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Summary:

[qi:110] Over the past few years we’ve seen the rise of cute ideas, ones we love using on a daily basis, but are hard to turn into real, long-term businesses. Most were hoping that a sugar daddy would buy their cuteness for bags full of money. […]

[qi:110] Over the past few years we’ve seen the rise of cute ideas, ones we love using on a daily basis, but are hard to turn into real, long-term businesses. Most were hoping that a sugar daddy would buy their cuteness for bags full of money. Scribd, a San Francisco-based company, is a perfect example. It has developed a way to embed documents (in various formats such as PDF and Docs) into web pages, but has struggled to come up with a way to make money.

That hasn’t stopped venture capitalists from pumping more cash into the company, which today raised $9 million in Series B financing led by Charles River Ventures, with re-investment from Redpoint Ventures and Kinsey Hills Group. It had previously raised $5.3 million in funding, much of which was spent on building its iPaper technology. That technology is actually pretty cool, and is a worthy rival to Adobe’s embedded online document reader, Flashpaper.  Adobe has killed that effort, making the development of iPaper look like a smart move. Scribd was previously valued at $10 million, so I wonder at how much they are being valued now?

It’s not alone in this business; it has a bunch of frisky little rivals, including Docstoc, which is fighting tooth and nail to get attention and market share. According to Compete.com, Scribd’s got about 5 million unique visitors and the company claims it has 50 million viewers a month.

The new money buys them a whole lot of time, but they will still face challenges. In today’s economy, buyers are as rare as well-adjusted former childhood stars, which means companies needs to build businesses that make money. The way I see it, the real money for this company will be in going after corporations and becoming an enterprise solution, but that may not be cool enough for Scribd. They have added George Consagra, most recently COO of Bebo, as president. Hopefully he will help them see the difference between cute and company!

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  1. i have visited scribd so 4 or 5 times and never again… no stickyness to documents

  2. Enterprise solution? Scribd would make a nice feature for our enterprise application. It would help me sell more seats, but I could not charge more for it. I can not see any way they can make money. Enterprise sales requires a sales force, long sales cycles and lots of support. Not in their DNA.

  3. “…It’s not alone in this business; it has a bunch of frisky little rivals..”

    Google Doc’s “Save as PDF”, “Publish publicly” and new PDF viewer is a “little rival”?

  4. Finanční krize? Scribd získal 9 milionů dolarů Friday, December 19, 2008

    [...] společnosti se nově stává George Consagra, který byl naposled COO social sítě Bebo. Om Malik na GigaOM do Consagry vkládá naděje: “Snad jim pomůže vidět rozdíl mezi tím být pěkný a [...]

  5. @Dan Cornish

    I think you have to think in terms of law firms and accounting firms as well who have mounds of paper that could be archived etc. If they were enterprise focused they could have sell out to EMC easily because it helps with digitization of the enterprise and increase the demand for storage. Just my two cents.

    @Todd…. just because it is Google doesn’t mean it is big. Google has more mediocre products than any VCs portfolio.

  6. Om – have you been back to nyc recently – this post has a good bit of ny’er in you! :)

    On a serious tip, these services are seo-plays (along with docstoc) – I would bet they have people setup just to find docs online and stick them in and slap a good bit of set on the doc/page.

  7. Raghu Kulkarni Friday, December 19, 2008

    Om,

    Document viewer by itself would have little value to businesses. The best bet for such services would be to combine a whole lot of them from email to document storage to viewer to editors etc, sort of google approach as a broad strategy to monetize.

  8. Scribd’s a joke. All their content is stolen from other companies. Do a search for well known books there… you’ll see what I mean.

    They need to get sued into oblivion!

  9. @Allen

    I have not but am planning to next week to get a good dose of reality. SEO plays would be an understatement if you looked at all the keywords they have been getting traffic from — redheads, army pinups and what not. Seriously, I wonder if anyone actually spent time on this service.

  10. @Raghu

    Things like this would be plain add-ons for what you offer.

    @Mike, Amen to that. You know any links you want to share with us :-)

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