[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!