Good question. According to the sources, stumbleupon creates more revenue then the bigger dog, digg! and from the look of there unique way of generating revenues, it makes sense... Finally found the answer, check this "A look at revenue StumbleUpon’s 2008 expected revenues are approximated at $5-7.5 million. At the same time, Businessweek estimates that in the first three quarters of 2008, Digg lost $4 million on $6.4 million in revenue. While I don’t know the costs to run StumbleUpon, it’s fair to assume that they are far less than running Digg, not only because StumbleUpon is substantially smaller in terms of users and monthly traffic, but also because the service doesn’t require the same number of servers or have to deal with the bandwidth costs that destination sites like Digg do. So how does StumbleUpon manage to make comparable revenues to Digg with far less traffic (as a destination) and a substantially lower number of users, while not alienating marketers and publishers? It’s quite simple actually, and considering that it’s no secret and nothing new, it’s surprising that no other social news site has been able to do something similar. StumbleUpon uses a two tiered approach to making money while keeping the community, the marketers, and the publishers happy. 1. Sponsored Users – while a free, basic StumbleUpon account has everything that most users will ever need, the service allows you to upgrade to a sponsored account for a modest fee. 2. Sponsored Stumbles – to resolve issues with marketers and publishers, StumbleUpon allows them to buy traffic from the service. Before you start thinking that paid traffic pollutes the integrity of a trust-based social news site, consider their justification: the whole purpose of the site is to determine the preferences of a user based on his or her habits (thumbs up or down) on the site and then continue to send the user targeted sites. If the service performs its functions well, then it shouldn’t matter if the content is sponsored or not, because in either case the content is relevant to your interests based on StumbleUpon’s recommendation engine. Rather than outright banning users for violating the terms of service, StumbleUpon sends them the following email while putting their accounts under review. Our Terms of Service prohibits members from creating multiple accounts without permission or using a StumbleUpon membership to promote a specific site, business or product. If you’d like to advertise on StumbleUpon, please visit this page for more information: http://www.stumbleupon.com/ads" http://mashable.com/2009/01/07/where-digg-fails-success-for-stumbleupon/ http://www.clickz.com/3631042 http://www.stumbleupon.com/ads/ check this link to get the idea more clearly!!
