What a week for StumbleUpon: $17m in series B funding and a new revenue stream

by Liam Britten | Business

In case you haven’t heard, last Wednesday saw the success of StumbleUpon’s latest round of fundraising. $17 million in new capital from companies like Accel Partners, August Capital, DAG Ventures, and Sherpalo Ventures was finalized last week.

The company produces a namesake browser extension (and more recently, mobile app) that takes user recommendations and analyzes them to suggest new content. As Reuters reports, the company’s flagship product has been seeing tremendous growth over the past few years:

Even though the toolbar has been around for a while, traffic is still growing at an impressive pace. The San Francisco company says it now has more than 14 million registered users making more than 800 million content recommendations per month. It also says that its iPhone and Android applications have been downloaded more than 1 million times.

But that wasn’t all StumbleUpon was up to this past week; on Sunday, they announced a new advertising revenue generator called StumbleUpon Paid Discovery. Basically, it allows advertising companies to pay to have their results show up for users more often, kind of how Google gives sponsored links preference in results rankings on their searches.

PC Magazine has some details:

The slightly interesting twist is that companies will be able to promote not only URLs that they own, but also other pages that they might be incentivized to see grown in popularity. For example, a book publisher could run a campaign to promote The New York Times's glowing review of the title, which may result in more book sales than if the publisher had promoted its own site. Or a movie studio might see more value in promoting a fan-created YouTube trailer of a film than its official one.

Paid Discovery supports in-stream promotions of entire Web pages, micro-sites, mobile sites, and videos and only recommends the content to users who have clearly expressed preference for a particular interest.

On the back-end, businesses that sign up for a campaign get access to a Web portal that will show them how their efforts are faring, including the amount of time users spent with their content and statistics related to how users share the site across StumbleUpon, Facebook, Twitter, and e-mail. Marketers pay only for every engaged unique user to their site. If a user likes a brand's content and shares it with others, Paid Discovery will recommend the content more often, leading to additional traffic.

Marketers running campaigns with flight deadlines have the option to be served ahead of other sponsored content. Two different price points, $0.10 and $0.25 per visitor, determine how much delivery the marketer receives, while only paying for those visitors that were engaged with the brand's content.

So it’s a little sneakier than Google’s method, but it lets advertisers get more creative in the content they choose to promote their businesses. It should be noted that content that gets priority from being part of Paid Discovery will be marked as such when it shows up in a user’s results.

StumbleUpon is an interesting company with an even more interesting history. It was originally an idea from University of Calgary grad students that was first launched in November of 2001. Around 2006, the site really took off in popularity, approaching two million users. They moved to Silicon Valley, and in 2007, eBay, for reasons unclear at the time, bought the company for$75 million.

The relationship was not to last. In 2009, the company spun off from eBay and regained their independence after being purchased from eBay. The Series B funding round that closed last week has been one of their biggest post-eBay developments —along with, of course, growing to over 14 million users by successfully leveraging both online and mobile engagement.

You can check out more from StumbleUpon here.

San Francisco, California, United States

StumbleUpon helps you discover and share great websites. As you click Stumble!, we deliver high-quality pages matched to your personal preferences. These pages have been explicitly recommended by your friends or one of 6 million+ other websurfers with interests similar to you. Rating these sites you like automatically shares them with like-minded people – and helps you discover great sites... more

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Liam Britten

Liam Britten

Liam Britten is a writer and editor with a journalism background operating out of Vancouver. In addition to his work at Techvibes, he has been published in student publications across Canada, as well as local newspapers such as The MapleRidge-Pitt Meadows TIMES and The Langley Advance. An aficionado for the finer things in life — such as video games and sports — Liam is plugged into the tech... more

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