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Disqus: Are Web Comments a Good Business?

Disqus claims 42% of internet users read the comments after a story or contribute one of their own. And they definitely know what they’re talking about, since this figure is extracted from the company’s more than 2 million clients.

However, two main schools debate over the impact comments might have on the overall perceptibility of online content, the first school putting comments at the very core of online content appreciation, giving more value to the original content, while the other simply believe that comments are just a way for readers to highlight details, or at most interact with the author and potential readers.

How Much Are Comments Worth?

It goes without saying that Disqus is in the “reader comments are great” camp . It doesn’t simply end here: Disqus launched “Promoted Discovery”, an embedded service that hands over prepaid-for content right next to regular reader comments.

It’s true however that Disqus isn’t pioneering with this new feature, since Outbrain already helps publishers and advertisers buy and sell web traffic. Nevertheless, this is not what interests us here; what matters here is the rationale behind such services.

Someone who takes the time to read reader comments of a story is likely to be passionate about the topic and more likely to click on the proposed content. Meanwhile, reader comments overall are being treated with a new seriousness due to recent studies that suggest they shape perceptions more than we thought.

We expect advertising revenue to grow from less than 5% in Q4 of 2012 to over 60% of our revenue by the end of this year. – Daniel Ha – Disqus CEO

Is It a Viable Model? How Far Will It Go?

Disqus can possibly succeed in making this kind of model go mainstream. With native advertising champion Fred Wilson as one of its investors and current access to millions of websites, things are made easier. However, finding relevant content is not a simple stroll in the park. And our own experience with the Discovery service of Disqus led us to some irrelevant content most of the time. Of course, things will definitely improve as scale grows, and as Disqus deploys the service to more websites. Accuracy will come hand in-hand with scale.

Still, the main obstacle to the growth of this particular service lies in the very nature of it, with a killer dilemma: publishers might not be totally willing to offer a service that will take readers away from their own website, depriving them from precious traffic time and lowering their bounce rates drastically. It is true that this kind of service will provide money, hence the dilemma.

Another final obstacle, and not a small one too: betting that comments will be an advertising gold mine can also be impacted by the fact that big players can simply decide to completely block the whole commenting thing. A “no comment” model. Tumblr already went this way: founder David Karp recently declared that the site downplayed comments in favor of “a beautiful design and no jerks.”

A tough nut to crack here. What do you think?

Filed under: Market Trends