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Summary:

Last couple of days from many different sources we have been hearing about this little company called Scribd. A funding frenzy is taking place around the company, with some of the top name venture capitalists jostling to invest in the company. There has been talk of […]

Last couple of days from many different sources we have been hearing about this little company called Scribd. A funding frenzy is taking place around the company, with some of the top name venture capitalists jostling to invest in the company. There has been talk of an acquisition offer as well.

What we have heard from multiple and reliable sources that the company was offered $5 million on a post money valuation of $10 million, but passed on that offer. Someone offered to buy them but for now our sources say that Redpoint Ventures has invested a substantial amount of money at twice the valuation of the initial offer.

We asked Chris Moore, a partner at Redpoint Ventures, about all the hoopla, and he offered a “no comment.”

Scribd had previously raised about $300,000 in seed funding, on top of $12,000 it received from Y Combinator. What is Scribd anyway? As per their FAQ:

Scribd lets you publish and discover documents online. It is like a big online library where anyone can upload. We make use of a custom Flash document viewer that lets you display documents right in your Web browser.

Part of the idea behind Scribd is that everyone has a lot of documents sitting around on their computers that only they can read. With Scribd we hope to unlock this information by putting it on the web.

The technology behind the company is pretty impressive, and the traffic growth according to Compete.com and Quantcast has been pretty impressive. though one has to wonder if it merits such high valuation. A sign of the times?

By Om Malik

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  1. Hi Om!

    Apparently it is considered the YouTube of documents. Now you see the reason for frenzy?
    All it takes is the right mental association.
    To twist an already coined phrase – “It’s not what you do, it’s what it looks like”.

    But to be fair, they must be seeing a lot of page hits.

    P.S. I am doing some blogging on the IT scene in Pune India, while I visit. I had some interesting experiences trying to get broadband connectivity for my visit.

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  2. YouSendIt.com raised $10 mln a few days ago. Comparing to Scribd, Yousendit.com is no-brainer. Probably huge traffic of file sharing and file delivery sites lures investors.

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  3. How is it again that you make money from this?

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  4. This is going to be another successful site.

    Should to see some copycat sites pretty soon.

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  5. So why would I want to upload my documents to this site again? Just curious.

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  6. Met the Scribd team a couple weeks back. They are extremely talented and down to earth. And interested in building something huge – instead of trying to flip for a quick buck. Think Redpoint invested in the team as much as the product.

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  7. Seems scribd.com is growing not because of viral or other defendable source of traffic. But rather its growing mainly thro SEO.

    IMO, This is nothing more than any other user generated article site like squidoo.com

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  8. I took a quick look at the traffic graphs for Scribd and compared with a few other “start up” sites…according to Compete & Quantcast, Scribd might get about 100-200K uniques / month, and less than 500K pageviews.

    Our site – FunAdvice – no funding, part time employees, etc, gets more than 350K uniques & a million monthly pageviews. The charts on both Compete & Quantcast show that it’s far ahead of Scribd…and yes, we’re in a totally different space.

    But why is such a small site merriting such attention? I have yet to figure out why I need a “youtube for documents” personally.

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  9. One thing Scribd is doing is hitting the front page of Digg with incredible frequency. They are posting really timely, funny, crowd-pleasing PDF content (who knew such a thing existed??) and they are getting piles and piles of Digg. We at SplashCast are using a similar strategy – using content delivered through our service to participate appropriately in social media conversations – but while we’re very proud of our 14 Digg front page appearances in the last 4 months, Scribd is the leading example of this tactic. They hit page one 9 times in one month and had more total diggs in that time period than all but 9 other domains on the web. (for stats see http://elfurl.com/qvabu )

    Heck, we even provide similar functionality for PDFs, but online humor isn’t my strong point and the people at Scribd are leveraging the heck out of it for big traffic and visibility. I’m sure this is only one of many factors, but the strategy does work – even for user acquisition. We’ve doubled month over month since launching and I’ll bet Scribd is seeing really awesome growth in new users. It’s awesome that some of that visibility is translating into potential financial support. It reminds me of the boost Hitwise can’t help but have gotten from blogging (see http://elfurl.com/c486t ) To some degree, these are stories illustrating a new paradigm: vendors who participate in conversations can really benefit from it.

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  10. Again, why are they getting funding?

    Based on the various analysis services their reach is anemic. Getting dugged or slashdotted (or written up on Om of TecCrunch) leads to short-term traffic spikes.

    I hope they are successfull because its a good idea what they’re doing. But more and more it seems that funding is predicated on who you know, not how succesfull your site is.

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