2

The Stack Exchange websites are run for profit, and they work by publishing questions and answers that are valuable by two measures: the number of clicks they gain, and how many points they get given by users. It's in the company's interest for the two measures to stay correlated; and while the first correlates with profit, the second correlates with reputation points because every time a contribution is marked as good its author gains reputation.

So I wondered whether the company uses a rough conversion rate between reputation points and US dollars, and if so what that rate is, or if they don't use a rate or don't want to reveal it then what the rate might reasonably be. Of course the relationship might not be linear, so for example if a 1k-rep user's work is worth $100, a 100k-rep user's work might be worth $20000 and Jon Skeet's 1.1M rep...well I don't know!

For comparison, here are some articles on the value of a "like" on other social media sites:

"What is the Real Value of the Facebook “Like”?"
"What is the value of a ‘Like?’"
"What’s the Value of a Like?" (Harvard Business Review - they cite a recent report showing that 80% of the US companies surveyed were "unable to quantify the value of their social media efforts", but they are looking at companies that advertise on Facebook rather than Facebook itself)

Edit
A quick and dirty calculation using

(estimated value of company, $500m or £400m) / (estimated total rep, 2 x 109 points)

gives a figure of $250 or £200 per 1000 rep.

  • 1
    How do you imagine conversion of rep to dollars would take place? – Josh Caswell Jul 26 '17 at 11:54
  • @JoshCaswell - give me 10k in rep - will pay 1$ :P – Oded Jul 26 '17 at 12:01
  • Oh, so it's like credit card airplane "miles". :) – Josh Caswell Jul 26 '17 at 12:05
  • @JoshCaswell - I'm not talking about literal exchange but nominal conversion, because reputation points do correspond roughly, perhaps very roughly, with the company's profit or at least its income. – user314825 Jul 26 '17 at 12:31
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    @ruffle not really. Advertisers don't care about overall reputation, just about amount of visitors to the site. More visitors mean more chance of some clicking ads and buying their products. – Shadow The Princess Wizard Jul 26 '17 at 12:47
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    Assoc bonus = Free $$$ on each site! Am I right? – iBug says Reinstate Monica Jul 26 '17 at 12:58
  • @ShadowWizard - But what I'm calling the total amount of goodness in the questions and answers (Q&A expertise) as measured by rep points must bear some relation to the site's ability to attract visitors, which flows from the amount of content and its goodness as perceived by visitors and potential visitors. – user314825 Jul 26 '17 at 13:04
  • $500m umm.... why not $10000000000000000000000000000000 and be done with? That's just totally absurd. – Shadow The Princess Wizard Jul 26 '17 at 15:05
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    @ShadowWizard - You should have thought for a bit longer before mocking. When the company raised $40m of series D funding in January 2015, mostly from Andreessen-Horowitz, its value was estimated at $459.19 million. Rounding to 1 significant figure and working on the assumption that its value hasn't increased above $550 million in the past 2.5 years gives an estimated worth of $500m. – user314825 Jul 26 '17 at 15:18
  • Well, so I mock the whole system that evaluates the value of websites. Yes, I also mock the value of Facebook being billions upon billions. But I'm afraid I can't mock reality, so you're right. :) – Shadow The Princess Wizard Jul 26 '17 at 15:21
  • 1
    Stack Exchange is worth about 0.1% of Facebook, which has a market capitalisation of around $500bn. There's big money in advertising :) According to Alexa.com, SE is the 135th most popular website in the world. – user314825 Jul 26 '17 at 15:29
23

I wondered whether the company uses a rough conversion rate between reputation points and US dollars

No, we don't. We don't attach monetary value to reputation. Never did, never will.

It doesn't make any sense to do so.

In the same way that Twitter likes don't have any inherent monetary value for Twitter.

  • 5
    "twitter/facebook likes don't have any inherent monetary value." - I'm not so sure if TWTR / FB shareholders as well as advertising customers share your opinion, there :) – Lukas Eder Jul 26 '17 at 12:12
  • @LukasEder - Give me a conversion rate then :P – Oded Jul 26 '17 at 12:13
  • Well, YouTube views do have actual monetary value. – Shadow The Princess Wizard Jul 26 '17 at 12:21
  • @Oded: I once paid 10$ for 50 likes. – Lukas Eder Jul 26 '17 at 12:27
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    @LukasEder - did it make you happier? – Oded Jul 26 '17 at 12:30
  • Why do you think it doesn't make any sense to do so? They are some kind of measure of the combined goodness of questions and answers which is what builds the brand and gets the company sales. – user314825 Jul 26 '17 at 12:36
  • Why do you think it does make sense to do so, @ruffle? The two things are not correlated. – Oded Jul 26 '17 at 12:37
  • @Oded - Imagine if Twitter and Facebook contributors stopped issuing likes. That would be a problem. The value isn't just in views but in views times the amount of enjoyment a viewer has while viewing, which can be measured, however roughly, by likes. – user314825 Jul 26 '17 at 12:54
  • @Oded - I give some kind of train of thought connecting rep with money in the question. I'm not sure which link in the chain you would question the most. The total amount of perceived goodness of questions and answers correlates with both income and total reputation points, I would say. – user314825 Jul 26 '17 at 12:56
  • Mostly - the link you are drawing between clicks and points. Not seeing the directly correlation that you seem to believe exists. Regardless - you asked about what we do - and we don't do that - we don't use any sort of rate. – Oded Jul 26 '17 at 13:06
  • @ruffle - I guess I most object to how you conflate the mechanics of the site (reputation/points) with the value of the site to its users/investors/the company. – Oded Jul 26 '17 at 13:12
  • @Oded There are people you can actually go to that will like your page/content for $X per like (because this can give the page/content more attention via facebook's algorithms and for many companies that content is effectively advertising). There is a monetary value for likes on facebook. – Servy Jul 26 '17 at 13:25
  • @Servy - but do FB/Twitter (the companies) attach monetary value to them? – Oded Jul 26 '17 at 13:27
  • @Oded For Facebook, yes. You can pay FB (not a third party) to promote your page/content in order to get it more likes, so there is in fact a monetary value to the company for them (because there's a monetary value to their customers that they can fulfill). – Servy Jul 26 '17 at 13:36
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    I haven't "made up" any statistics. I do not have an "obsession". I do not wish to put a dollar amount on "everything". My assumptions on the company's value and the value of having "reached" so many people are reasonable, and I have shown a sample correlation of 0.83, not 0, between rep score and number of people "reached". You sound as though you are little interested in answering the question here, in which case, why post? It's a fact, not an opinion, that the company leverages as a profitable asset the contributions made by thousands of people who unlike yourself are unpaid. – user314825 Aug 9 '17 at 12:04
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I have 100k reputation on Super User. Quite literally the only material benefit I have gotten from it is a mug, a T shirt and assorted swag.

SE doesn't make money directly off our answers, but indirectly off the 'reputation' of the site - as a good place to get answers, and leverages that for ancillary products, like careers and advertising.

So, your premise is probably flawed, and there's no way to set a dollar value on a user's reputation. This isn't even taking into account things like moderation activity or goodwill from other users.

  • I think your second paragraph suggests it does make sense to assign a dollar value to rep. If rep started correlating negatively with profit, or with income, that would be a problem. Rep also correlates with the goodwill from which the company benefits among its contributors, otherwise it wouldn't send promotional goodies to high-rep users. (I'm wondering whether I should estimate a figure for the company's entire worth and divide it by the total number of reputation points :) Horribly quick and dirty, but unless someone suggests a better method...) – user314825 Jul 26 '17 at 12:50
  • You're basically seeing what you want - basically the abstraction between revenue sources and precise answers is pretty big – Journeyman Geek Jul 26 '17 at 13:44
10

In the last round of funding, 2015, the Stack Exchange valuation was around $460 million [USD].

Total reputation in each of the top ten sites* by number of users:

So if we assume that reputation value is equal across all sites (it's not, but this is meant to be a quick assessment), and we ignore the fact that we're using 2017 reputation counts applied to a 2015 valuation, and we assume that the content is what makes the company valuable, and that the reputation roughly correlates to content value, then we can sum the reputation, divide by the valuation, and provide a rough ballpark estimate for reputation per USD:

1,068,957,542 / $460,000,000 = 2.32 rep/$

Approximately $0.43 per reputation point.

Of course there are many, many flaws to this method, but it's one way to assign arbitrary value to an arbitrary fake internet point system.

If, for instance, I attempted to sell my network account (all sites) to another person, with its 224k of total reputation, I couldn't command a price of $0.43 * 224,000 = $96,320.

If someone purchased Stack Exchange the valuation would be much greater than $460M [USD], however they wouldn't necessarily be buying the reputation of the users, but the content and the userbase itself. When Microsoft purchased Minecraft and LinkedIn they weren't buying a product, they were buying players and users - established customer bases and communities.

So the $0.43 is hugely inflated, however there really is no easy way to accurately gauge the value since there's no market. We can make up any sort of calculation that we want, but until reputation becomes something easily and widely traded then there's no real way to evaluate its actual value.

*I'm ignoring meta.SE for the purposes of this post.

Interested parties may inquire within.

  • 1
    This ignores the infrastructure of the site - servers, codebase, staff etc... as being of any value. – Catija Jul 26 '17 at 15:26
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    @Catija Correct. Let's perform a little thought experiment. What is the value of the site without its content, community, and daily traffic? What is the value of the content, community, and daily traffic without the backend to support it? While the backend made the community possible, it should be fairly obvious where the majority of the value lies. I don't intend to devalue the backend, the employees, and the company itself - there's a complex interplay there, but if sold the value would largely be dictated by the content, users, and traffic, and only in small part the support structure. – Adam Davis 'ze-zir-zem' Jul 26 '17 at 16:26
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    "there's no market" - absolutely. Have an upvote. – Bathsheba Jul 26 '17 at 16:46
  • Many thanks for this answer. It's true that you couldn't sell your account for $96k, but perhaps your work has contributed around that amount of value to the company? – user314825 Jul 26 '17 at 19:14
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    Well that's a different question. On SO it says my posts have helped 8.4 million people, which is simply a count of the pageviews of my questions and high ranked answers. In the US pageviews might be worth as much as $1 per 1,000 pageviews in advertising, and with 8.4 million of them I've made Stack Exchange perhaps $8,400 in advertising income over the last decade. I've made over 48k rep on SO itself, so that would be around 6 rep per dollar. But those pageviews continue to increase so perhaps in another decade I'll have made them another $8k. I don't think I've contributed $96k worth. – Adam Davis 'ze-zir-zem' Jul 26 '17 at 19:26
  • On average each of those visitors will have viewed more than one page, but probably not as many as $96/$8 = 12. – user314825 Jul 26 '17 at 22:18
8

The following suggests that a user with a reputation score of 100,000 has done about £20,000 ($27,000) of work for the company.

Pending the investigation of the applicability of Bathsheba's excellent suggested model, I took a sample of 25 users of Stack Overflow and for each of them I looked at their reputation score and the number of "people reached". The sample comprised the authors of the five answers posted here prior to this one, along with the lowest-score users on each of pages 1-5, 51-55, 101-105 and 201-205 of the listing of SO users by rep.

A linear regression with the intercept set at 0 rep = 0 views gives a goodness of fit R2 = 0.833 and a figure of 77 views per rep point. So if 1000 views are worth $1 to an advertiser, that's $77x per 1000 rep where x is the average number of pages a visitor views here.

R2 jumps to 0.89 if two very high views-to-rep users are removed.

An estimate based on what's been written so far would be maybe $80-$400 (£60-£300) per 1000 rep, or $16-$80 (£12-£60) for a full 200-rep day. Since the estimate of the company's value at $500 million is based on the idea that it's going to be around for some time, and since the number of views of any much-viewed page is going to increase during that time, a reasonable estimate of the amount of value corresponded to by reputation should be in the higher part of that interval. I would suggest a ratio giving the following figures:

  • a 200-rep day gives the company about £40 ($54).
  • a rep score of 1000 is for about £200 ($270) worth of work
  • a rep score of 100,000 is for about £20000 ($27000) worth of work

(I'd be grateful for some help making a data query for "people reached" against "reputation" points for a bigger sample.)

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2

The business model of SO as a company is structured in such a way that it's income isn't correlated with reputation, so you cannot attach a monetary value to reputation.

SO has two main ways of making money, the first is ads. The income money SE gets from ads is going to loosely correlate to the amount of views on the site (particularly from anonymous users). Views however, particularly views from anonymous users, isn't going to correlate to reputation. Lots of actions will earn people lots of reputation, while keeping a fairly low anonymous user count, while other posts will get enormous numbers of views, particularly views from anonymous users, without earning the site as much rep (proportionally). This is in large part because anonymous users can't vote, so their views don't generate rep.

Next there's the Jobs portion of the site, that generates money by matching people looking for jobs with people looking to hire. There's even less correlation here between the revenue generated and rep increases in the site, mostly as a result of the fact that such a small portion of the site's users actually use this feature of the site, but also because usage rates aren't going to correlate with the user's rep (if you only count "active" users).

2

My thought: it's not worth anything.

A comparison between currency and reputation makes little sense so therefore you can't think of the value of Stack Exchange being in "reputation". The mathematicians amongst us would not consider a substitution of reputation for currency as a valid change of measure. A couple of reasons in non-technical language:

  1. Reputation is not-transferable (with the exception of the bounty "give") between parties so therefore cannot be used as fiat money.

  2. Reputation is far too inflationary. Processes that deflate reputation are rare and include downvoting questions (-2), answers (-3), and question and user removal.

It's probable that the rate of change of total reputation is correlated with site activity, but that neglects the important facet of folk visiting the sites that don't vote. So I'd submit to you that the rate of change of reputation might be broadly linked to the value of Stack Exchange, not the reputation level itself. In other words, a starting point for a model might be

v(t) = a (dr(t) / dt) + b(t)

where v is the value, r the reputation, t time, a is a constant and b a function that might end up being too time-dependent for anything useful to be gleaned here. If b turns out to be practically constant or even linear in time then you have stumbled upon something truly brilliant. Not sure where you'd get the data from though to test this model; you can probably get r(t) from a fancy data query, and v(t) from the stock price and shares outstanding data. Good luck!

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