UPDATE 2024: This answer was originally written more than half a decade ago and was accurate and informative at the time. In the intervening years the exponential development of Artificial Intelligence has completely altered the market landscape, rendering much of Quora’s original business model obsolete. On January 9, 2024, Quora announced that while the original Quora business was now profitable, the company has raised an additional $75 million to fund expansion of its POE platform, which aims to be a “universal front end” for AI-based chatbots. This new financing now values the company at $500 million, one quarter of what it was valued at when the question above was written.
Because most users still don’t understand the original model, I am leaving this answer up for educational purposes, as it is still generally accurate for the original, Quora side of the combined business.
Because it is absolutely, positively worth it.
Having watched Quora since its founding from the perspectives of both an active user and an industry professional, I have been blown away by what the company has accomplished, and how it has accomplished it. And the fact that virtually no one has figured out what they are really doing continually amazes me.
The fundamental business model underlying Quora, and why it can provide so much value without any of the participants here paying anything, is the same one that allows readers to pay nothing for The Village Voice, and viewers to pay nothing to watch Jimmy Fallon. In both cases, the entire visible interaction of the operation (subscribers, newsstand readers, editors, reporters, sports columnists and cartoonists; or viewers, hosts, guests, musicians, directors and producers, respectively) are 'outside the monetization loop', which comes 100% from advertisers paying lots of money to run full page ads or 60 second commercials against the content.
In the same way, everything you see on Quora (question askers, answer writers, editors, commenters, administrators, moderators, even Quora members who just lurk and read their feed) is completely 'outside the monetization loop', now and forever.
But what makes Quora so deliciously different (and sends shivers of professional appreciation down my spine whenever I think about it) is that unlike the other two examples, Quora has taken advantage of the functionality of the web to completely disassociate the two loops. Subscribers to the Village Voice see ads, and viewers of Jimmy Fallon see commercials, so they have an idea that somehow, someone is making money. But on Quora, thanks to the magic of the Internet, that is all hidden from you.
Instead, the whole purpose of everything you know and/or experience about Quora is for one—and only one—purpose: it is a giant, organic, machine brilliantly designed by an Architect and constantly being tweaked...
...to output the most frequently visited database on the web: millions of unique pages, each headlined by a query that someone will enter verbatim into a search engine.
And when they do, what happens? The search engine’s billion dollar algorithms crunch through fifty trillion indexed pages, considering the following factors:
Look through that list and think about what Quora has just generated. If you come up with 9/9, you're on the right track. Quora and Google have a marvelously symbiotic relationship: Google needs content to show its viewers, Quora needs viewers to read its content. The result is that for any question you can think to ask Google, Quora’s answer will be on the first page of those 50 trillion where it will be clicked on and viewed…even by someone who never heard of and couldn't care about Quora!
Every one of those page views has value to some advertiser, and in a world of ever-increasing ad tech targeting technology, every page has at a minimum a better-than-average price (because it's a completely vetted page with no objectionable content) and at best the highest price on the web (think about the demographics of a viewer who comes to Quora via a web search for How do I invest in a distressed debt hedge fund or PE firm?). I can attest to this, because my company was one of the initial beta advertisers when Quora turned on ads a few months ago, and we’ve found that Quora has consistently converted higher than any other source of leads. But you know what? Even though I’m on the site daily, and live in and around the keywords and topics on which we are advertising, I have never seen one of our own ads!
As of 2017, Quora has over 200 million monthly unique visitors! Of those, my guess (which Quora will never confirm or deny) is that fewer than 10% are actually registered users of the site. The others are all search engine visitors (and referrals from Quora’s content partners who republish links to ‘best of Quora’ answers, thereby providing additional search engine juice) whom no registered users of Quora ever see, feel or interact with. So even if for some unknown reason all current Quora registered users were to vanish from the earth and never be replaced, that database of crowdsourced answers to eternal questions will live on forever, generating ever-increasing revenues.
It is awe-inspiringly brilliant, and more than worthy of its current $1.8 billion market cap. My only quibble? I’ve been around here contributing priceless content for six years…and no one ever invited me to invest!