Back off SEC: Let’s Put the “Risk” of Secondary Markets in Perspective

Back in early 2009, I was concerned about the development of private stock secondary market exchanges. I was concerned that it would affect retention of top executives if people were able to cash out before an IPO too easily. I worried companies wouldn’t be careful enough about who they would allow to own chunks of them. I thought it would be just a band-aid for a larger industry problem of companies not wanting to go public early and often. And in the wake of the financial meltdown, I was concerned about people getting burned who were buying the shares on a loosely regulated market.

We’ve seen shades of all of these, but mostly my fears were allayed once we saw these markets in practice.

Why? Because it was clear these aren’t shadow public markets. They simply made secondary trading that already existed more efficient. Securities laws restrict the trading to wealthy individuals and accredited investors, and the companies have placed even more restrictions on trades, whether it’s not approving certain trades (they have the right of first refusal on transactions) or restricting the trading to very early employees or restricting trades to only former employees. It could have devolved into a late 1990s-like frenzy of buying and selling unregulated shares, as under-pressure VCs seek to lock in returns and employees strive to exit without the IPO wait. But, so far, it hasn’t.

Listen up, because you don’t hear me say this a lot: I underestimated the Valley ecosystem and if the SEC’s inquiries are part of a larger push to regulate these markets, they are too. The companies tapping these secondary markets clearly had the same fears and rather than going for the short term dollars, they have been pretty judicious in how they are using this new tool.

So what about those people with more than one million dollars in liquid assets who are allowed to buy shares? Don’t the rich people deserve disclosure too? At the cost of a company’s right to stay private, I don’t think so. If you want a piece of Facebook, but don’t have the connections to invest as an angel or VC, the skill to get hired there and get employee shares or the patience to wait until it goes public, well, there’s a catch as with anything else in life. You have to do it on the company’s terms. Those terms frequently require you get approved as a buyer first, and do not require the company to give you public-company-like details of its business. If you don’t like those terms, well then, wait for the company to go public.

Let’s put what’s going on in secondary markets in perspective:

  • The largest exchange, SecondMarket, is doing about $400 million in trades a year. That’s a lot. But not compared to how much venture capital is invested in private companies annually, between $15 billion and $20 billion. And it’s nothing compared to how many hundreds of billions of dollars worth of paper value is tied up in illiquid private company stocks. There’s a cap on how much these markets can grow because of all the restrictions on buying and selling. It could one day get out of control, but it’s nowhere close now.
  • Secondary exchanges aren’t the same thing as the Pink Sheets. Put another way, these companies the SEC has been looking into aren’t trading on secondary exchanges because they can’t go public they are trading there because they don’t want to go public yet. There’s a big difference. We may not know much about their P&L sheets, but we know how popular their services are, we know quite a lot about their management teams, we have solid intelligence into their top line revenues and we know that they have professional boards of directors including venture capitalists who have a fiduciary duty to their shareholders. They are covered by press and analysts more closely than many publicly traded companies.
  • That’s because companies like Zynga, Facebook and LinkedIn are already larger than most the Internet and technology companies that have been filing to go public in the last year. Unless someone is engaging in total fraud– in which case, their VCs are in a lot more trouble than secondary buyers would be– it’s hard to imagine these companies are worthless as investments, and it’s hard to imagine the market values would plummet too far once broader markets were able to invest. At $40 billion to $50 billion range, Facebook is valued at about the same amount as Tencent, the largest Web company in China. Given the growth Facebook is seeing even after passing Yahoo as the largest Web site in the world, it’s priced for perfection and hardly a bargain, but the valuation isn’t outrageously out of line either.

  • That means, the question over disclosure is really about how nosebleed the valuation can reasonably get as more people try to squeeze into these stocks and can’t know all the underlying information. But valuations of high-growth companies have never been based solely on facts. They are based on promise, growth projections and the demand to invest. That’s less exaggerated among public-traded companies, but still a big factor.
  • For example, are Yahoo’s non-Asian assets actually worthless right now? Of course not. It’s one of the largest properties on the Web and one of the largest sellers of online advertising in the world. But the market values them at practically nothing, because of a lack of faith in management and the company’s promise and growth going forward. On the flip side, the public had plenty of numbers for publicly-traded Internet companies in the late 1990s, and that didn’t keep valuations grounded. Anyone who thinks more numbers will make Facebook’s valuation fall is fooling themselves about how rational the American investor is.

People keep saying companies like Facebook and Zynga are “essentially” public companies, but that “essentially” is a pretty big qualifier. They are like public companies in that they have methods for tapping investors for large amounts of cash to grow the business and some shareholders have the ability to sell some of their shares.

But they are not like public companies in that the vast majority of the public can not buy their shares. That’s an important distinction where the Securities & Exchange Commission comes in. When the public can own something, the government’s duty is to protect that public citizen. If a company wants the full value of a liquid exchange where people can buy and share stocks at will, and it can use a stock currency or public debt to fuel more growth? Yes, it has to play by all the rules that includes. But when it is just opening up trades to a slightly wider pool of rich industry insiders, any increased burden for disclosure and reporting should be similarly moderate.

At the end of the day these are still private companies, and they deserve to have the benefits of being private. It’s a lot like the debate the industry had back in the early 2000s when the Mercury News led a Freedom of Information crusade that would require any venture firm that accepted public pension fund money to divulge underlying portfolio information. As a reporter, I’d love to see the venture world’s dirty laundry splayed in front of me, but I don’t believe that it is my right. It’s hard to argue it was really paramount to the public’s interest, when no bombshells resulted, these allocations were a tiny part of public endowments and, as it would turn out, the least of those endowments’ problems.

Still, even if the intentions were good, guess what wound up happening? Every top venture firm just kicked out state pension funds as LPs, ultimately hurting the pension-holders. The same thing will happen here if the SEC starts getting too in-everyone’s-face about secondary markets. Companies that are driving the bulk of the deals on secondary markets will just wait to go public or do private deals with firms like Elevation, Andreessen Horowitz, DST and Naspers, leaving everyone else to wait for the IPO.

I still think there are some cultural dangers to secondary exchanges that we haven’t seen the full ramifications of yet. But there is a clear downside for the companies and the Valley ecosystem if these secondary exchanges fall under too much government scrutiny, and I just don’t see that much upside. Consider why these companies take longer to go public in the first place– the very thing that created the market demand for secondary markets: It was well-meaning changes in regulations after the late 1990s that hurt smaller companies’ ability to go public, dampened entrepreneurs’ enthusiasm to do so and ushered in a raft of unintended consequences.

The government has never understood how the Valley’s economic engine works. That’s OK. We like it that way. We don’t ask for bailouts, and there have been few cases of fraud among technology’s venture backed, pre-IPO elite. In fact, the ones that come to mind– like Enron and Mercury Interactive– were perpetrated by publicly-traded  companies. So much for transparency protecting everyone.

As is, the SEC is understaffed and underfunded to adequately police Wall Street. My advice to the SEC: Just stay out of the system until companies start crossing clear lines like having an excess of 500 outside-the-company shareholders. My advice to companies: Keep using the secondary markets judiciously so you don’t become a pet Congressional cause. And my advice to people buying and selling on the secondary markets? Like anything else in this country, buyer beware.

The Lumimask: A Mask That Wakes You As Gently As Mother Nature

There are plenty of clocks that “light” the room slowly, flooding your optic nerves with crisp morning luminosity in order to wake you the way Madre Natura wanted us to. But until now there’s never been a mask that will wake you with the same soothing change in luminosity.

This device, called the Lumimask, is currently on Kickstarter and $50 gets you a pre-order unit while $100 gets you the device and a pair of pajamas (pre-washed). If it doesn’t get funded it doesn’t get made, so this guy is sending out his heartfelt entreaty to you, the Internet, in hopes that someone out there will help him.

More Lawsuits In The Land Of Electronics: Sony Sues LG Over Patent Spat

In the electronics industry, it often seems like everyone is pretty much suing everyone over something, somewhere.

This morning, I caught that Sony Corporation has apparently filed suit against LG Electronics (right before CES, no less).

LG Electronics is the division of the LG conglomerate that markets and distributes the group’s home entertainment devices (TVs, Blu-ray disc players, DVD recorders and whatnot) as well as its mobile phones and home appliances, among other products.

For the record, LG is the world’s third largest handset maker after leader Nokia and Samsung, with an aspiration to become number two by 2012.

I haven’t yet been able to pin down what the lawsuit is about, but from what I can gather, Sony is targeting two LG subsidiaries based in the United States, namely LG Electronics Mobilecomm U.S.A. Inc. and LG Electronics U.S.A. Inc.

For your background: LG Electronics Mobilecomm USA does business as LG Mobile Phones and is the U.S. division that markets the company’s mobile phones, portable wireless-enabled PCs, and related accessories. The company also provides sales and marketing support in North America for parent organization LG Electronics.

From what I can tell at the time of writing, it doesn’t concern a patent infringement suit (see update below), as is usually the case when electronics companies turn to the courts, but I haven’t been able to retrieve what it is about.

The lawsuit was filed on December 28, 2010 in the U.S. District Court for the Central District of California. We’ll update as soon as we get more information.

Update: Benzinga and Bloomberg are reporting that Sony is attempting to block LG’s mobile phones from entering the United States, on the basis that phones such as LG’s the Lotus Elite, Neon, Remarq, Rumor 2 and Xenon use Sony technology.

Sony is also seeking LG to stop selling its Blu-Ray DVD player for the same reason.

Information provided by CrunchBase

Outsourcing Platform Hits 2M Users – Guess Where Most Are Based?

Outsourcing marketplace (formerly known as GetAFreelancer) has hit a milestone: 2 million professionals have registered for its service to date.

That’s up from 1 million in October 2009.

The Sydney, Australia-based startup says the 2 million users (which I seriously doubt are all active) hail from 240 countries. The largest country represented is the United States, with over 21% of users. Second to the U.S. is India, with 19%.

Following the top 3 countries, in order, is the UK, Pakistan, Canada, the Philippines, China, Bangladesh, Romania and Australia. indicates that over 890,000 projects have been posted on the marketplace so far, from projects as simple as designing a website (~$200) or logo design (~$30) to stuff like “Design of a Fully Functional Dune Buggy” ($268) and “Composition of a Rap Song to help Chinese Students Learn English” ($102).

The company says some of its most prolific users are making hundreds of thousands of dollars thanks to its platform.

Earlier this year, acquired virtual content marketplace And just last week, they purchased LimeExchange, adding another 80,000 freelancers from around the world to its userbase.

Information provided by CrunchBase

eBay’s Gross Mobile Sales For The Holiday Season Up 166 Percent To $230 Million

eBay’s mobile sales continued to grow during the holiday shopping season, according to a release issued by the company today. eBay is reporting that gross merchandise value (also known as GMV, the total sales dollar value for merchandise sold through eBay) was up 166 percent to $230 million from Nov. 25 to Dec. 25 from the same period last year.

In the U.S., sales from eBay’s mobile apps grew 134 percent over the same period last year, generating nearly $100 million in GMV.

In terms of yearly stats, eBay says that designer handbags, diamond jewelry and Rolex watches topped this year’s most expensive holiday purchases.

In the U.S., the top five categories ranked by the number of items sold through eBay’s mobile apps for the year were: clothing shoes & accessories; cell phones & PDAs; collectibles; jewelry & watches; and toys & hobbies.

In terms of gadgets, the consumer electronics category saw its peak in mobile sales after the release of the iPad and iPhone 4. In the U.S., cars & trucks ranked in the top five categories in every state except Hawaii, and auto parts was a top five category in all 50 states. Other categories that were shopped through eBay mobile in nearly every state were clothing & accessories (49 states) and sporting goods (47 states).

It’s no secret that eBay has been making a big push to launch and promote its new mobile offerings in time for the holiday season. And as more consumers look to their mobile phones as a way to search and shop for products, eBay is gaining more traffic to its apps.

eBay’s primary iPhone app has seen over 13 million downloads, and its suite of apps have been downloaded 30 million times.

Information provided by CrunchBase

Flight And Hotel Price Tracking Startup Yapta Is Raising A $6.4 Million Round

Yapta, which helps travelers book airline tickets (and hotel rooms) as cheaply as possible, has raised close to $3.5 million of a $6.4 million financing round, an SEC filing reveals.

According to the information we’ve gathered through CrunchBase, the round will bring the company’s total amount of funding to $14.4 million.

Yapta lets travelers track fares from most of the major domestic and international airlines, allowing users to select flights to follow, and then be alerted when the price fluctuates. If the price declines after you purchase your ticket, Yapta will help you get a refund or credit from airlines that have lowest guaranteed fare policies.

The service was initially launched as a browser add-on in May 2007, morphed into a full-fledged website a year later and started tracking hotel prices in addition to flight fares in 2009.

Yapta has previously raised funding from Bay Partners, First Round Capital, Swiftsure Capital, and Voyager Capital, among others.

Information provided by CrunchBase

Skype Reveals A Bug In Its Windows Client Was What Crashed Its System

After suffering a massive outage last week, Skype CIO Lars Rabbe has now detailed what went wrong.

One of the root causes? A bug in the Skype for Windows client (version 5.0.0152).

Rabbe kicks off by explaining that a cluster of support servers responsible for offline instant messaging became overheated on Wednesday, December 22.

A number of Skype clients subsequently started receiving delayed responses from said overloaded servers, which weren’t properly processed by the Windows client in question. This ultimately caused the affected version to malfunction.

Initially, users of Skype’s newer and older Windows software, as well as those using the service on Mac, iPhone and their television sets, were unaffected.

Nevertheless, the whole system collapsed as the faulty version of the Windows client,, is by far the most popular – Rabbe says 50% of all Skype users globally were running it, and the crashes caused approximately 40% of those clients to fail.

The clients included roughly a third of all publicly available supernodes, which also failed as a result of this issue.

From the blog post:

A supernode is important to the P2P network because it takes on additional responsibilities compared to regular nodes, acting like a directory, supporting other Skype clients and establishing connections between them by creating local clusters of several hundred peer nodes per each supernode.

Once a supernode has failed, even when restarted, it takes some time to become available as a resource to the P2P network again. As a result, the P2P network was left with 25–30% fewer supernodes than normal. This caused a disproportionate load on the remaining available supernodes.

Rabbe goes on to explain a lot of people who experienced crashing Windows clients started rebooting the software, which caused a huge increase in the load on Skype’s P2P cloud network. He adds that traffic to the supernodes was about 100 times what would normally be expected at the time of day the failure occurred.

A perfect storm in the P2P clouds, so to speak.

To learn how Skype supported the recovery of its supernode network, and what they’ll be doing to prevent this from happening again, I suggest you go read the full blog post.

And major kudos to the company for being so prolific in explaining what happened.

Information provided by CrunchBase

SCVNGR To Hover Over Times Square This New Year’s Eve

In a few nights, an estimated 1 million people are going to pack into New York’s Times Square for New Year’s Eve (brrr). And amidst all of the confetti, snow, and alcohol, they’re going to see a whole lot of ads, which is what Times Square does best. One of them represents a win for location-based mobile game SCVNGR: the service will be prominently featured on American Eagle’s Times Square billboard starting today and running through the new year.

To mark the occasion, American Eagle will be offering New Years-themed challenges on SCVNGR (for example, entering what your resolution is for 2011). For each challenge that’s completed, American Eagle will be donating $5 to Big Brothers Big Sisters of America — and SCVNGR will be matching that donation. As people stand outside in the frigid cold waiting for the ball to drop, you can bet a good number of them are going to check out the app.

Getting a feeling of Déjà vu? That’s probably because Foursquare actually had a very prominent placement on the same Times Square billboard back in August, again as an American Eagle promotion.

Information provided by CrunchBase

Stealthy Mobile Games Startup Wild Needle Is Raising $3 Million In Series A Funding

An interesting startup called Wild Needle that will be entering the social mobile gaming space soon, is raising $3 million in funding, $2.5 million of which it has already secured, according to this SEC filing.

Self-proclaimed to be in “super sneaky stealth mode”, the company, which was founded earlier this year and is based in Mountain View, boasts that its mission is to “stretch the boundaries of the mobile game experience farther than it’s ever gone before”.

From the Wild Needle website:

We’re working on some great ideas for the next generation of social games for mobile devices. After all, a mobile device is so much more than a portable game player.

What if mobile games were thoughtful, immersive, and filled with unexpected delight? What if they made you laugh out loud?

Wild Needle reveals little about its plans on how to do that, let alone the team that’s putting things together over there. Its website only mention that the team consists of a small group of entrepreneurs with experience at companies like Playdom, Microsoft, PayPal, and Adify.

The SEC filing turns up three names: Playdom co-founder and chairman Rick Thompson is listed as an executive, as is (former?) VP of Platform Solutions for Adify, Heidi Carson.

Listed as a director is Robert T. Coneybeer, co-founder of VC firm Shasta Ventures, so we’re assuming they led the financing round, if they aren’t the sole investor to date.

We’ll be watching Wild Needle, and possibly waste lots of time playing their games, in 2011.

Energy Literacy Platform: Track And Turn Off Household Appliances With Your Phone

Using the web to track power consumption at home is something several companies are working on at the moment (including Google). Tokyo-based startup Sassor is developing a solution that offers two big selling points: their so-called Energy Literacy Platform (ELP) [English link] lets you track each household appliance individually and makes it possible to turn these devices off remotely, for example by pushing a button on your smartphone.

The Energy Literacy Platform is based on the idea that by empowering consumers with a tool that informs them how much energy their appliances really use, they will start saving energy. The platform consists of three parts:

  • ELP modules you place between your various power outlets and home appliances.
  • The ELP receiver that harvests power consumption data to the server.
  • A website or smartphone app that lets you track how much energy each appliance uses and even allows you to turn devices off remotely if needed.

The modules change their color over time, from green to yellow and finally to red, as you approach the energy limit you previously set on the ELP website or app (see below).

On the web, your energy consumption is visualized in more detail, helping you to track the exact amount of energy (and money) consumed by each device in real-time. What’s cool is that you can turn off things while on-the-go through the ELP website or the smartphone app, for example if you forgot to turn off the lights in your house.

The Energy Literacy Platform Project has come out of Japanese seed acceleration program Open Network Lab (which we covered extensively here).  Maker Sassor, run by a group of students from Keio University’s Graduate School of Media Design in Tokyo, expects to launch the platform in summer next year.

Information provided by CrunchBase

Doing Words: If Spotify Is Now A Verb, What Else Should Be?

As the end of each year looms, there’s a fun tradition amongst news organisations of publishing lists of “new words” coined during the preceding twelve months. The only slight problem with the lists is that they’re largely nonsense, comprised mostly of phrases made up by lazy journalists on a deadline.

Some lists, though, are deserving of slightly greater consideration – like, for example, this one compiled by “Sprakradet” – The Language Council of Sweden. I mean, “Sprakradet” – that sounds like it might actually be a real thing.

Or maybe not: according to the esteemed Council, 2010 was the year in which “Spotify” became an official Swedish verb. Unfortunately the verb’s definition is also in Swedish so I can’t actually read it, but I assume it must be something along the lines of…

Spotify (v): To repeatedly and embarrassingly fail to launch in the US.

The list also got me wondering which other tech-centric verbs might – or at least should – have been coined this year. Verbs like…

Tumbl (v): To suffer increasing periods of downtime at the same time as the media anoints you the “next big thing” (Replaces last year’s: to Twitter)

Facebook (v): To continue to grow in valuation no matter how many (privacy, ad-scam or Aaron Sorkin movie) scandals surround you. (See also: to sell your soul to the devil)

Quora (v): To build a “highly praised” (and “valuable”) service despite the fact that only twelve people actually use it, just because those twelve people happen to be Silicon Valley investors and reporters. (For antonym see “to Yahoo Answers”)

Instagram (v): To take a shitty photograph, and make it shittier.

Yahoo! (v): To somehow appear even more tragic through the use of optimistic punctuation. (See also: Bebo! Digg! A!O!L!)

TechCrunch (v): To sell your company to a corporation you would criticise others for selling to, at the kind of (reported) valuation that you’d criticise others for accepting, at a time you’d… etc.

More suggestions? Make them in the comments. Best ones win TechCrunch t-shirts.

Happy New Year!

Seeing Interactive And Weebly Partner, Offer White-Label Websites To Bolster Small Biz SEO

YCombinator-backed Seeing Interactive, which helps newspapers build and sell space in online ad directories and YC-backed Weebly, the service that lets you create your own drag and drop websites, have partnered up to give local newspapers even more options when selling local advertising to small and medium sized businesses.

Seeing Interactive, which raised $1 million in June, used to direct businesses to Weebly when they needed to build websites to supplement Seeing Interactive’s SEO-optimized Marketplace directory pages. Seeing Interactive has now integrated Weebly into its backend and as of January 1st will allow its newspaper clients to offer advertisers the ability to manage their website and directory listings from the same dashboard. Newspapers can now sell the two services as a package, or separately.

“Many of our end users–newspaper’s clients–have never used the internet past e-mail and Weebly makes it easy for them to have a premium website. We’re thrilled to be able to integrate with Weebly,” says CEO Lloyd Armbrust.

Seeing Interactive has already done a test launch with several newspapers including the Norfolk Daily News, The Daily American in Somerset, (the confusingly named) York News Times and Belo Corp’s The Press-Enterprise. You can see an example of a Weebly/Seeing Interactive site here and the power of the SI 81-point SEO audit and social media integration here.

According to Armbrust, the new Weebly white-label website integration has made The Press Enterprise an extra $60,000 in the first three weeks of trial and Armbrust projects revenue of over $500,000 for the entire year. Here’s to saving newspapers, one search ranking at a time.

Over A Year After Its Acquisition, Is Mint Still Fresh?

Here at TechCrunch, we’ve long been fans of personal finance site Mint, which won our first TechCrunch40 conference in 2007 and was acquired two years later by Intuit for an impressive $170 million.

But things may not be going gangbusters at the company these days. We’ve learned that in the next month, three key employees from the original, pre-acquisition team will be leaving, including Director of Marketing Stewart Langille, lead designer Justin Maxwell, and head software engineer Daryl Puryear. One Mint insider estimated that around 40% or more of the pre-acquisition team has left since Intuit bought the company in September 2009, some of whom have left substantial amounts of unvested stock on the table. Most of the executive team remains, but many employees have gone on to work at or launch their own startups.

Granted, it isn’t unusual for personnel to leave after an acquisition. Startups thrive on being nimble, and the umbrella of a large company and a new corporate infrastructure can slow things down. We’ve heard from one insider that Intuit has handled the acquisition quite well in terms of giving the company resources. The issue, it seems, has been in the execution — Mint just hasn’t pushed out many projects in the last year.

The big ones were an Android application, a launch in Canada, and a ‘Goals’ feature that helps you budget your income so that you can save up for that vacation or big-screen TV. Those aren’t bad features, mind you, but they don’t seem too groundbreaking. “Momentum has slowed down,” is how one insider put it.

It seems that some Mint users aren’t pleased with the way things are going, either. As a litmus test Mint polled its Facebook audience in November to ask what they thought of the post-acquisition Mint. Most responses have been negative, with numerous comments complaining of bugs and slow sync times between a user’s financial institutions and their Mint accounts.

Reached for comment, a company spokesperson said that there is “definetly no glut of departures”, explaining that the team has grown much more than it’s shrunk, and attributing any “key shifts” to long-time Mint employees taking advantage of the hot job market. The spokesperson added that Mint has been doing a lot of work behind the scenes to support international growth, and will be increasing its presence by adding two new countries next year. The company also plans to launch an iPad application and other mobile apps.

Information provided by CrunchBase

Q: What Does Quora Mean For The Future Of Blogging? A: Business As Usual

As many of you have noticed, we (and by “we”, I mainly mean “me”) have been using Quora a lot as a source of inspiration for story ideas. Some people seem to think this is a great idea. Others seem to think it’s the end of TechCrunch, blogging, and the world — perhaps not in that exact order. But here’s what it really is: business as usual.

One reader, Elias Bizannes, tweeted the following yesterday, “Blogging 3.0 according to @parislemon 1) Follow the founders of Quora 2) Spend all day on Quora 3) Rehash voted-up Quora posts on TechCrunch“. My response to this was as follows, “@EliasBiz so was blogging 2.0 doing the same thing on twitter? and blogging 1.0 doing the same thing on blogs?

My point, again, is that Quora is simply a new medium for what’s been going on since the beginning of blogging. And, to an extent, you could argue since the beginning of writing in general. That is, there needs to be a nugget of information that sparks a story. For the past 10+ years, many people have relied on other blog posts for this. For the past three years or so, many people have used Twitter for this. And now people are starting to use Quora for this purpose.

This process usually starts with blogs (like TechCrunch) and then eventually moves to the mainstream media. The same thing will happen here. In a year, CNN will be reporting information coming from Quora. Why? Because it’s a great source of information.

On it, you’ll find people like high-profile executives Steve Case and Reed Hastings candidly answering questions about the companies they are (or were) involved with. You’ll also find former employees of companies giving insightful nuggets of information about those companies. It’s really no different than if they each blogged about these things. But they aren’t doing that, likely because it’s the question itself that sparks them to answer. And the fact that all of these answers are connected in a centralized, filtered location makes it much more powerful.

That Quora answers can be lengthy (unlike tweets, which are limited to 140 characters) has brought up some unease as well. Aggregators, like Techmeme, have started linking directly to threads there. Other sites, such as Silicon Alley Insider, have started republishing entire Quora answers. But again, that’s no different from the norm. That site also regularly republishes full blog posts found elsewhere.

We don’t do that type of full republishing, not because we think it’s bad, it’s just not what we do. Instead, when an interesting Quora thread pops onto my radar, I like to think it over and write it up in a way that I would any other story. That is to say, I like to inject my own words and opinions and expand on the thought.

The other day, Robert Scoble wrote a post wondering if Quora was the biggest blogging innovation in 10 years? I still would definitely give the edge to tools like WordPress and Blogger, and then to Twitter (which serves as both a source of information and a means to distribute content), but Quora, at least as it stands right now, is the next step in the evolution.

It’s not just that it’s Yahoo Answers reborn, it’s that it’s Yahoo Answer done right. It utilizes several things that other social services have implemented over the years and ties them all together in a way the surfaces excellent information.

There’s always been a concern that as Quora expands its user base, it will get less useful, but all indications are that it has been expanding rapidly in recent weeks — and guess what? It’s actually getting better.

In other words, expect more posts based on information found on Quora, not less. And expect that trend to spread across the web. Just like it did with Twitter. Just like it did with blogs. It’s all about the information, not the medium.

[image: Disney]

Information provided by CrunchBase