New Hope-based MeetMe names COO, myYearbook co-founder Geoff Cook CEO; focuses on monetizing growing mobile traffic
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MeetMe, the New Hope-based social networking website, announced last week that Geoff Cook had been named CEO effective March 11, replacing John Abbott, who becomes the Company’s non-Executive Chairman of the Board. Cook, who co-founded myYearbook in 2005 along with his then teenage siblings, Catherine and Dave, has been Chief Operating Officer and President of MeetMe's Consumer Internet Division. Abbott had been CEO of Quepasa, the company that acquired myYearbook in November of 2011. Quepasa changed its name to MeetMe in June 2012, and the myYearbook platform was rebranded as MeetMe later in the year and integrated with Quepasa's Latin American-oriented social network. The overwhelming majority of MeetMe's pre-merger revenue came from the myYearbook platform.
Prior to helping start myYearbook, Geoff Cook, 34, founded EssayEdge and ResumeEdge while a student at Harvard University in 1997 and sold it to The Thomson Corporation (now Thomson Reuters) in 2002.
MeetMe also announced its 4th quarter and full year 2012 results last week (see transcript of earnings conference call). Pro forma (non-GAAP) results comparing the annual revenue of myYearbook and Quepasa combined increased grew 31% to $46.7 million for 2012 over 2011, although 4th quarter revenue grew only 23% over the prior year's 4th quarter. Net loss for the year was $10.3 million, but a non-GAAP measure MeetMe uses, Adjusted EBITDA, was positive $3.9 million for the year, an improvement from a loss of $1.3 million in the prior year. Cash and cash equivalents at year end were about $5 million, down from $8.3 million a year ago.
Cook, in a telephone interview with Philly Tech News, says one of the challenges MeetMe faces is monetizing its rapidly growing mobile traffic at at least the same rate as its web-based traffic, a challenge Facebook also faces on a larger scale. Mobile now accounts for 60% of MeetMe's daily audience. While Mobile accounted for only 5.8% of MeetMe platform revenue in Q4 2011, it now accounts for 22%. Despite this rapid growth, in Q4 2012 revenue was $0.13 for each daily active user on the web, compared to just over $0.03 for each mobile DAU. While overall traffic continues to show growth (MeetMe daily active users, DAU, increased 14% over the Q3 average to 1.261 million, although the absolute number of page views has dropped during the mobile transition), obviously this wide gap between mobile and web monetization could impact future revenue growth. As Cook said in last week's earnings conference call, "in the near term, the challenges associated with the shift of our users to mobile will affect operating results, until the monetization of mobile expands sufficiently."
Monetization of mobile users will require different approaches, Cook says. The first initiative is a premium subscription service, MeetMe Plus, the first stage of which will be introduced in late March. While the mobile platform has proven less amenable to traditional web advertising due to the small screen size and other factors, Mobile may be easier to monetize in terms of subscriptions because it has a built in payment platform (virtually every MeetMe iPhone user has a credit card on file with Apple), making the purchasing process much easier. The first phase of MeetMe Plus will contain four key benefits for subscribers: the suppression of ads within mobile applications; bonus virtual currency every month; discounts on any subsequent virtual currency purchases; and the ability to see which other users have viewed their photos and which photos they viewed. Additional MeetMe Plus features will be rolled out over the course of the year.
The second mobile monetization effort is centered on native advertising, Cook said, through which relevant native content ads will be inserted directly into a MeetMe user's mobile live feed. The first phase of this initative will begin in late March, in sync with the MeetMe Plus launch, working with a single partner initially.
Another area of expansion for MeetMe in terms of broadening its addressable market has been through adding additional languages to the platform. Late in Q4, MeetMe launched in French, Italian and German, and early this year added Russian, Japanese and traditional Chinese. Although these newer additions are still at an early stage of development, MeetME's MAUs (Monthly Average Users) from outside the US and Canada has grown from 16.7% in June 2012 to 44% in December.
MeetMe's focus is on what it calls "social discovery", or helping people meet new friends. Although it competes with broader competitors such as Facebook to some extent, it has a distinct set of competitors within the social discovery niche, such as Tagged and Badoo, according to Cook. MeetMe's demographics in terms of age have changed somewhat. Where it was originally aimed more at the high school audience, as its core user based has grown older and MeetMe has broadened its marketing appeal the median user age has increased from about 18 to 20, Cook says, and MeetMe's current target market is users in the 20 to 30 year old age group.
MeetMe currently has over 150 employees, about 130 of whom are located in New Hope. Most of the rest are in New York. The company has been strengthening its senior management team. David Clark will be joining MeetMe as Chief Financial Officer on April 2nd from NutriSystem, where he has served as CFO since 2007. Co-founder Catherine Cook continues to serve as MeetMe's VP Brand Strategy.
MeetMe's primary data center operations are based at an Equinox facility in New Jersey, although the company does use Amazon Web Services' EC2 for some functions.
Quepasa acquired myYearbook for $100 million in 2011, which included $18 million in cash and $82 million in Quepasa stock. Publicly traded Quepasae changed its listed name to MeetMe and ticker symbol (NYSEAMEX: MEET) last year. In addition to reaching the Latino market, the Quepasa acquisition made it possible for myYearbook to become part of a publicly listed company without doing an IPO. First Round Capital was an early investor in myYearbook (the story was that FRC's Chris Fralic lived not too far down the road and stopped in one day), to be joined by US Venture Partners and Norwest Venture Partners. MeetMe currently has a share price of $2.54, and a market cap of $94 million.