Yoick - Hightechwire

Sramana Mitra has penned an insightful post on the pre-teen market: what their activities are online, which sites they find popular etc. You can read it here, or view Read/WriteWeb’s take on it here.

Given that pre-teens are Yoick’s sweetspot, we particularly like these excerpts from Sramana’s report:

Websites targeted at pre-teens earn majority of their revenue from subscription, e-commerce and content provided by the websites. Other sources of revenue for these websites are advertisements placed either on their websites or in the games, downloading of music and games, licensing of content, syndication and partnerships for developing content and gaming…

and this:

Immersive gaming model used by NeoPets and other gaming websites could well be the business model of tomorrow as it allows advertisers to place creative advertisements in games without disrupting the flow of the game and thus generating interest in the product, which creates brand awareness.

Cisco has announced it is acquiring social network builder, Five Across. The San Francisco-based company was founded in 2003, raised $2 million from Granite Ventures and Adobe Ventures in 2004 and have 11 staff.

Five Across has a social networking platform called the Connect Community Builder, which empowers companies to easily augment their websites with full-featured communities and user-generated content. In essence, they provide socnet functions to websites.

Dan Scheinman, Senior VP and GM of the Cisco Media Solutions Group sees this acquisition as an important step towards Cisco being positioned to assist its customers “evolve their website experience into something more relevant and valuable to the end-user.”

Cisco seems to have woken up to the fact that networking is not all pipes and plumbing. The people factor is the X-factor. In fact, check out their tagline: Cisco is the worldwide leader in networking that transforms how people connect, communicate and collaborate.

I suspect we’ll be hearing about more acquisitions in the social media space from these guys.

Social networking and social destination sites by and for social networking alone just don’t cut it. People get bored with networking  for networking’s sake: there needs to be a focus point or focal points beyond simply socnet.

Om Malik has glommed onto this thought I had way back in the mists of time, circa August 2005 and now asks: Are Social Networks Just a Feature?

In Yoick’s view, successful web communities have at their core, a set of pursuits or strange attractors - these pursuits work best if they deliver some benefit from interactions between members of a community…the higher the usefulness factor, the more compelling an attractor.

To sum up, I agree with Om. Yoick is essentially building an “integrated community entertainment platform”, a term borrowed from Andrew Littlefiled, CEO of Doppelganger. Within this ICEP, the social networking aspects are critical as part of the community journey, but they are not the sole destination.

Doppelganger, a San Francisco-based virtual world company has raised a Series C funding round of $5 million from Greycroft Partners.

CEO, Andrew Littlefield, prefers to call them a community entertainment company that builds virtual environments for the rest of us, aka non hardcore gamers.

Doppelganger initially raised a Series A of $2.5 m from Draper Fisher Jurvetson and a Series B of $8.5 m from Trident Capital, DFJ and Draper Richards. That’s a lot of dough for a virtual world play - but when you consider it costs them up to $250k to build one of their inworld characters you understand where the money is going. Hey guys, ever heard of user-generated content…

Andrew sees the market for 3D environment vendors to be akin to the nascent cable market. He sees Second Life as focusing on the older sci-fi demographic whereas they are angling to be the 3D MTV, with Habbo Hotel the Nickolodeon. Neat analogy.

At Yoick we agree that these interactive spaces will act mostly as a connection manager (the first C in CICS), at least initially, and we also agree that they will reach similar sizes as MySpace.

Venture guy, serial entrepreneur and chairman of Second Life, Mitch Kapor said in an interview at the World Economic Forum in Davos that he sees virtual worlds as being a $100 billion opportunity.

When the PC was invented, nobody anticipated the spreadsheet, which I was very involved with, when the Internet became commercial nobody anticipated Amazon.com or eBay, and I have the same conviction that these virtual worlds are going to have killer applications that will just make it a huge industry.

Right on, Mitch.

It doesn’t take a rocket scientist to note that Second Life is vastly different from World of Warcraft. But Clay Shirky has stated the obvious — the one is a platform with fascinating in-world effects, the other is a multi-player game.

Clay believes that we shouldn’t be comparing the two. With this point I agree. Games are games, they involve quests, levelling, the magic circle metaphor and in some instances, the thing that has given rise to their popularity - guilds (the ability to work as a team). They also include a range of negatives - shards and lag.

Second Life is a 3D persistent environment - it does not per se have games or quests and is more focused on allowing its residents to achieve status through the acquisition of status symbols — land being the primary one, but stuff in general. It is very individualistic, but contains social elements - residents can communicate amongst each other, albeit currently on a rudimentary level, and they can collaborate on building items, again at a rudimentary level.

Similarly to games, Second Life has downsides such as lag and severe limitations on the number of residents that can visit an inworld place at any one time.

In terms of comparitors, Second Life should be compared to other forms of online social media such as MySpace and Cyworld. These social media plays have had massive adoption - why: they pander to our innate desire for CICS (Connect, Interact, Create and Share), they are easy to use, are extremely viral and, in particular in the case of MySpace, have an open architecture - I can visit your MySpace page and watch a YouTube video.

Second Life doesn’t rate as a social media play. Linden Labs may have open sourced the SL viewer, but their product is far from open or viral. It is not intuitive to navigate inworld and creating and sharing are hard things to do. Just as a newb user gets comfortable she starts to experience massive client/server induced lag and SL crashes. Oh well, she sighs, I tried that…now back to social networking.

I agree with Clay that games are not going away any time soon, in fact as a form of pure entertainment…they rock. 3D persistent spaces, however, are categorised in the virtual world arena for now, but should be compared to other forms of social media.

In fact, at Yoick we strongly believe that as social media the right combination will lead to massive Skype-like adoption. Stay tuned for our persistent 3D environment - we are on the cusp of emerging from stealth…

In venture news this week, professional networking site, LinkedIn, has raised $12.8 million from Bessemer Venture Partners and the European Founders Fund. The post money valuation placed on the Palo Alto company was a cool $250 million.

The funding will be used to allow them to experiment with new products. They’ve recently been trialling LinkedIn Answers - a user gets to ask her contacts business questions - and launched LinkedIn Experts earlier this month - users can submit requests to experts for advice.

Seattle-based kids online learning company, Headsprout, has raised $8 million from Kaplan, an educational company, to focus on putting an end to illiteracy. The company was set up in 1999 and initially raised funding from Sofinnova Ventures, the Raisin Fund and Roser Ventures.

On the acquisitive front, News Corp. is reported to be making a $12 million investment into ROO Networks, a listed company that provides digital video solutions. Michael Arrington has picked up on the fact that this is not through Fox Interactive - who, he says, have been having separate conversations with Brightcove, a competitor to ROO.

Former Fox Interactive head, Ross Levinsohn must be shaking with laughter.

Fox is also said to be in talks to acquire ad optimisation company, Strategic Data Corporation.

If the Global Peace Index were to apply not only to countries, but also to companies, Google would be joining China at the very bottom ranking.

No-one should’ve felt comfortable with Google’s decision to entertain the censorship demon that is China back in 2005, but Sergey Brin’s recent comments at Davos just scored them a big fat zero.

In answer to a question whether he regretted Google’s decision to modify its search engine when they launched in China, Sergey said, “On a business level, that decision to censor…was a net negative.”

Hang your head in shame, Sergey. From a business point of view, Google.cn has been a disaster - get over it. Correct your status as a brand that stands above evil or be done — you are already on a slippery slope.

Michael Arrington sums up the feeling out there…Google isn’t saying they regret the decision because it was the wrong thing to do, and helps prop up a government that continues to violate the human rights of its own people…Google needs to say they regret working with the Chinese government because that government is evil, not because it turned out to be a ‘net negative’ business decision.

Benchmark Capital Partner, Michael Eisenberg, has blogged that Google is (rumored to be) working on turning Google Earth into a virtual world a la Second Life.

Benchmark is an investor in Second Life, so one wonders at Michael’s motivation for raising such a rumor into the blogosphere — godzilla just walked past my 24th floor office window heading north?

Michael notes the language on the Google Earth website - one more step to creating a life-like 3-D model of the whole planet….message to the Googleplex - we’ve already got one earth, so why do we need yet another virtual earth… what we need are better ways to connect, interact, create and share and doing so in 3-D is uber-cool.

Matt Marshall sees such a move by Google as an opportunity for them to act as virtual central bankers. A bit of a stretch, but an interesting one nevertheless.

UPDATE: The GigaOM has more to say on this, pointing to the possibility that Google is working with a company in China to build the avatars.

It’s shaping up to be another busy week in venture land:

* Kiptronic, a podcasting ad network company which has a marketplace of 47 million available downloads, has raised $4m in Series A funding from Blueprint Ventures and Prism VentureWorks. The existing angel investors who tipped in the seed round of  $400k, also contributed.

* Wikio has raised $5.3m in Series A funding from Lightspeed Venture Partners and Gemini Israel Funds. Wikio is best decribed as a mashup of Technorati, Digg and Google News and is based in Luxembourg.

* Private equity firm, Kohlberg Kravis Robert is reported to be investing $700m into Sun.