A leading company focused on virtual transformation.
Last month, entrepreneur David Karandish joined the “Recession-Proof Startups” podcast to talk about how he and his business partner, Chris Sims, acquired Answers.com in 2011 for $127 million and then sold it three years later for $960 million.
Answers.com, with its loose user-generated content, a cow of coins: it generated millions of page perspectives almost without a production charge. Karandish, who learned from the beginning the perspective of this low-cost, high-performance model, knew there were currencies to make if the concept can be optimized and scaled, which he did.
As Karandish explains, he and Sims entered the content business by accident. They had created a value comparison site in 2006, then called FindStuff, whose main source of profit advertising.
In vertical spaces where they lacked content, the team began experimenting with a Q&A platform, whose benefits Karandish understood: loose user-generated content to produce can be simply publicized and ideal for generating biological traffic.
“We thought, ” This is a pretty attractive model. I wonder if there’s one in front of us who we can marry and who can help us speed up what we do,” Karandish said.
It’s time for the soft bulb that led them to win Answers.com.
In 2011, Karandish acquired Answers.com, which was indexed at the time, for $127 million. The site was again personally owned and the new control temporarily put two macro action plans in place.
First, they took a step forward in the product by diversifying content types. They added detailed articles, coupons, recruited featured participants, and implemented an updated search feature. “We’ll probably try another 30 things,” Karandish said.
They also optimized Answers.com, ensuring that it contained applicable key terms that were less difficult to locate in an Internet search engine. After years of managing a retail comparison site, the team knew that keyword marketing, referrals, and advertising were essential.
They also rigorously tested A/B on almost every part of the site, according to Karandish. In A/B tests, developers provide other website visitors with slightly different versions of the same websites. The site then tracks the user’s actions, recording how the other page provides user behavior.
By running thousands of those tests, developers can optimize a design to inspire quick actions. For example, to increase the likelihood that a user will respond or submit a query on the site, UI specialists would possibly review to replace the color of a button, adjust the wording of a sentence, or upload an avatar to a user. Profile.
Amazon, famous, performs A/B tests constantly; Today, all major websites use “split tests” to make them easier to use and inspire users to get used to it. In 2011, however, these practices were less ubiquitous.
“We tested and optimized each and every pixel of the site,” Karandish said. “We found that there were very small adjustments that we could make and that they would have dramatic effects on any main metric we were looking to move.”
Finally, because their trading style relied heavily on Google’s search algorithm, they sought to diversify their profit streams. Karandish to sell the software that allowed its Q&A platform to other websites, creating subscription software that helped stabilize profits.
“We had a trail of a business that generated $100 million in profits in the north, a significant part of which also through subscription gains,” Karandish told entrepreneur and Alejandro Cremades.
Answers.com was one of the first hybrid software and internet companies at a time when ‘software’ meant Oracle and Microsoft and ‘internet’ meant Google and Yahoo.
“We didn’t have a simple box to install from an open company’s point of view,” Karandish said.
However, Karandish sold the company to equity firm Apax Ventures for $960 million.
The saga captures the mania of early web advertising and the gold rush for collecting views, a state of affairs that explained the beginnings but is largely extinct today.
After the acquisition, Karandish moved away from the company, which represented his 11-year career. He is now CEO of Capacity, a SaaS corporate synthetic intelligence company.