This week Fog Creek Software received $6 million in funding from tech venture capital heavyweight Union Square Ventures to expand their Stack Overflow platform, which may have significant implications on social search. For those unfamiliar, Fog Creek Software owns Stack Overflow, an online forum web developers use to find answers and share advice about similar projects across the web.
More social than the forums that governed much of the web in the 1980s, Stack Overflow optimizes the flow of questions and answers by tagging and ranking them, while users simultaneously earn a reputation (as our resident enterprise engineer, Jason is well-ranked) in the community based on how well they answer questions. Stack Overflow gained traction rapidly over the last two years and this round of recent funding suggests Fog Creek may be ready to expand its community-driven answering service beyond IT and make it a viable business model for social search.
The community is rapidly becoming the de-facto answering service in the developer community. According to Stack Flow, the site has grown from zero to 7.1 million unique visitors in less than two years and is currently ranked #709 on Quantcast. Users rave about the speed with which they can seek out answers to their development problems and also regularly offer advice to other users. By encouraging participation, Stack Overflow ultimately fosters a community committed to sharing answers that now trumps Google in the eyes of many members.
Major players in the VC world seem to agree. Beyond its backing by arguably the top tech VC firm in the country, the brain trust assigned to this project should raise some eyebrows. Along with four of Business Week’s top 25 angel investors in tech, the project also includes Miguel de Icaza, a long-time leader of several community-driven projects for Linux software. The team has already made changes to Stack Overflow’s current offering to facilitate community building, such as a new method for tapping into and growing communities, removing the initial $130-$5000/mo. price tag and protecting all information on the site with a creative commons license.
So will this model destroy Google or Facebook? Hardly, but if the Stack Overflow model generates similar explosive growth in other community spaces, brands will reap the benefits of a social service that neither Facebook Fan Pages nor Google search results currently provide.
Specifically, Google search results do not address subjective questions well and this void could potentially be filled by a community of enthusiasts rather than an algorithm. Google acknowledged this gap in its answering service by acquiring the social answering service Vark for $50 million in February. Similarly, Facebook’s fan pages provide a hub for users with common interests, but are not structured to answer critical questions efficiently.
Fog Creek’s recent round of funding from a high profile VC firm indicates that they intend to bridge this gap and provide a more engaging and useful community that eventually could be tapped by marketers in all verticals. More importantly, this funding may also affirm an emerging market for community-driven answering services in search.
