Category: Virtual Goods

OPW – July 7 – SNAP Interactive operates AreYouInterested which is a social dating service. They’re one of the few public companies in the internet dating arena, so we have insight on their numbers here. I talked with the Founder/CEO Cliff Lerner.

How are things going?
Things are going very well. We've been growing our mobile application, our website and our Facebook application. Earlier this year there were a lot of Facebook changes that we had to navigate around and I think we did a very good job. I'm very happy with where we are as a company right now.

What were the changes that most affected you?
All of the communication flow on Facebook changed – the viral channels, the algorithms on posting to the wall and the notifications were all removed. There are probably some more that I'm forgetting. Fortunately, however, we never really saw any negative impact from any of the Facebook changes and our subscription revenue has actually risen steadily throughout 2010.

As a matter of fact, they helped us pretty significantly. We now have direct contact with our users via email. We now require our users to give us their email when they install our products, which we weren't able to do before. So that alone gives us an easier way to communicate with them directly.

How many brands do you have at this stage?
For starters, we actively support AreYouInterested.com, which consistsvof the iPhone application, the AreYouInterested.com website and the AreYouInterested Facebook application. We have a few other brands thatvwe also support and maintain, including FlirtWithMe and MeetNewPeople. However, we aren't actively building new features on these brands. We have a few apps on MySpace, Beebo and Hi5 as well.

I noticed that with the MeetNewPeople application you're at 4 million installations and with AreYouInterested you're over 13 million at this stage. Yes, MeetNewPeople is pretty close to 5 million and AreYouInterested is over 15 million at this point.

How do you do it?
It had a lot to do with really good timing. We launched very early on the Facebook platform when not many companies knew about this and a lot of our growth occurred at an earlier stage. Since then we've been very focused on metrics. We are still growing virally and up until December of 2009, all of our growth was in fact viral growth. But since then Facebook has made it more difficult to grow virally, so we've been focusing on adding new features and buying traffic to coincide with our conversion to a subscription model. So far it has been working very well.

How much of your user base would you say is primarily mobile compared to your online user base using laptops and computers, percentage wise?
I'd say a couple of percent. At this point we only have an iPhone application and we're strongly considering building a mobile application for other devices. However, for the iPhone we have over 150,000 installs and we get about 40,000 sessions per day. What I find most encouraging and interesting is that the average user logs in spends over 30 minutes per day on our iPhone application.

An iPhone user can seamlessly interact with someone on our Facebook app or the website. So we have that critical mass of users on the iPhone. The user accounts are also integrated, so you can sign up on our Facebook application and download and use Facebook Connect on our iPhone app as well. Specifically, all of your information is the same and you can interact and navigate from either of your accounts.

We haven't done any traffic buys on mobile yet. That is something we're going to consider in the future. Right now we're looking at mobile really as gaining as much market share as possible, and learning what users want to do on a mobile dating app. We recently launched a couple of premium features. For example, we've implemented virtual gifts, which are doing very well I might add, the ability to send pictures along with your message and the ability to see who views your profile.

Are there any user behaviors that have surprised you with the addition of the virtual gifting?
We built a pretty sophisticated virtual gifting system earlier this year and it's been very successful for us. We offer users the ability to buy gifts one at a time or get unlimited access with a subscription. We have gifts that cost as little as $1.50 and go as high as $50. We actually sell a few $50 gifts every day. Naturally, people spend money on these gifts because they're much more likely to get a response and it's much more engaging.

Who would you regard as the toughest competitor?
I don't really view traditional dating sites as competitors. So I would have to say sites that are built on top of the social networks such as SpeedDate, HotorNot and Zoosk. But I don't really view them as traditional competitors either because a lot of our features are built on top of Facebook. There are really only a couple of applications out there (including AreYouInterested) that have a critical mass of users on the social networks and critical mass is obviously key to dating. So at the end of the day, I would say as long as the social networks can continue to grow and build tools and features that allow us to grow on top of them, we'll continue to be in a very good place.

Among your competition, who would you say you are the most inspired by? Who do you keep the closest eye on?
There have been a few companies recently that are getting more into dating through friends of friends. I definitely keep an eye on them. It's not as important to keep an eye on the competitors as it is to keep an eye on the social networks in general. For example, what direction are they heading in? What communication tools are they going to allow us to use? MySpace, for instance, has recently become a lot more developer friendly. So keeping an eye on social networks is much more important to me than what our competitors are doing.

Have you got any plans for SMS?
Not at this stage. We're relatively new to the mobile space and just now starting to develop our gameplan.

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