Group has written off 68% of the purchase price it paid before LLMs ‘killed’ Stack Overflow
The collapse in active usage of Prosus portfolio company Stack Overflow over the last three years has been nothing short of spectacular.
The repository of coding knowledge, where developers are able to get help from peers on questions, saw the number of user questions per month drop to below 3 500 in December 2025 (or just under 7 000, when including deleted questions) – a decline of 80% from the prior year.
This level is 98% lower than its peak, reached in March 2014, according to company data. Including deleted questions, its peak was around 300 000 per month at the start of the Covid-19 pandemic.
As developers turned to a host of powerful code-writing AI assistants such as ChatGPT, Anthropic’s Claude, Google Gemini and (to a lesser extent) Microsoft Copilot, usage of Stack Overflow fell off a cliff.
This is causation, not correlation.
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In 2023, the world’s richest man Elon Musk described the fate of Stack Overflow – which had already seen a 50% drop in traffic – as “death by LLM [large language model]”.
A cool R28bn …
Prosus purchased Stack Overflow for “approximately $1.8 billion” in June 2021 (the final figure was $1.742 billion, including the $98 million in cash in that unit – this equates to R27.9 billion at current exchange rates).
Given the soaring usage by work-from-home developers (who were physically separated from their colleagues who they would’ve often turned to for help) during the pandemic, this was as close to a full price as the Silicon Valley venture capital funders would’ve been able to get for this asset.
They would’ve seen the then CEO of Prosus, Bob van Dijk, and his investment bankers coming a mile away.
Prosus acquired the business, which it said at the time was “one of the 50 most popular websites in the world”, to bolster its EdTech portfolio.
This only became a “core segment” of the group a year earlier when a number of its education investments “graduated” from its Ventures arm.
By March 2022, Prosus boasted that it reached “90% of the Fortune 100 companies” across its “corporate learning companies”.
This included 100% of Stack Overflow, a majority stake in GoodHabitz, sizeable shares in Skillsoft (owner of Codecademy) and Brainly and minority (sub 20%) stakes in Eruditus Executive Education, Byju’s, Udemy, Similarweb and SoloLearn.
Impairments
Immediately following the acquisition, it was clear that Prosus had paid too much.
In March 2023, it impaired goodwill related to Stack Overflow by $246 million (R3.9 billion in today’s money). This, it said, was “primarily as a result of the current market conditions and the increase in risk-free rates which resulted in an increase in the discount rate”.
Between August 2021 and March 2022, Stack Overflow generated $54 million in revenue, with $34 million in trading losses due to it investing heavily for growth.
It was aggressively pushing Stack Overflow for Teams, an enterprise solution, and by March 2022, had more than 1 000 customers paying for the service, generating annual recurring revenue of $42 million – up 61% from a year prior.
In the year ended 31 March 2023, Prosus recognised a further $560 million impairment (R8.95 billion in today’s money) on Stack Overflow as “the business ha[d] not performed as expected in the current year due to challenging macroeconomic conditions”.
By this point, revenue (since the date of acquisition) totalled $94 million, while trading losses had ballooned to $84 million.
By the end of March, it had 950 paying customers for Stack Overflow for Teams, with an annual revenue run rate of $55 million.
In March 2024, Prosus impaired the goodwill related to Stack Overflow by an additional $372 million (R5.9 billion in today’s money).
This, it said, was due to “a decline in the business performance in a challenging macroeconomic environment”. In the year, revenue grew by 4% to $98 million, with trading losses reducing to $57 million.
The rise of AI
Prosus noted at the time that its “EdTech companies are most-exposed to risks and opportunities from GenAI [generative artificial intelligence] by virtue of their business models centred on content”.
“Stack Overflow, for example, has faced this duality earlier than other companies. While models like ChatGPT can distract traffic from Stack Overflow, at the same time, its data and community are unique and essential to train new models for code assistance, such as those of OpenAI and Google but also proprietary and others. In response, Stack Overflow has introduced a set of tools called OverflowAI which includes GenAI assistance for the public site and for Stack Overflow for Teams products.”
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Like Reddit, Stack Overflow licensed its data to AI companies and has been booking revenue from this.
A tool called ‘Stack Internal’ which provides a generative AI add-on to enterprises is, according to an interview with Stack Overflow CEO Prashanth Chandrasekar, being used by more than 25 000 companies around the world.
Still, even without any impairment in FY2025 (where Stack Overflow generated $115 million in revenue, with trading losses of $22 million,) Prosus has written off $1.178 million of the value of the business since it bought it. That equates to 68% of the price it paid.
Despite the number of questions on Stack Overflow declining as precipitously as it has since 2022, Chandrasekar remains bullish.
He told The Verge’s Decoder podcast that the question decline since early 2023 has largely been confined to “simple” questions.
“The complex questions still get asked on Stack because there’s no other place. If the LLMs are only as good as the data, which is typically human curated, we’re one of the best places for that, if not the best for technology.”
Prosus perspective
Somewhat usefully, EdTech has been almost completely de-emphasised in current Prosus CEO Fabricio Bloisi’s new ecosystems strategy spanning Europe, Latin America and India – which prioritises food delivery, fintech, commerce and experiences.
If it could find buyers for its other assets, it will probably take the money.
Still, is Stack Overflow worth even $566 million (R9 billion), given the current near-existential threat posed by AI?
That will become clearer in June when Prosus reports its annual results …
This article was republished from Moneyweb. Read the original here.