The open source vendors were perfectly happy to turn a hundred billion dollar industry into a one billion dollar industry, as long as they sat on top of the smaller stack.
StackOverflow is clearly happy with a large piece of a smaller pie, and the "evil hyphen guys" are never going to be able to compete with that.
The challenge for SO is to see if they can maintain a high quality corpus as they scale, so people will keep producing and consuming their answers.
1. I'm so used to the hyper-insightful Hacker News business users that the many of the SO responses seem very idealistic. In other words, I get the impression that a lot of them are coders who think the world 'should work a certain way' but have no real business experience.
2. SO isn't making much money and isn't too keen on telling what their business model, if there is one, actually is.
I'd say he avoided the actual question rather deftly, which is how SO is going to scale from a traffic and ad site to a site that brings in the kind of money that VC's want.
What StackOverflow did to Experts-exchange, StackExchange is trying to do to Demand Media/eHow, and they seem to be trying to do it the same way by building a better product and providing better answers.
Not quite. They're pretty big on focusing only on topics where meaningful questions have right answers, as opposed to (I swear this is an actual eHow page) How To Pour Water Into A Glass.
I could see someone trying to look up tricks to pouring water without spilling it, maybe. Never thought I'd say that, though.
SO's currently making about $150k/month from job listings on a tiny fraction of the market.
Best I could do was this:
$2bn just for finding developers (that must include non-programmers) sounds plausible, didn't realize recruitment is such a large industry.
But roughly it comes down to 320k developers changing jobs every year * an average spend of $9000 on recruitment costs.
Furthermore, since SO profiles are public, other job-listing companies in the market can easily leach off the reputation mechanism just by adding a "Stack Overflow profile" field.
Stack Overflow is a wonderful site, but I think their free services are a long-term threat to the profitability of their premium services. When knowledge is free, there's no reason to employ an expert.
Do you think this will result in the same quality of work as if a master wood worker had done it?
Why would you imagine software to be so different?
Being able to get past any particular technical speed bump is a tiny part of what makes a more experienced developer valuable.
There is a wealth of knowledge on Wikipedia for instance but that doesn't mean I wouldn't rather prefer to go to an actual doctor
I can specifically recall them describing how their attempts to do Amazon Affiliate sales of books on the site were being undermined by people removing the affiliate codes from the links.
It doesn't increase the cost of the item (afaik), and provides the source with some revenue.
They are following the same path Google did. When Google started the didn't know how exactly they'd make their money. Their goal was to be the best (and least intrusive) search and monetize later. Being the primary, trusted source of information in a bunch of vertical search areas has obvious value.
One potential avenue is to become a sort of university. They know the areas that people are asking lots of questions about and could setup a course to cover the topic. They don't actually have to be the ones to setup the course. They have the information to sell to someone who would setup the course.
The preceding is just an example of how being the leader, that is having the information, is the business model (or goal if you will). Trusted information has value.
If SO doesn't monetize their traffic somehow, they'll go bankrupt despite providing value to their users.
That's not a business model in the strict sense -- this guy's asking, "how does Stack Overflow make money?"