Decade-Old StumbleUpon Finds Profits in the Mobile Era

Photograph by StumbleUpon via YouTube

StumbleUpon for Windows 8

Since StumbleUpon debuted more than a decade ago, the online bookmarking service has never had its breakout Facebook or Pinterest moment. The startup quietly chugged along with a loyal fan base and steady sales trickle.

StumbleUpon is now profitable and expects to grow revenue as much as 33 percent to $40 million this year, according to the company. More than 20 percent of sales this year are projected to come from applications for smartphones and tablets, Chief Executive Officer Mark Bartels said in an interview.

The service lets users press a button to channel surf the Web, and an advertisement — a game, a video clip, a mobile website — is displayed to users about one out of every 20 times they click the Stumble button.

The company’s sales figures are a drop in the bucket compared with even younger Internet upstarts like Facebook. But StumbleUpon seems to be adapting well to the mobile era, which is poised to shake up the industry. The service is popular on portable devices because typing on a touchscreen can be cumbersome, said Garrett Camp, StumbleUpon’s co-founder and chairman.

“Stumble has been trying to figure out: How do you make it easy to browse, rather than type, what you’re looking for?” Camp said. “The more effective your recommendations are without textual input, the better experience you can deliver on a small screen, or on a wearable or set-top box.”

Many users can appreciate StumbleUpon’s simplicity and eventually get hooked because the recommendations improve the more you use it. Accessing an interesting article or site can be a good way to kill a few minutes while waiting in line for coffee. Mobile makes up nearly 40 percent of usage, up from about 20 percent last year.

StumbleUpon’s 100,000 advertisers have grown to like the app, too. Comedy Central pays as much $75,000 for a few days’ worth of ads on StumbleUpon. The Viacom-owned television network’s campaigns include video clips promoting its “Drunk History” show and a Web game where users spar with a digital version of actor James Franco.

“We can use StumbleUpon to help users discover new content or to remind them that content they love from us is out there,” said Don Steele, vice president of digital marketing and fan engagement at Comedy Central.

Founded in 2001, StumbleUpon’s mobile resurgence comes after a tumultuous decade. The startup was acquired by EBay, spun out, and then failed in its online-video and search efforts. Camp stepped down as CEO last year to spend more time working on Uber, the taxi-booking service he helped start, and a similar app for chartering private jets.

Camp’s departure led to the promotion of Bartels, a onetime manager at consulting firm Deloitte & Touche who joined StumbleUpon as head of finance in 2008. Bartels cut staff earlier this year to 75, from 120. StumbleUpon is now hiring as it seeks to add engineers experienced in mobile development and to expand internationally.

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