HowMuchDoesSeekingAlphaPayItsContributors?

Apr.10,20147:34AMET
by:EliHoffmann,CEO

Summary
Below,Ianswerreaders'questionsaboutSA'scontributornetwork,including...
Howmuchdowepaycontributors?(Alot.).
Justhowbigisourcontributornetwork?
WhatisSA'scontributorvettingprocess?
OverthepastmonthIpublishedafewarticles(I,II,III,IV)thatgavereadersaninsidelookathowwedothingsat
SeekingAlpha.Ienjoyedtheprocess,andmanyreadershadmorequestionsorpointedoutareastheyfeltwe
lackedtransparency.OnereadersuggestedIdoanAskElicolumn,whichledtothisarticle.Iliketheideaofa
questionandanswerformatoftenwedon'tknowwhatpeopledon'tknowuntiltheyask.Feelfreetosendme
questionsforfutureAskEliarticlesbydirectmessagingmeonSeekingAlpha,orbyemailingme
(eli@seekingalpha.com).
Tokickthingsoff,IwillfocustodayonquestionsusershaveaboutSeekingAlpha'scontributornetwork.

Doyoupayyourcontributors?Ifso,howmuch?
WepaycontributorswhopublisharticlesthatareexclusivetoSeekingAlpha.Thebasepaymentis$10/CPM
(1,000pageviews).Forhighqualityanalysisofstocksthatotherwiselackgoodresearch,wehavetwoadditional
paymenttiers:i)SmallCapInsightwepayaminimumof$150perarticleforhighqualitysmallcapresearch,as
selectedbyoureditors.ii)TopIdeasfortopsmallcapideaswithexceptionallyattractiverisk/rewardprofiles(110
perday)wepay$500.
Welaunchedarticlepaymentsinearly2011withtheperpageviewmodel.Contributorswerehappy,butsaidthe
focusonpageviewsledthemtopublishanalysisonverypopularstocksandtopics.Sinceunusualinvestment
opportunities("alpha")areoftenfoundinlesserfollowedstocks,thiswasn'tnecessarilyagoodthing.Unlike
traditionalmediabusinesses,inequityresearchthereisoftenaninversecorrelationbetweenbroadappealand
value.
Thisledustochangeourpaymentmodelandchannelalargepercentageofauthorpaymentstoqualityratherthan
popularity.Havingsaidthat,Istillthinktoomuchofthedecisionaboutwhatconstitutesqualityrestsineditors'
hands.Inatruemarketplace,consumersdeterminethevalueofanitem,notanexpertpanel.Becauseofthis,I
amintriguedbywaysinwhichSAcanmorecloselymimicthecharacteristicsofamarketplace,inwhichthosewho
providethegreatestnetvaluearemostsuccessful.Iwelcomeyoursuggestions.
Areallcontributorspaid?
No.Somecontributorsdeclinepaymentforavarietyofreasonstheycandirecttheirpaymentstoacharityoftheir
choice.Othersprefertosyndicatetheirresearchthroughavarietyofchannels,anddeclinepaymentinorderthat
theirarticlesnotbeexclusive.

Howmuchdoyoupaycontributorspermonth?
Contributorpaymentsarethelion'sshareofoureditorialcosts.Inatypicalmonth,wepay$270,000tocontributors
$150,000inpageviewpayments,and$120,000inminimumguaranteedarticlequalitypayments.

Howmanycontributorsdoyouhave?
Sinceinception(late2004),we'vepublishedarticlesby8,807contributors.Ofthose,2,454havebeenactiveover

thepast180days.Inatypicalmonth,weadd150newcontributors.

Arecashpaymentsthemainincentiveforcontributors?
Formanyit'snotthekeyconsideration.Mostofourcontributorsareinvestmentprofessionalsorfulltimeinvestors
whohavesignificantskininthegame.Afterspeakingtomanyinvestorcontributors,myunderstandingoftheir
reasonsforsharingtheirresearchwithotherinvestorsare,inorder:
1.Buildmomentumaroundathesis:atypicalthesisidentifiesamispricinginastock.Onceaninvestorhas
takenhisposition,hewantsotherinvestorstorecognizethestockisunder/overpricedandjoinhim.
2.Businessopportunity:investorscravecapitalintroanalystsandbusinessschoolgradsarelookingfortheir
nextjob.
3.Networking:PublishingonSAhelpsauthorsdiscover,througharticlecommentsanddirectmessages,other
investorswhoownthesamestock,industryinsiders,andevencompanymanagement.
4.Stresstesttheiridea:Ifthey'vemissedsomething,othersmartreaderswillcallthattotheirattention
quickly.
5.Cash.
Howdoyouvetnewcontributors?
Ourvettingprocessissimple:
1.Apotentialcontributorsubmitsanarticleforreview.
2.Oureditorialteamreviewsthearticletodeterminewhetherit'sappropriateforouraudience.Wescore
submissions(internally)onthreecharacteristics:a)Convincing:What'stheauthor'sthesis?Doeshedoagood
jobofconvincingthereader?b)Actionable:Isthearticlematerialtoinvestorsinanobviousway?c)Well
presented:readerswantcontentthatisclear,focused,andeasilyunderstandable.
3.Ifthearticleispublishable,weconfirmthatwehavethecontributor'srealname,address,contact
information,andbankinginformation(seemorehereaboutourduediligenceprocess).
4.Onceacontributor'sarticleispublished,wewatcharticlecommentsanddisputesforanywarningsignsthat
wemayhavegotten#2wrong.We'renotperfect.Ifatanytimewefeelacontributor'sanalysisnolonger
meetsourstandard,wedecommissionhim.

Doyouaskcontributorsforproofofeducationoremployment?
No.Asidefrominsistingweknowcontributors'realidentity,andthattheiranalysisishighquality,wedon'trequire
specificbackground,education,orjobtitles.Manycontributorsprovidethisinformationintheirprofiles,butit'snot
mandatory.

Howdoyouknoweveryarticleyoupublishisgood?
Weknowmanyofthemaregoodbecausereaderstellusso,andbecauseSeekingAlphaarticlesimpactstock
pricesmateriallyandconsistentlytoadegreeunparalleledbyotherequityresearch.WealsoknowthatSAarticles
andcommentspredictfuturestockpricesandearningssurprisestoanextentnotfoundanywhereelse(seemore
here).Occasionallywepublishadud,andlearnwhatweneedtolearnfromthattoimproveourprocessesinthe
future.Butwealsobelievethatthereisnosuchthingasabsolutegood,andthatonbalancewedobestby
openingourplatformtoadiversityofopinionsandallowingreaderstoassimilatemultipleviewpointsandultimately
makeamoreinformeddecision.

HowdoIbecomeacontributor?
Clickheretogetstarted.
Pleasesendinyourquestionsforfuturearticles.I'llalsobewatchingthecommentsonthisarticleandresponding
toquestions,suggestions,etc.Ihopeyoufoundthisinformative.
Eli