How Does Quora Make Money | Business Model Explained
Quora will soon release its IPO, and the famous Q&A website valuation is $2 Billion, and it is coming up with an IPO of $4 billion valuation! Investing with such a hefty valuation requires some knowledge about the company. Here in this article, we will explain Quora’s business model and answer the question of how does Quora make money.
Initially, Quora didn’t have a revenue model; it depended on angel investors. But Quora’s business strategy made them an investor’s favorite; they were expecting future profits from Quora.
Until 2016, Quora was totally dependent on funding. After 2016, they adopted an Ad and Subscription revenue model, and in the first year, they earned $20 Million.
At the time of its launch, Quora was valued at $86 million; cut to 2022, its valuation has increased 46x to $4 Billion.
You might be thinking about why its valuation increased 46x, what is their revenue model, and how does Quora make money.
Let’s find out in this article…
What is Quora?
Quora is a website on which many people can discuss relevant topics through questions and answers. Quora has 400,000+ spaces and topics on which people communicate as a community.
It is very different from other social media platforms, as many people who answer on Quora are often founders, CEOs, managers, or experts in their field.
Quora’s founder Adam has said that he wants Quora as a platform where anyone can get an answer to what they are looking for, a timeless platform.
Let’s see how does Quora make money.
How Does Quora Make Money?
Quora has three primary sources of income – advertising, subscription, and funding. Quora helps businesses run an ad campaign on their platform and charge money from users in the form of subscriptions that don’t want to see ads on their Quora page.
1. Advertising
Quora has 300 million unique monthly visitors, and on average, Quora has 2.1 million visitors on its site every day. For comparison, apple.com has 2.76 million visitors per day.
Quora’s reach is also in many big markets, like India, the USA, the UK, Canada & Australia. Around ~40% of users are from India, and 20% are from the US.
This makes Quora one of the favorite platforms for advertisers to run their marketing campaigns. Plus, Quora runs contextual ads, increasing the chance of users buying the service or product running on ads.
How does Quora make money from advertising –
- Quora runs marketing campaigns for advertisers on their page or questions, which has many views.
- One can start a marketing campaign on Quora for $25 or CPC for $0.01 per click.
- To run Ads on Quora, you need a Quora business account.
- Quora runs contextual ads, which help businesses to sell products to their target audience.
This is the business model in which big companies like Google, Facebook, Instagram, etc., run. Advertising is a significant part of their revenue.
2. Subscription
Courtesy: Quora Plus
Quora also offers a subscription to its users, in which they can pay monthly or annually for some exclusive services. People usually subscribe to these subscriptions to get exclusive benefits, which a normal or free user isn’t getting.
Currently, Quora offers two subscriptions –
- Quora Plus Subscription – $6.99/month or $3.99/Month (Annual Plan)
- Quora Space Subscription – 40% of the revenue
Quora Plus subscription is a premium subscription for Quora users who don’t want ads on their platform plus, they can also access premium content on Quora.
Quora charge $6.99/month for giving such benefits; however, if you billed annually, you’d be charged $3.99/month, and the total cost will be $47.88 for a year.
Another subscription that Quora offers is a Quora space subscription. This is the subscription that is specially designed for Quora Space owners. Any user can create a space on Quora and charge its user for a subscription.
Quora space owners can put free and paid content both on their space. But if you offer paid subscriptions to your Quora Space Subscribers, and if you are generating revenue, you have to give 40% of that revenue to Quora.
For example, if a Quora space owner earns $5,000 as revenue, he will only get $3,000, and the rest of $2,000 will be deducted from Quora.
This’s how Quora make money from Quora space owners.
This business model is called the subscription model, on which companies like Netflix and Amazon Prime run.
Related: How to Make Money from Quora?
3. Funding
Quora didn’t discover its revenue model until 2016, and the company depends on investors’ funds. Later on, as they adopted a revenue model, they were still unable to meet good revenue to justify their valuation.
That’s Quora is still doing funding rounds to raise funds; recently, they raised $85 million at a valuation of $1.8 billion. Soon, they will launch their IPO with a valuation of $4 billion.
Although funding can’t be in the revenue model, but that’s how they work; until the company becomes profitable, they have to depend on funding. Funding will stick to the company unless they become entirely profitable with its operation.
So these were the three ways of how does Quora make money
Quora’s Timeline (2003 – 2022)
Quora was founded in 2009 by Adam D’Angelo (CEO) and Charlie Cheever (Co-founder); its headquarters is in Mountain View, California. Quora first became public in 2010; initially, they weren’t getting many visitors, but the site became famous in 2014.
Quora’s Timeline:
- 2003 – 06: After graduating from Harvard in 2003, Cheever (Co-founder of Quora) joined Amazon, and later in 2006, he was recruited by Facebook as an engineering manager. At Facebook, Cheever met Adam D’ Angelo (Co-founder of Quora); in 2006, Adam was promoted to Facebook as Facebook’s CTO.
Adam is bored working at Facebook, as he wasn’t much interested in the platform becoming more significant day by day. At that time, there were websites similar to future Quora, like Yahoo Answers. But Adam saw a big problem in Yahoo Answers; there was a lot of spam on the platform, as Yahoo wasn’t verifying users.
- 2009: Eventually, Adam departed from Facebook and hired Cheever to work in Quora. The duo started working on Quora in 2009, and they both work passionately to create a knowledge base of genuine, high-quality answers.
- 2010: In January 2010, Quora was available for testing to selected groups. As Adam and Cheever were both reputed personalities, many Silicon Valley powerhouses contributed to the platform by providing high-quality answers.
Quora was featured in many prominent publications and has created much media buzz.
- June 2010: Soon after three months of release, Quora got its first funding of $11 million at an $83 million valuation. Later in June 2010, Quora became available to the general public, meaning anyone could now access the site.
Over the years, Quora has done well; its engineers added new features almost every week. As a result, just after two years of its launch, its valuation has increased to $400 million.
- 2014 – 16: The co-founder of Quora, Cheever, stepped back from regular operations and moved to an advisory role. After that, Investors raised questions about the revenue of Quora or its revenue model. Therefore, In 2016, Quora first adopted the Ad revenue model, and it was the first time Ads ran on the platform.
- 2017 – 20: Quora got its unicorn status after raising $85 million at a valuation of $1.8 billion. In the last few years, Quora has introduced many new features and has available its app and website for many languages. It recently achieved a remarkable record of 300 million visitors per month.
- 2021 – 22: Yahoo Answers got shut down; on the other hand, Quora will soon release its IPO in 2022. However, the date isn’t confirmed.
Today, Quora’s valuation is $4 billion, and it employs 300+ people; Quora is operating fully remotely, and its employees are working across the globe.
Quora’s Leading Competitors
Quora started early; however, it is not the only question-answer website. There are several Q&A websites on the internet. During the early phase of the Internet, Yahoo Answers was quite a successful website but got shut down in 2021.
However, Quora has successfully outcast such competitions.
Today as well, Quora has many competitors; we will be mentioning some of their leading competitors:
- Reddit: Over 50 million daily active users worldwide (source)
- Chegg: 54 Million+ monthly visitors (source)
- Brainly: 31 Million+ monthly visitors (source)
- ResearchGate: Over 119 Million monthly visitors (source)
Apart from them, any website that can be a platform for question and answer can compete with Quora.
Quora Revenue, Valuation & Expenses
Revenue
Quora is a private company, so they haven’t shared its revenues publicly. They last shared their revenue information in 2018, which was $20 million. Since then, no newer figures have been shared.
According to Crunchbase, Quora has raised $226 million from its four funding rounds. Many notable investors have invested in Quora –
- Benchmark
- Tiger Global Management
- Founders Fund
- SV Angel
- Matrix Partner and many others
Valuation
- Quora raised its first funding in 2008, where it was valued at $86 million.
- In the next four years, Quora started getting views, and the website became famous; later, it got valued at $900 million!
- In 2018, Quora reported its first revenue, which was $20 million; the next year, it was valued at $2 Billion.
- Numbers got exciting when Quora’s valuation was recently doubled in 2018 to $4 billion in 2022!
Expenses
Quora has three major sources of expenses, although they don’t have any major expenses since they have been conducting big operations.
- Employment – Quora directly employs 300+ people remotely; since they are working remotely, Quora doesn’t need an office space and no maintenance cost. They are responsible for remuneration to their employees.
- Cost of Running App/Website: It isn’t a major cost; an app or website requires various things to function properly. Websites like Quora depend solely on traffic and need technology to manage the traffic. This cost includes the cost of servers, payment services, data storing, hosting, etc.
- Cyber Security: This is the cost of security of the website and servers to keep the website secure from data leaks and hackers.
It is easy for Quora to become profitable, as they spend efficiently.
Quora’s SEO & Upcoming Challenges
SEO stands for search engine optimization, which helps websites rank better in search engines like Google. An optimized SEO helps a website to rank higher and get more traffic. In terms of Quora, its SEO is amazing compared to its competition.
- Quora’s Domain Authority is 93 (Domain Authority above 90 is excellent.)
- It ranks on 10 crore+ organic keywords (equivalent to 100 million+ keywords.)
- Many times, Quora answers rank on high-traffic keywords.
Quora SEO is great when a user searches for the experience or a human answer. In such keywords, Quora’s answer easily ranks. Let’s see the result of – what is your experience in Disneyland.
Google Result –
You can see Quora ranked first on this keyword, and the second is bartleby.com; this was an experience-related keyword, and a user is looking for real-life experience.
Upcoming Challenges for Quora
There are many challenges in front of Quora –
- Decreasing Attention Span
- Artificial Intelligence (AI)
- Hard to Monetize
1. Decreasing Attention Span: With TikTok and other short content platforms, grabbing user attention via text is difficult. Many studies observe that people’s attention span is decreasing. Platforms like Quora will find it hard to survive as their content requires reading the answer; reading requires more attention than passively watching short content.
2. Artificial Intelligence: Bots like ChatGPT give an instant answers with easy summaries without users browsing the internet. As this technology develops, it will become more convenient to be used, and it is challenging for Quora and many other websites.
3. Hard to Monetize: Quora is hard to monetize than Instagram, YouTube, TikTok, etc. Many Quora writers complain that they aren’t getting monetization or followers even after writing for months. That’s content creators might choose other social media platforms over Quora.
So, these are the three challenges Quora needs to focus on and find a satisfying solution before its traffic drops.
Frequently Asked Question
1. Should I Invest in Quora?
Quora has yet to release its IPO, so they haven’t made much of the information public. The last time its revenue was public was in 2018, which was $20 million. Their revenue doesn’t justify their valuation; however, their recent revenue is yet to release.
A company should be profitable enough for investing; if a business isn’t profitable, its valuation will soon decrease, and no business can run entirely on funding.
2. How to make money from Quora?
There are three ways a user can make money from Quora –
1. Quora partner program
2. Affiliate marketing on Quora
3. Quora space subscription program
Quora partner program: If you are a Quora writer and write actively on Quora, then you can get an invitation from Quora to join the partner program. If you join this program, you can get paid for your work if it gets viral.
Affiliate marketing: You can do affiliate marketing on Quora, as Quora is a trusted website. Google ranks well. If you don’t have a website, you can use Quora to affiliate products or services.
Quora space subscription: You can create a space on Quora where you can put the content yourself and charge users to access that space. You can also set up a free subscription or charge people for viewing your content.
3. Is Quora Safe?
Quora is an open site; anyone can make an account on Quora; therefore, you should not post any sensitive information on Quora.
Just like any other platform, information can be leaked on Quora; also, you should only share the information you are comfortable with.
Some feature of Quora that makes it a safe site –
1. You can answer the questions on Quora by being ‘anonymous’ without displaying your name.
2. It isn’t mandatory to put a profile picture on Quora.
3. You just need your email address to make a Quora account.
4. How did Quora become famous?
Quora isn’t much famous compared to other social media sites. However, most of the visitors Quora gets are from India. Quora became famous in India in 2014 and became popular among NEET, JEE Aspirants, IITians, and BITS Pilani students (Colleges & Competitive exams aspirants of India.)
Quora’s 40% of visitors are from India.
Related – Moosend Review: How to Run Smart Email Marketing Campaigns?
Final Thoughts: How Does Quora Make Money
Quora is a good company with a great vision but has faced hard times making revenue. Quora depended on funding in the initial stage and later adopted a revenue model. And their revenue model cannot justify so high a valuation.
The concept of the website is excellent, as many people are looking for personalized answers.
Search engines like Google cannot give, as their algorithms rank on website authority, not on a person’s experience and quality of answers. Many people like reading first-hand experience rather than reading tips or methods.
In the future, Quora will attract more visitors as they have high-quality authors, businessmen, consultants, etc.
But for now, Quora needs to revise its revenue model to be profitable.
That’s it for this article; thanks for reading!
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