Redpoint Ventures Doubles Down On Answers Corp.
This story was written by Joseph Tartakoff.
VC firm Redpoint Ventures has exercised its option to purchase $7 million in additional convertible preferred stock in Answers Corp., which runs Answers.com and WikiAnswers.com (NSDQ: ANSW). Redpoint Ventures was already Answers' largest investor, according to a release. It had purchased $6 million in preferred stock from the company last Juneand had the option to purchase the stock it bought today. As part of the additional investment, Redpoint will get a second seat on Answers' board of directors.
Answers says that the investment "confirms their support and confidence in our vision to build the world's best Q&A site"and Redpoint says it "reflects the growth opportunity for their technology and community in the Q&A space." But the company's growth has been uneven. Lately, its user-generated Q&A site WikiAnswers.com has greatly outperformed reference site Answers.com. For instance, during the first quarter of the year, revenue at WikiAnswers.com increased 166 percent to $3.16 million, while revenue at Answers.com dropped 14 percent to $1.57 million.
By Joseph Tartakoff