QuickStart provides select entrepreneurs with a loan to fund the work needed to build out your idea, enabling you to explore its potential in its earliest stage before you raise a round of formal equity financing. By offering up to $250,000 in the form of a loan (also referred to as a “convertible note”), we’re providing the capital to fuel ideas without that painful seed-stage dilution.

Meet the Next Billionaires

Calling all geeks! Do you have a hot idea for a start-up? If so, this boot camp where Silicon Valley meets 'American Idol' is for you. That is, if you make the cut. By Steven Levy Newsweek Web Exclusive

It's dramatically cheaper to start a company now than it was in the dot-com boom, and possible to build a substantial operation before requiring venture capital or achieving that liquidity event. (To pay salaries and costs during that time, one can get "angel funding"—less money than a VC firm pays, but in exchange for less equity.) Software tools, which used to cost hundreds of thousands, are now largely free. A wide variety of tasks can be outsourced cheaply. Computers, servers, bandwidth and storage cost a fraction of what they did a decade ago. And there's no need for a marketing budget when you've got Internet word of mouth.

NEWS: Facebook welcomes outside services

Facebook welcomes outside services — May 24, 2007

Facebook announced Thursday that the No. 2 social-networking site is allowing software developers to create applications, or "widgets," for Facebook users. MySpace executives may yawn, but Facebook is also going to allow other companies to open retail services and advertise on the site, Facebook founder and CEO Mark Zuckerberg announced at a media event here Thursday.

"You can serve ads...or if you don't want to advertise, you can just sell something," Zuckerberg told an audience of journalists and outside developers. "You keep all the revenue."

This contrasts sharply with MySpace's philosophy. It's against MySpace rules for anyone other than MySpace to advertise on the site.

...