'Ask and Answer' Gains Traction Online

Little-noticed Answers Corp. (ANSW - commentary - Cramer's Take) reported September quarter results this morning that were strong enough to send shares up more than 8% in a down market. The real story wasn't that revenue grew 61% year over year and 19% sequentially, or that the company generated a small adjusted EBITDA profit.

The real story is the growth of its social question-and-answer Web site Wiki.Answers.com, which grew revenue 31% sequentially (although its revenue is still modest at $1.96 million in the quarter).

Companies are increasingly trying to build models around the "Ask and Answer" needs of many queries on the Web.

The beauty of a model like Wiki.Answers is that the company levers its community base to manage, categorize and answer questions posted to the site. Fully 1.5 million users are working on more than 6 million questions, and the "wiki" format allows for the best of each user contribution to be retained in the answer.

Some might point to Wiki.Answers as a derivative play on the successful site Wikipedia.org, and this would be true to a point. Wikipedia is limited, however, by the finite number of relevant topics that exist to be written on, while the number of questions that can be posted is virtually limitless.

The transactional nature of questions on the Web has allowed for Answers Corp. to monetize its Wiki.Answers traffic with success -- certainly more success than seen in other community Web sites.

If I am looking into "How do I pave a driveway?" there is a much more solid chance I am willing to transact than a user browsing through photos on Flickr or MySpace, as an example.

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At time of publication, Gillis had no positions in the stocks mentioned, although holdings can change at any time.

Colin Gillis is a managing partner at Click Capital -- a specialized research and consultancy targeting the Internet sector. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks.