The pessimist case goes something like this:
The new company spent a huge sum of money on Stack Overflow and wants results. That'll mean selling us back our answers, charging a membership fee or cranking up ads. Whatever they decide to do, it will prioritize making money over the community who made these sites valuable.
Obviously that could happen. If so, that would be disappointing to say the least. Still, the question is what does a company expect from a $1.8 billion investment?
Prosus is a holding company. Probably the best known holding company is Warren Buffett's Berkshire Hathaway. (Disclosure: I'm an investor in Berkshire. I also have vested options in Stack Overflow from my time as an employee.) Joel Spolsky's blog post suggests Stack Overflow will be allowed to operate independently, which is not unusual for a holding company. The core competency of a holding company is allocating resources to the most promising subsidiaries rather than actively managing them.
Very likely Stack Overflow will go into the "Ventures" division which includes:
The company's annual report gives us some clues about their intentions:
Ventures is about building the next wave of growth for the group. We invest with a long-term vision in mind but make sure to tether that vision to short- and medium-term operating realities around risks, competitive dynamics, future capital needs, and other considerations. Our capital commitments are commensurate with this balanced assessment. Over time, as we build our understanding and expertise, the amounts invested may grow substantially. A good example of this approach is Food Delivery, which was nurtured as part of Ventures before becoming a standalone core segment last year.—Martin Tschopp COO, Ventures
Cutting through the business speak, this means the Ventures segment hopes to invest in subsidiaries so that they become profitable in future years. For the past few years, Stack Overflow investors have been looking for an exit. Now the investors are looking to build value. It's a real change in incentives that probably will be a net positive for people who benefit from the information bound up in the network. (That means us!)
It's important to recall that CC BY-SA contributions can be used by third parties. Anyone can download the data and create their own resource. So the $1.8 billion isn't about the content. Instead, the value comes from:
- the brand,
- proprietary code,
- employees who continue to work for the company and
- the connection to a community of contributors.
In my opinion, this acquisition reduces the odds that Stack Overflow will go dark. There's an incentive to keep the investment in play even if "short- and medium-term operating realities around risks, competitive dynamics, future capital needs, and other considerations" keep Prosus from increasing their investment.
Now there are still risks. For one thing, none of the announcements mention Stack Exchange. Nothing says the new owner will be any better at recognizing the potential of non-coding Q&A than the current owner. I'm also mildly worried about a line from the Prosus press release:
"There is an opportunity to connect more deeply with their community through our other education platforms to further fulfill their learning needs."—Larry Illg, CEO of EdTech at Prosus
Still, the influence is just as likely to go the other way. By coincidence, I interviewed a CM at Brainly a few weeks ago. As we talked I kept thinking there's a potential harmony between a site dedicated to homework help (Brainly) and a network that is suspicious of homework questions (Stack Exchange). Again, holding companies are better than most at allowing subsidiaries some measure of autonomy.
I suspect a large multinational corporation will be an improvement for non-US employees and international Stack Overflows. (Maybe be a little more friendly with China.)
Of all the options (IPO, buyout or status quo) this seems the best outcome. Management no longer needs to put lipstick on the pig. They won't need to spend time looking for investors. Their performance won't be tied to quarterly growth (at least not immediately). Nobody will need to worry about the company making payroll. I don't know a whole lot about Prosus, but it seems like as good a home as any.