Anxious to tap into a budding market, virtual world IMVU on Tuesday began offering casual and social games through partnerships with developers like Viximo, Heyzap and OMGPOP. "From a business perspective, games combined with our social networking and virtual goods economy is the natural direction to take IMVU to the next level of growth," said Cary Rosenzweig, CEO of IMVU. Indeed, Americans now spend about 10% of their time online playing games, according to a recent study from Nielsen. Driven largely by the popularity of gaming on Facebook, meanwhile, the social gaming market has exploded. This summer alone, News Corp.'s IGN Entertainment debuted a social gaming network dubbed MyIGN; Zynga raised $150 million from Japanese wireless carrier Softbank; and Google acquired social media gamer Slide for a reported $180 million. Per Tuesday's announcement, IMVU community members can now log in to the IMVU 3-D Chat or Web site to select from more than 75 social and casual games. It was not immediately clear that the company plans to monetize its gaming section. Founded in 2004, the avatar-based virtual world derives most of its revenue from virtual currency, which is used to purchase virtual goods like clothing, detailed facial features, and furniture. Late last year, the company said it achieved profitability, and doubled its revenue to $25 million year-over-year. Along with 6 million unique visitors per month, the company claims to have the largest virtual goods markets of any online community, with more than 3 million items created entirely by IMVU members. In the last 30 days alone, over 35,000 developers have sold virtual goods in IMVU's catalog, while user-developers add more than 4,000 new items to the catalog every day. The virtual goods and currency market will reach an estimated $1.8 billion this year, as 12% of Americans report having bought a virtual item at some point over the last 12 months, according to a recent study by analyst firm Frank N. Magid Associates and commissioned by virtual currency provider PlaySpan. According to Rosenzweig, nearly 70% of IMVU's community is female, while nearly 60% is over the age of 18. Presently, Rosenzweig says the company is investing most of its profits to hire more employees and improve customer experience. He also expects profits to increase thanks to low operating expenses, which he attributes to extremely efficient back-end technology. To date, IMVU has raised nearly $30 million from investors including Best Buy Capital, Menlo Ventures, Allegis Capital and Bridgescale Partners.
There's a new debate about Facebook that's making echo chambers implode. No, it's not whether "Catfish" or "The Social Network" will prove to be the better Facebook movie, or whether David Fincher's next movie will be a remake of his own "Se7en" with Mark Zuckerberg as the serial killer. This time, it's about whether Facebook is developing a phone. Despite Facebook's public denials, TechCrunch followed up its exclusive with a post deconstructing and debunking Facebook's spin. Facebook's PR team keeps saying it's not technically manufacturing a phone, which would be true. It's like if I say I'm not making Toll House cookies when I'm really just heating up the pre-made cookie dough; my end result is a batch of cookies just like Facebook's end result is a phone. What's funny about all of this is that if TechCrunch is right and Facebook is developing its own branded phone, some of Facebook's denials become even more right. Consider this language from Facebook's official statement: "Our view is that almost all experiences would be better if they were social, so integrating deeply into existing platforms and operating systems is a good way to enable this." Even if this is, in the words of TechCrunch's Michael Arrington, "vague language Facebook will point back to later to show they weren't outright lying," it's a compelling argument for why Facebook doesn't need a phone at all. If I'm playing the role of the judge here, the evidence I've seen for Facebook coming out with a phone is stronger than the evidence against it. There are several good reasons why Facebook shouldn't come out with a phone, though: 1) We already have a Facebook phone. It's called the phone. Facebook is one of the top applications in every major smartphone app store. Beyond that, Ground Truth reported that social media accounts for 60% of mobile web pageviews. I keep thinking back to a moment on a recent flight when I was next to the mother of a 13-year-old girl sitting behind us. Within 60 seconds of hitting the ground, not only did the daughter update her Facebook status, but her mom commented on it. Our current devices make Facebook plenty accessible. 2) We already have a Facebook phone. It's called Android. While Facebook's denials played up the iPhone connections, I like the Android integration even better. On Android, it's far easier to share photos and links through Facebook or other social properties, and syncing phone contacts with Facebook profiles is seamless. One of the 8,000 rumors about this Facebook Phone is that it's being built on Android, which would be the most logical option. Would a MySpace app be able to run on it, though? Internationally, would it welcome competitors like Mixi? More food for thought. 3) Facebook has the carrier relationships already. Facebook reports that there are more than 200 mobile operators in 60 countries deploying Facebook mobile offerings. On one hand, adding a Facebook phone could be a revenue generator for them, but on the other, it could complicate existing relationships. 4) Remember Google's Nexus One? Thought so. 5) Facebook's future holds Zero promise. I love 0.facebook.com, the program allowing people in 45 countries to access a scaled-down version of Facebook without data charges. That's groundbreaking, far-reaching and potentially world-changing in the way it can allow people everywhere to communicate with each other. In other words, it's far more impactful than adding another phone to the marketplace. 6) How many phone commercials have you seen featuring Facebook? Just about any time a new phone comes out, at least one of the images or commercials includes a Facebook reference. Facebook is already changing how manufacturers are designing phones. What else can Facebook possibly want to change, the color of the handset? The "will they or won't they" meter is tipping toward Facebook developing some kind of phone. Yet Facebook already has one of the most innovative, pervasive mobile offerings that works well without them designing the hardware. Odds are you own a Facebook phone already. If you're like me, you own two. The only way Facebook could be more easily accessible is if it becomes surgically implanted in your brain. I can't wait to see how Facebook denies that rumor.
Anxious to tap into a budding market, virtual world IMVU on Tuesday began offering casual and social games through partnerships with developers like Viximo, Heyzap and OMGPOP. "From a business perspective, games combined with our social networking and virtual goods economy is the natural direction to take IMVU to the next level of growth," said Cary Rosenzweig, CEO of IMVU. Indeed, Americans now spend about 10% of their time online playing games, according to a recent study from Nielsen. Driven largely by the popularity of gaming on Facebook, meanwhile, the social gaming market has exploded. This summer alone, News Corp.'s IGN Entertainment debuted a social gaming network dubbed MyIGN; Zynga raised $150 million from Japanese wireless carrier Softbank; and Google acquired social media gamer Slide for a reported $180 million. Per Tuesday's announcement, IMVU community members can now log in to the IMVU 3-D Chat or Web site to select from more than 75 social and casual games. It was not immediately clear that the company plans to monetize its gaming section. Founded in 2004, the avatar-based virtual world derives most of its revenue from virtual currency, which is used to purchase virtual goods like clothing, detailed facial features, and furniture. Late last year, the company said it achieved profitability, and doubled its revenue to $25 million year-over-year. Along with 6 million unique visitors per month, the company claims to have the largest virtual goods markets of any online community, with more than 3 million items created entirely by IMVU members. In the last 30 days alone, over 35,000 developers have sold virtual goods in IMVU's catalog, while user-developers add more than 4,000 new items to the catalog every day. The virtual goods and currency market will reach an estimated $1.8 billion this year, as 12% of Americans report having bought a virtual item at some point over the last 12 months, according to a recent study by analyst firm Frank N. Magid Associates and commissioned by virtual currency provider PlaySpan. According to Rosenzweig, nearly 70% of IMVU's community is female, while nearly 60% is over the age of 18. Presently, Rosenzweig says the company is investing most of its profits to hire more employees and improve customer experience. He also expects profits to increase thanks to low operating expenses, which he attributes to extremely efficient back-end technology. To date, IMVU has raised nearly $30 million from investors including Best Buy Capital, Menlo Ventures, Allegis Capital and Bridgescale Partners.