StumbleUpon – The Value of Being Distributed

As reported by TechCrunch and GigaOM, website rating and discovery service StumbleUpon has been purchased by eBay at a price of $40-$50M. 

This is one of those exits that makes you feel really good for the founders.  Founded in Calgary, these guys have been toiling away since late 2001.  This was not a blue chip, built to flip, Silicon Valley golden company.  These guys are bootstrappers, and achieved their exit with only $1.5M in funding, which they took only after they had achieved critical mass.

While StumbleUpon may not be a widget company, they do a share a major characteristic of widgetized companies – they are primarily a distributed service.  Here’s an excerpt of a StumbleUpon review that I wrote in March of last year:

I'm amazed how smart people are. StumbleUpon is brilliant. It's one of these neat, social tools that epitomize the whole "web 2.0" movement, and is a great way to discover new Web sites based on stuff you like. The whole key to it is a Firefox extension in your browser that allows you to indicate what web pages you like as you search the web. So it's distributed... this is a big deal, as it goes with you - it doesn't force you go to any destination web site to share your opinion.

Isn’t this what widgets are about as well?  Letting users enjoy content and functionality in the flow of their web surfing experience without forcing them to come to your domain?  Widgets have the advantage of not requiring a download, while toolbars have the advantage of being immune to the whims of a turf protecting host site.

My other immediate thought when I heard about the StumbleUpon acquisition is that this might be an opportunity for some of the other social bookmarking services to make some headway.  StumbleUpon is a tiny acquisition for a business like eBay, and could easily get lost.  There are plenty of examples of surging start-ups that have been derailed by an acquisition.  Dodgeball and Google comes to mind. 

I’ve also been seeing a number of distributed website and blog post rating widgets popping up recently that might benefit from StumbleUpon losing a little momentum.  Blogarate, JS-Kit, and Spotback are all trying to play in this space.  Stumbleupon being taken off the market by a seemingly non-related business could be a real opportunity for these guys.

Congratulations to StumbleUpon on the exit, and it should be interesting to see if eBay tries to jam them into some sort of auction related direction.  If they do, it could be a real opportunity for a distributed discovery / rating service to fill the void.

Comments

[Clarke Scott]

Hi Ian,

Thanks for the mention. Did you know that http://blogarate.com is up for sale?

If anyone is interested they can contact me directly clarke.scott @ blogarate dotcom

[Clarke]

Sorry Lawerence I called you Ian!

My only excuse is that I just woken up as it's AM here in Australia as I write this :)

[lawrence]

No worries :) BTW, have you checked out http://web2.0forsale.com/

[Clarke]

Yep, both http://whooiz.com and http://blogarate.com are there!

[Khris Loux]

Lawrence,

Thank you for mentioning JS-Kit as well. It is heartening to read your post - even if we are still in the toiling phase!

When you get a chance stop by www.js-kit.com, we have put out several new widgets and begun the process of cross-linking our services: comments + rate, etc.

Best,

Khris
JS-Kit

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