OPW INTERVIEW - Jan 2 - Geoff Cook is the COO and co-founder of MeetMe, a leading publicly traded ‘people discovery’ company. (Full Disclosure: MeetMe is a prior client of Courtland Brooks)
You have one of the most fascinating founding stories in the industry. Tell us about it.
It all started in April 2005. My brother and sister (15 and 16 at the time), had an idea for a social network to replace the yearbook for high school with online profiles. I liked the idea and invested some of the early money into it, and it was off to the races.
In the first week 400 people joined. 9 months later we had 1 million registrations. By 2006, we opened up an office and hired about 15 people, scored $4.1 Million Series A funding with US Venture Partners and First Round Capital. Then in 2008, we did a Series B round with Norwest Venture Partners.
We merged with Quepasa, which was a Latin American based social discovery network in November of 2011. MyYearbook had been considering changing its name, because we thought of MyYearbook as essentially connoting Classmates.com. We wanted a name that really showed what we wanted to be perceived as...the best place to meet people. That's where MeetMe came from.
Quepasa’s audience transitioned over to MeetMe in October of this year. In order to complete that step, we needed to internationalize MeetMe in Spanish and Portuguese. Now we are going beyond Latin America with a European launch in French, Italian, and German.
Are you really competing with Facebook, or not?
What we call ourselves is a social network for meeting new people and we play broadly in the social discovery space. We are very different from Facebook. We think of Facebook as the place you go to connect with friends and family. Social discovery is the area we focus on.
There are sites that try to make casual relationships and there are sites that try to focus on the intimate relationships, and I think we are clearly in the casual space. When you ask people why they join MeetMe and why they continue to log in, 90% say to make new friends; 37-38% say that they found someone they consider a best friend on the site.
You are a public company now. Has that really helped you or hindered you?
Mostly helped. The reason is that it really does focus the team on the things that are going to drive growth and continued value.
How do you make money?
It's a combination of advertising and virtual currency. Traditionally, it was very skewed towards advertising. That has changed quite a bit since our focus on mobile. Our mobile revenue is roughly 50/50; it's about 45% virtual currency, which is very different than how it works on the web, where it is a much heavier advertising skew.
60% of our daily active users are mobile. We have found that for the same virtual currency products that we also sell on the web, our mobile user are far more likely to buy them.
On Android, it's roughly 3 times more likely than on the web; on iPhone, 5-6 times more likely than the web. Monetization on mobile is really a function of two things; one is virtual currency, and one is advertising.
We think the virtual currency side is the most promising, because that's where you have this big benefit of users being more likely to pay you. On the advertising side you also have this pretty picture, because today only 1% of the global ad spend is in mobile, despite more than 10% of the total time spent in media being in mobile. Most people think that 10% number will go to 20-25% of all time spent. So there's going to be an explosion in mobile advertising, because there has to be, because that's where people are.
Facebook just announced in Q3, $3 Million a day just in mobile feed advertising. It think it's just a very exciting time for mobile advertising as well.
We can agree that mobile was the big trend for 2012. What do you think is going to be the big trend for the people discovery category in 2013?
You are going to see continued focus on mobile. The other thing you are going to see is interests being brought much more to the front of the application. We now have over a million active users every single day logging in from the U.S., and a growing number logging in overseas.
In September we said about 29% of our MAU was international, up from 17% in June. Once you start getting to that level of scale, you start getting a million plus people logging in every day, you start to enable some of the connections and allow some of the interests to enter the equation. We are starting to think through what that means for MeetMe.
What are you focused on for 2013?
I would say mobile monetization is the number one. On the web the average revenue per daily active user is 14 cents. On mobile, the average revenue per daily active user is 3c. A dramatic chasm. Yet on a percentage basis that 3c is up dramatically from where we were just a year ago. In fact, in Q4 of last year, only about 5% of our MeetMe platform revenue came from mobile. That number has actually expanded to 20% in Q3 of this year. You can say that's great progress, but I think that there is a lot of room to grow. Every one penny increase in mobile monetization, and closing of that gap from 3c to 4c, is more than $2 million in annualized revenue. So I don't know that the 3c will close to 14c, although certainly we are committed to closing that gap.
