Quora Business Model | How Does Quora Make Money?
Quora is a question-and-answer website that enables users to submit questions publicly or anonymously. It has grown in recent years as a result of several rounds of investment from venture capital firms.
Quora now earns money through advertising.
A Q&A platform where real humans respond to each other questions. The Quora Business Model is unique and was created to remain in the market for an extended period.
Quora was founded in 2009 by Adam D’Angelo and Charlie Cheever, two former Facebook employees with an estimated valuation of $ 2 billion.
The startup is still growing at a three-digit rate solely to build a database of high-quality answers to the questions asked by millions of its users.
What Is Quora?
Quora is an online community where you can ask and answer questions about a wide variety of topics.
It is a question-and-answer social networking site powered by user-generated content, where Internet users can ask, answer, follow, and edit questions.
Quora earns money from text and image advertisements displayed on the platform. Advertisers can bid based on cost per click, cost per thousand impressions, or cost per conversion.
Celebrities, CEOs, and other high-profile figures are among Quora’s active users. At first, Quora lacked a revenue model. But eventually, Quora started generating revenue.
So how does Quora generate revenue?
Like every other social media, Quora also generates revenue by displaying advertisements on its platform.
Quora actively promotes the advertising market by strategically integrating advertisements into the content rather than using them as an overt marketing tool.
How Does Quora Work?
Quora is an online community where you can ask and answer questions about a wide variety of topics.
The platform is divided into sections called spaces, each of which is devoted to a specific subject. Finance, mobile, technology, and Artificial Intelligence are just a few examples.
The homepage and every space of Quora display a feed of recently asked questions. Quora displays questions and answers to its users according to their preferences, frequently visited spaces, and search history.
Quora is a standard forum with an exceptional relevance model and a remarkable user base.
The company receives over 300 million unique monthly visitors, with 82 percent of users accessing the platform via a smartphone.
To start using Quora, you need to create an account using your email address or social media profiles such as Facebook. Quora asks users what they’re interested in and automatically assigns them to the spaces that match their interests during the sign-up process.
You can either respond to existing questions or submit the questions you need answers to.
The questions are automatically classified into appropriate topics called spaces, which the users can follow.
You can comment on, upvote, and share other users’ answers on Quora like every other social media. Normally, the answer with the most upvotes is displayed at the top of the page.
If you enjoy a particular user’s responses, you can also choose to follow him or her. Quora will notify you automatically whenever that user publishes a new answer.
Additionally, similar to Facebook and other social media platforms, Quora offers a personalized homepage feed based on your interests and activity on the platform.
You can access Quora by visiting Quora Website or downloading the Quora Smartphone app for your Android and iOS devices.
What is the History of Quora?
Quora was founded in 2009 by Adam D’Angelo (CEO) and Charlie Cheever in Mountain View, California.
Before founding Quora, both D’Angelo and Cheever worked at Facebook as senior executives. Cheever joined Amazon as a software engineer in 2003, after graduating from Harvard.
Cheever met D’Angelo at Facebook, where he was hired as the company’s first VP of Engineering in 2004. D’Angelo was promoted to Chief Technology Officer of Facebook in 2006.
During his university years, Adam began assisting Zuckerberg in the development of Facebook. After graduating from Caltech, he joined the company, where he quickly rose to the CTO position.
D’Angelo eventually became dissatisfied with the platform’s rapid growth and desired a return to startup life. He eventually settled on knowledge sharing as a worthwhile problem to solve.
At the time, platforms such as Aardvark or Yahoo Answers already drew millions of monthly visitors. Nonetheless, many of those responses were of poor quality and frequently spammy as Yahoo did not bother to verify users.
D’Angelo collaborated closely to address the challenge of developing a knowledge base platform that surfaces high-quality answers from reputable sources.
After leaving Facebook in April 2009, the duo began working on Quora.
The development of the Quora website took over 9 months, and the portal gained traction as employees invited friends, who invited friends of friends.
The team announced that Quora would be made available for initial testing to a select group of users in January 2010.
The platform attracted a slew of Silicon Valley heavyweights eager to provide in-depth and high-quality responses given D’Angelo and Cheever’s reputations.
Quora was finally made available to the general public in June 2010 in the private beta. Existing users could invite up to 10 people to join Quora. During the company’s early years, one of the more intriguing growth hacks was algorithmically creating Twitter accounts based on Quora groups.
These accounts would then tweet highlights from the organizations they represented.
In its early years, Quora released a new feature almost weekly. This was made possible by hiring over a dozen engineers, the majority of whom came from Facebook. Embedded videos, user credits, threaded comments, and personal-themed bookmarking boards were some newly introduced features.
As a result, Quora was able to add millions of new users and secure additional funding. It raised $50 million in May 2012 at a $400 million valuation – less than two years after going public.
What was particularly surprising about the funding round was D’Angelo’s contribution of $20 million to his platform.
Quora joined the Y Combinator startup accelerator in 2014. The Q&A platform has raised a total of $226 million from 14 investors in four funding rounds. Among the investors are Peter Thiel, Tiger Global Management, Josh Hannah, and Sam Altman.
Nonetheless, all of those new features resulted in some worthwhile learning opportunities. Immediately following the funding round, Quora launched a feature called Views that displayed information about the specific posts that other site users had viewed in their user feeds.
These users felt their privacy was jeopardized, prompting Quora to remove the feature.
It was not the only downfall for the company that year. Cheever announced in September that he would step down from day-to-day operations he held for another three years and take on an advisory role.
The company continued to grow in the following years, adding features and users to its platform.
Quora added the verified user feature in March 2014, with former President Barack Obama becoming the first verified user and even answering some questions along the way.
Quora announced another $80 million funding round at a valuation of $900 million, more than doubling its value over two years a month later in 2014.
Despite investor convictions & concerns, Quora quickly arose about its ability to continue operating without monetizing its user base.
The revenue model of Quora was changed in April 2016 when the platform introduced advertising on its website.
The company began its long-awaited international expansion in August of the same year. It launched a Spanish-language version of Quora that was distinct from the English-language version.
Quora achieved unicorn status in April 2017 and raised $85 million in a Series D round, valuing the company at $1.8 billion.
A year later, in December, the news of hacking Quora surfaced with compromising the data of its 100 million users. The hackers stole personal information such as names, emails, encrypted passwords, questions, and answers.
Quora reported worth $8 million of revenue in 2018 and 300 million monthly unique visitors as of Jan. 23, 2020.
Quora’s success is largely due to its elegant user interface, its initial base of intelligent and committed participants, and its effectiveness at highlighting the most useful and interesting content for individual users.
Quora has continued to expand internationally in recent years, refine its product, and, as of June 2020, become a completely remote company (as a result of the coronavirus pandemic).
Today, Quora has over 300 million users and employs over 300 people worldwide.
The content on Quora is entirely dependent on the community it fosters; the community generates questions and answers for the platform.
How Does Quora Make Money?
Quora generates revenue by displaying advertisements on its platform. Advertisers on its platform include well-known brands worldwide, such as Toptal, Honey, Crunchbase, Zenefits, and Shopify.
Advertisements on Quora may be in the form of text or images. The company considered integrating video advertisements but has not yet implemented them.
Quora earns money based on cost-per-click (CPC), cost-per-thousand-impressions (CPM), and conversions.
Quora has done a better job by incorporating ads into its revenue model by focusing on relevant ads from relevant advertisers. Ads are so seamlessly integrated into the Quora revenue model that they appear to be a natural extension.
Advertisers pay Quora a cost per click (CPC) when someone clicks on their advertisement.
CPM is based on so-called impressions, which means advertisers will pay whenever at least 1,000 users see an ad on the screen.
You can see advertisements on both the homepage and the forum pages. The price Quora charges are typically determined by the number of advertisers bidding for the spot.
Finally, advertisers can compensate Quora whenever a user converts due to seeing the advertisement (i.e., he or she sees it and ends up buying the product advertised).
The price of conversion is done using an auctioning system. Every advertiser bids on a specific user category or keyword, advertiser bids. The highest bidder are awarded the right to advertise at the rate it selected during the bidding process.
Advertisers typically create a budget for their campaigns monthly. Once the budget is over, no additional advertisements are displayed to users.
Advertisers can optimize their campaigns using various tools available through Quora’s advertising platform, including retargeting, geotargeting, and advanced reporting.
What are the Types of Ads on Quora?
Text & Image Ads and Business Profiles with Promoted Answers are the types of ads offered by Quora.
Text And Image Ads
Initially, Quora’s advertising format was limited to text ads. It is still one of the most frequently used ad formats due to its perfect fit within the responses.
However, image ads enable the advertiser to stand out and even include the company logo alongside the ad image and caption text.
Business Profiles & Promoted Answers
Advertisers can use promoted answers to share detailed information about their offerings in a more engaging manner.
This aids advertisers in establishing thought leadership, increasing top-of-funnel awareness, and even executing their inbound marketing strategies.
Typically, these promoted answers are written by brand accounts, which Quora refers to as business profiles.
These business profiles are another paid feature offered by the company, as it adheres to a strict policy of using original full names for users’ accounts.
However, there are instances where brands employ well-known individuals, brand ambassadors, employees, etc., to write promoted responses on behalf of the company.
What are the Advertising Solutions offered by Quora?
When it comes to advertising, Quora is on par with other social media platforms. The company offers solutions that enable advertisements to be targeted based on –
- Context: Advertisements that appear alongside content that is relevant to specific topics, keywords, or questions.
- Audience: Advertisements targeted at a specific audience based on web traffic, lookalikes, or contact lists.
- Behavior: Ads that are relevant to the user’s interests.
Additionally, the bidding on such advertisements follows current trends –
- CPM: Cost per thousand impressions, which is used to increase the number of impressions on advertisements.
- CPC: Cost per click, used to determine which landing pages receive the most traffic.
- CPA: Cost per action to obtain the greatest number of conversions.
What is the Vision of Quora?
Quora was founded by Adam D’Angelo and Charlie Cheever with the mission of “sharing and growing the world’s knowledge.” According to the social enterprise’s website:
A substantial amount of knowledge that would benefit many people is currently only accessible to a select few—either locked away in people’s heads or restricted to select groups. We want to connect those with the knowledge to those in need, bring people with disparate perspectives together to understand one another better and empower everyone to share their knowledge for the world’s greater good.
Quora democratizes knowledge by providing an open platform for anyone, from the casual reader to Mark Cuban and Mark Zuckerberg. The user community runs the crowdsourced Q&A platform entirely. Users pose questions such as “Could two astute computer science Ph.D. students build a search engine capable of dethroning Google?” Users can then respond to questions and provide additional information.
Finally, the Quora community votes on an answer, similar to the popular social platform Reddit. The responses that receive the most upvotes are highlighted and viewed the most frequently.
Also read, How Does Honey Make Money?
How Much Funding did Quora Raise?
Quora has raised a total of $226 million in venture capital funding over four rounds, according to the Crunchbase report.
Y Combinator, Tiger Global Management, Founders Fund, Matrix Partners, SV Angel, and Benchmark are notable investors.
What is the Net Worth of Quora?
Quora raised a total of $452 million in funding following an $85 million Series D investment. Quora is among the so-called Unicorn status startup list, with a Tech Crunch valuation of $1.8 billion.
If the company grows and attracts larger investors, it will soon seek an initial public offering. However, before taking this step, Quora must demonstrate that it can generate sufficient revenue to sustain its growth.
What is the Revenue of Quora? Does Quora make any Money?
Quora generated $20 million in annual revenue in 2018, according to Recode. Since then, no new revenue figures have been shared.
What is the User Base of Quora?
As of Jan. 23, 2020, Quora has 300 million unique monthly visitors.
As of 2021, the figure is expected to be higher. The site has a male-to-female ratio of 57:43.
Also read, How Afterpay Makes Money?
Who is the Owner of Quora?
Quora is not required to disclose its ownership structure to the public as it is a private enterprise.
D’Angelo retains a sizable portion of the company equity.
Every funding round included a maximum of 15% dilution of the founders. Additionally, D’Angelo invested $20 million of his own money (= $50 million) in the firm’s Series B round.
On the other hand, Charlie Cheever is unlikely to own a sizable or even any stake in the business. Given his departure from Quora in 2012, he almost certainly sold a portion of his equity in subsequent funding rounds.
Benchmark and Tiger Global Management are likely to be the largest institutional shareholders. Both funds participated in two distinct funding rounds, leading one of them.
If you enjoyed reading this article, also checkout How Robinhood Makes Money?
