With over 3.5 million registered users (up from 600,000 two years ago), StumbleUpon has left the techie niche and has become mainstream. But unlike Google which makes its billions from helping you find what you’re looking for, StumbleUpon helps you discover content that you may not be looking for but will probably find interesting.
How Google Works
If you look at Google, it seems that the site is laid out so that you can visit the search page, type in a query, and click the result that best fits your need. So in most cases (and if Google works according to plan), you don’t even spend a whole minute on Google before leaving for the site you were looking for. In a way, there is a conflict of interest at Google: the better the search engine, the quicker you find what you’re looking for, and the less time (per query) you actually spend on Google.
How StumbleUpon Works
Unlike at Google, StumbleUpon doesn’t help you find something specific that you may be looking for, rather it helps you discover new content (often content you didn’t know existed) based on your general preferences. Furthermore, the more you use the StumbleUpon toolbar, the better it understands your interests and what specifically appeals to you within your interests, and the better the pages the toolbar sends you. In effect, the toolbar gives you a reason to use it frequently because that will make it improve, and over time, you want to use it more frequently because you enjoy the content you discover.
To be fair, Google also has similar functionality with Google Web History, but most people I know aren’t using that because of the privacy issues involved. Web history aims to deliver more relevant results by recording every single website you visit and every single query you conduct (through Google). StumbleUpon, on the other hand, works based on the category and tag surfing/submitting habits of you and your friends.
The Google Business Model
A majority of Google’s earnings are dependent on a single source: revenue from advertisements. By serving up ads next to search queries, and making sure that the ads are contextually relevant, Google hopes that if the ad is relevant enough, you will click on the ads to visit the featured service/content instead. One issue with this is that many tech-savvy people are either simply blind to these ads or block them using Ad-Block Plus (not to imply that this is making a significant dent in Google’s pocket).
The StumbleUpon Business Model
Just like Google, StumbleUpon also relies on a revenue model that relies on contextually advertising other people’s content next to freely served content. However, advertisers can choose the exact demographic that their content appeals to and based on your Stumbling habits (i.e. if the content is something that you would even normally be interested in), the advertiser’s content will be served to you along with your regular Stumbling. Unlike Google, where ads are contextualized to a single query, content marketed through StumbleUpon takes into account your general Stumbling history (i.e. what categories and tags you like to Stumble and so on).
The model is better for advertisers as well as the users. For advertisers, it is good because there is no action required on the part of the users (i.e. they don’t have to specifically click on an ad). The advertised pages are served up just as other content, and in fact, StumbleUpon recommends that you use regular content pages to market yourself rather than ad-pages. As for users, this model is good because the more you use StumbleUpon, the better the toolbar understands you and will serve you relevant, advertised content pages. In fact, even though there is an option to pay and opt-out of advertised content, I have yet to encounter content that I thought was blatantly spammy/advertised and not relevant.
Ultimately, the people behind StumbleUpon have managed to create a service that is incredibly sticky (in terms of people enjoy using it daily and for hours) and a great marketing platform at the same time. The service avoids the pitfalls of other services like Digg by avoiding ads and directly marketing content to the users. The fact that you can even rate the marketed content makes sure that this will also improve over time.