Docstoc

• Y Combinator startup Scribd has raised its 4th round of financing – $9 million from Charles River Ventures, Redpoint Ventures and Kinsey Hills Group. This puts their total funding at around $12.8 million in an attempt to become the YouTube for documents. 
• Launched one year after Scribd, Los Angeles based, DocStoc jumped onto the scene to capture some of the market. DocStoc has raised a total of $4 million and has executed well although still trails Scribd’s traffic. Both companies lack many direct hits and both are heavily reliant on search engines, which happen to love giving embeddable documents a high page rank. 
• The battle next year will be to see who can become profitable. Both companies are seeing a lot of visitors, but converting dollars on those people are difficult when the only form of revenue is from google text ads. Although much of the content found on either site (such with YouTube) is unmonetizable, there is a considerable amount that is. Legal, tutorial, career, health & fitness, etc. documents all bring in people to the site that are looking for something specific and the document they eventually find was probably submitted by someone who is able to offer that service. Example: Someone looking for an NDA may be interested in talking with a lawyer, and the document they find may have have been uploaded by a local lawyer.
• Both companies essentially would need to re-format the way their content in these categories are displayed to users, returning documents submitted by local businesses first. This would help convert leads for businesses as well as provide them with incentive to upload more quality documents to the site. This method would let DocStoc and Scribd monetize effectively by having sponsored documents as well as having users submit their email address to embed or download a document. You can charge companies per click on sponsored documents and sell leads to businesses looking for information about users downloading documents in areas relevant to their service offering. Moreover, by driving revenue from the content, both companies can begin to engage in paid search marketing for the areas that their SEO is lacking. Example: If you are searching for an NDA, places like LegalZoom dominate the space because they are a sponsored search result and can measure conversions. DocStoc or Scribd couldn’t make sense of spending search dollars without any way to bring the dollars back in. 
• It will be interesting to see who wins this game. I have to assume that one of the companies will be crowned the winner in the end, since both operations require a decent amount of overhead and dollars will need to be brought in. It will be a battle, since both organizations have incredibly talented management, such as Jason Nazar (CEO of DocStoc). 

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