Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
QPSA Games Update 4/27/11
WONDERFUL CITY ON FEATURED
Wonderful City popped up on the Featured Games list this morning, so it may start attracting more people. Poker Place has been removed from Featured to make room for it, so again it looks like they’re keeping Featured at 10.
BETA
I tried to play both Wonderful City and Green Farms, both of which are in beta. They both crashed very quickly. Wonderful City crashed twice. I thought beta was to get feedback and look for the rare glitch….
ECOMAS
I also played a little with Ecomas. When you open the game, you see a scratch-off card which becomes a picture of an animal. You can keep the card or you can “gift” it. When you collect enough cards for the month “AHMSA commits to physically plant one tree” and you’re entered in the monthly prize drawing. You can get more cards by inviting Quepasa friends to join or by sending a Tweet or a Facebook comment with a link back to the game.
So, ostensibly it’s about planting trees. But if AHMSA wants to plant trees, they can go ahead and do it. So, as far as I can tell, the main purpose of the game is to let people know about the environmental work AHMSA is doing. Presumably it will also attract a few people to the prize drawings on Quepasa, Facebook, and Hi5, where it is played.
That’s it, as far as I can see. There’s really nothing to the game except the pretty animal pictures and a little social interaction if you the “gift” the cards. But you learn nothing about the environment. There is no info on the cards by which you might learn about the animals pictured or how to help them. There’s no information about trees or how they will help the environment in Coahuila, where AHMSA will be planting them. There’s not even any information about how AHMSA is doing in actually planting the trees except that if you click “Learn more about the initiative” you’ll find a description of AHMSA’s environmental projects, including this tree-planting project. There it says that the nurseries are expected to be put into operation during the first half of 2011.
GOODGAME MAFIA
Goodgame Mafia's spurt a couple of weeks ago seems to have petered out.
SMAP ME UP
Average daily sign-ups for the week are still in the mid-50k per day.
Daily Averages
56,910 - week ending 3/23
60,629 - week ending 3/30
61,082 - week ending 4/06
47,449 – week ending 4/13 (x 31 = 1,470,919 per month)
55,995 – week ending 4/20 (x 31 = 1,745,835 per month)
56,921 – week ending 4/27 (x 31 = 1,764,542 per month)
adelevet, it’s an interesting point about needing to attract financing. But when I say “good movie” (or when they say “good movie”) I don’t think anyone means a movie that has no box office appeal. They certainly don’t want something that is an artistic success but boring. The whole point of the Winter’s Bone example is that the movie succeeded because it was good and it was intelligently rolled-out. It didn’t have stars, it had quality.
One of the appealing things about the strategy as put forth in the SHM is that it appears to be a sound strategy. “But the reality is if you have a good movie and you put it in the right theatre, you’ll start to create some buzz, you’ll start to create some word of mouth and then you can expand, or stop if necessary, before you go to DVD and Blu-ray.”
In other words, they would be looking for good reviews and word-of-mouth to generate an audience, which makes a lot of sense because, as we know, TDGI is not able to spend a lot on advertising. So you get a good movie, a promising movie, you put it out there slowly and intelligently and see if you can develop an audience. If not, you go to DVD without having expended a great deal of money.
As to your statement, “some wavering off that ideal is not exactly surprising” that is also a good point. I don’t mind if they jump on an opportunity that doesn’t meet the criteria of their basic plan, but the statement from the recent meeting indicates that they now have a whole new idea, an idea not very well thought out. “More significant titles with greater commercial appeal.” What does that mean? Bigger budgets? Flashier?
A third point you make is also interesting. “That this whole company is a rather organic process and not a linear model has become quite clear over time.” What a kind way of putting it.
Re: Change in Direction
As you quote from the recent meeting minutes:
As we continue to grow as an independent distributor, we will be focusing our release activities on more significant titles with greater commercial appeal.
At the Jan 15 meeting it seemed TDGI would stick to lower budget films and open in select areas for starters, it seems like looking for bigger productions.
“At the same time that we were learning these painful lessons about theatrical releasing, we were also watching a film that we passed on at Sundance, called Winter’s Bone. And the conventional wisdom if you’re a DVD company or a book publisher and you’re just getting your toe in the water of theatrical releases is, “Hey lets go for films with big stars.” And we went for Twelve. Racing Dreams didn’t have stars because it was a documentary. Winter’s Bone didn’t have stars at all, and we thought it was a great film but we just thought, “Oh, gee, maybe we’re jaded, maybe we know too much about the Ozarks, maybe we like it more than the average audience will like it because, you know, we know people like this.” And so we didn’t really pursue that film. And as – and what they did, that we think is a really, really smart strategy for certain kinds of films, is they opened New York exclusively. And they had two screens. I think they had the Lincoln Plaza and they had the Angelica Film Center, and they did huge business. And then they expanded to Chicago and L.A., so they had New York, L.A., Chicago. Continued to do huge business. And over the period of the next three months, they expanded from two screens in New York to about 150 screens, and they’ve ended up playing all across the country. They did about $6 million at the box office with less than a million dollars expenditure, at least that’s what we’re told. Cause we don’t know exactly what they spent but we were told by somebody involved in the production that that’s what they spent. And then they came out on video through Lionsgate and it was a huge, huge video release. So we’re sitting here saying, “OK, you know what, that could have been us and we thought because there weren’t stars that it was not a smart move to do.” But the reality is if you have a good movie and you put it in the right theatre, you’ll start to create some buzz, you’ll start to create some word of mouth and then you can expand, or stop if necessary, before you go to DVD and Blu-ray. And that’s kind of what we’re going to be talking to you about for 2011.”
QPSA Games update 4/20
“PLAYER” OR “SIGN-UP” DEFINITION
I finally got into the site after months of trying. (Cookies were the problem.) I see that you only have to click on the title of a game or the photo – in my case, just to take a look – and you are signed up as a player and it goes on your “My Games” list. You can delete titles from your list, but if you don’t, you’re counted as a player. Just by looking around for a little while, I inadvertently got six games on my “My Games” list.
WONDERFUL CITY
Wonderful City had 152 sign-ups at 11:34 a.m. EDT on Wednesday. This morning at 11:37 it was at 867. At 5:20 p.m. it was 1,027.
Wonderful City is not yet on the Featured Games page. Lil' Brownies seemed to jump up when it was added as a Featured Game a couple of weeks ago.
SMAP ME UP
Average daily sign-ups for the week are still low at 55,995, but are up from last week’s dismal 47,449.
Daily Averages
56,910 - week ending 3/23
60,629 - week ending 3/30
61,082 - week ending 4/06
47,449 – week ending 4/13 (x 31 = 1,470,919 per month)
55,995 – week ending 4/20 (x 31 = 1,745,835 per month)
“Listing” requirements vs. “eligibility” requirements.
Thanks for including the link.
You needed to scroll down further. There are no “listing” requirements because companies are not “listed” on the OTCBB, the OTCBB being merely a “quotation service.” There are, however, "eligibility" requirements. Also "filing" requirements. (I guess they’re trying to confuse us.)
http://www.otcbb.com/faqs/otcbb_faq.stm#Listing
LISTING AND ELIGIBILITY REQUIREMENTS
What are the "listing" requirements for the OTCBB?
Because the OTCBB is a quotation service for FINRA Market Makers, not an issuer listing service or securities market, there are no listing requirements that must be met by an OTCBB issuer. Accordingly, there are no financial requirements and there is no minimum bid price requirement.
Are OTCBB companies considered to be "listed"?
No, the OTCBB is not an issuer listing service, and there is no listing agreement between either the OTCBB or NASDAQ and the issuer. There are, however, certain requirements an issuer must meet in order for its securities to be eligible for a market maker to enter a quotation on the OTCBB.
What are the eligibility requirements for the OTCBB?
In order for a security to be eligible for quotation by a market maker on the OTCBB, the security must be registered with the Securities and Exchange Commission (SEC) or other federal regulatory authority that has proper jurisdiction (see below) and the issuer must be current in its required filings with such federal authority.
Domestic issues quoted on the OTCBB are limited to the following securities:
o securities of issuers that make current filings pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 ("Act"); ….
http://www.otcbb.com/faqs/otcbb_faq.stm#filing
FILING INFORMATION
What are the filing requirements for being on the OTCBB?
Issuers of all securities quoted on the OTCBB are subject to periodic reporting of financial information to the SEC, banking, or insurance regulators…..
According to Eric at SHM they need only two years of audited financials to uplist. But the clarity of the Target status when they merged may affect moving up also. Maybe that’s what you are referring to? I would think clearing that up, while possibly a big job, is not the equivalent of needing 2008 audited financials, although I don’t know for sure. But it certainly makes sense for them not to do 2008 if they don't have to.
From the SHM (see post #64495)
SHAREHOLDERS’ MEETING
Probably about minute 50:
ERIC. And I think it’s important for everyone to note that we see the audit as a critical step to becoming fully reporting, so that we have additional opportunities for the company. There’s been a tremendous amount of discussion about the benefits of moving to a higher exchange. And that certainly is a door that opens for us as soon as we get those audits done. And, you know, we are a very small company with staff right now. As Fred pointed out, we do intend to add some staff on in the first quarter that will help free up Fred and I to concentrate more on managerial things and maybe less on day-to-day tasks that would involve the fully-reporting aspects of running a public company. But we’re at the final – I mean the library valuation was something that was the last huge hurdle and it was a very difficult task because of the changing marketplace for Blu-ray and Video on Demand and the lack of a general history within the industry to base projection numbers on those particular formats. So it was a challenge and it took a lot longer than we thought.
Now, when we talked last summer about having an audit, we were talking about a totally different audit than what we are doing now. We were talking about the prospect of taking certain elements of the company, certain assets, and that particular venture was the 2010 assets, and rolling them into an existing Bulletin Board company. And under that scenario all we would have needed to do was an audit of those particular items. As we got further into the discussions with that venture we realized it wasn’t to the benefit of the company and to the shareholders so we decided not to do that. So then we said, “OK, let’s take that hat off and let’s go back to not spinning off assets to another entity but just becoming fully-reporting, and what do we need to do.” And you need to have two years of audited financials, and so we started with 2008, 2009, had a stale library valuation, and no basis to develop the Target side, You know, it’s one thing to say it’s a zero basis company, but you still have to have something to back up for an auditor. And now we have 2010, so we now have potentially three years of audit. But Hogan & Taylor is going to concentrate on 2008/2009.
++++++++++++
About minute 1:27.30
Q. From a shareholders perspective, I already understand that it may be as soon as a couple of weeks to get a blessing from Hogan & Taylor on the financials ______ approved for audit. That will bring us up to current reporting on the Pinksheets. Other than that, are we looking forward to at least maybe moving up to the Bulletin Board somewhere in the near future, maybe in this first quarter?
ERIC. The question is the timing of the audit and what the company’s plans are for taking steps to move to a different exchange. Without a doubt, the day after we have Hogan & Taylor’s final audit approval, we’re going to report those to the Pinksheets and file them with the SEC. We have engaged an attorney who’s helping us with our registration statement. There is a possibility that we will be able to quickly proceed with that, but there’s also a possibility, and this is a concern of ours, the history of Target Development Group may result in a lot of SEC questions because it passed through several different entities before they joined us. And we hope we don’t get beat to death with footnotes and questions from the SEC. We’re hoping that the full audit and the clean and transparent way we’re running the company now will carry some weight and that we’ll be able to have that as an option. Fred and I want that. We want the company to become fully reporting. We want to file the registration statement so that we can move up. It’s not up to us to move us up though, but it’s up to us to take the steps that would qualify us.
Riggs Column in Algae Industry Magazine
There's an article by Riggs in Algae Industry Magazine about bio-capture plus info on how wastewater treatment facilities fit into the picture.
“Algae’s Killer App”
“The best place for a commercial-scale algae facility is next to a power plant that emits large amounts of carbon dioxide. The very best place is next to a power plant that is also near some sort of wastewater treatment facility that has access to fertilizer run-off water. That’s in theory. In practice, it’s all driven by politics.”
http://www.algaeindustrymagazine.com/algaes-killer-app/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+AlgaeIndustryMagazine+%28Algae+Industry+Magazine%29
Also, this is the first of a monthly column:
“Editor’s note: We are very pleased to present our new monthly columnist, Riggs Eckelberry, who many of you know as the CEO, Chairman and lead entrepreneur behind OriginOil. Riggs has an extensive background in business development over several industries, and has an especially keen eye for how the various parts of the algal industry relate to each other and can be optimized. Beginning with this installment, Riggs will focus on key business areas in the development of our industry, drawing on both direct experience and his astute observations. Welcome, Riggs!”
QPSA Games Update 4/13
Doodle Blogger has been knocked off the top 20 list by Lil’ Brownies. It looks like adding Lil’ Brownies to the Featured page helped it move forward.
Goodgame Mafia is still getting stronger. Satisfashion is still getting weaker.
The SnapMeUp daily average sign-ups are much weaker this week.
Total Sign-ups
15,266,201 4/13
14,934,059 4/6
- - - - - -
332,142
7 Divide by 7
- - - - - -
47,449
= = = = = =
Daily Averages
56,910 - week ending 3/23
60,629 - week ending 3/30
61,082 - week ending 4/6
47,449 – week ending 4/13
47,449 x 31 = 1,470,919 per month
Collaboration with GE Healthcare gets rolling
Today’s PR:
iBio to Join GE Healthcare Bioprocess Tour
Press Release Source: iBio, Inc. On Monday April 11, 2011, 12:21 pm
NEWARK, Del.--(BUSINESS WIRE)-- iBio, Inc. (NYSE AMEX:IBIO) today announced that Terence E. Ryan, Ph.D., iBio’s Senior Vice-President, will represent iBio in joint marketing presentations with representatives of GE Healthcare as part of the GE Healthcare Bioprocess Tour in Taipei, Shanghai and Beijing beginning today and extending through April 15. This series of presentations is the first international business development initiative under the joint marketing agreement announced September 1, 2010 by iBio, GE, and Fraunhofer USA Center for Molecular Biotechnology (CMB).
Dr. Ryan will describe the iBioLaunch™ Platform for the expression of recombinant proteins in whole plants for subunit vaccine and biotherapeutics applications, and scientists from the GE Healthcare site in Uppsala, Sweden will present their latest advances in downstream protein purification, highlighted by their advanced chromatography matrices and chromatographic equipment.
The iBioLaunch plant-based technology enables the production of vaccine and therapeutic proteins at substantially lower capital and operating costs than are possible with other technologies. GE Healthcare has developed solutions and offerings including those which enable customers to build processes and facilities based on single-use and ready-to-use technologies.
In the collaboration with iBio and CMB, GE Healthcare will supply bioprocessing products and process expertise for integration with the iBioLaunch platform. The manufacturing solutions covered by the agreement include product licenses, technology transfer services, design of upstream and downstream manufacturing processes; supplies of equipment, consumables and related validation support, construction of buildings, facility operations and related financial services.
September 1 PR:
iBio and Fraunhofer Execute Business Development and Marketing Agreement with GE Healthcare
NEWARK, DE, USA ; Uppsala, Sweden: September 1, 2010 – iBio, Inc. (OTCBB: IBPM), its development collaborator, Fraunhofer USA Center for Molecular Biotechnology (CMB), and GE Healthcare, a unit of General Electric Company (NYSE: GE), today announced their entry into an agreement to jointly develop and globally market manufacturing solutions for biopharmaceuticals and vaccines based upon their respective proprietary technologies.
Financial terms are not being disclosed.
This new business initiative combines the value of GE Healthcare’s capabilities and worldwide presence in life sciences, iBio’s highly efficient iBioLaunch™ plant-based vaccine and therapeutic protein manufacturing platform, and CMB’s advanced vaccine and molecular biology expertise.
iBioLaunch plant-based technology enables the production of vaccine and therapeutic proteins at substantially lower capital and operating costs than are possible with other technologies. GE Healthcare has developed solutions and offerings including those which enable customers to build processes and facilities based on single-use and ready-to-use technologies.
In this collaboration with iBio and CMB, GE Healthcare will supply bioprocessing products and process expertise for integration with the iBioLaunch platform. It will also support the development of products based on the IBioLaunch platform and product offering.
The manufacturing solutions covered by the agreement include product licenses, technology transfer services, design of upstream and downstream manufacturing processes; supplies of equipment, consumables and related validation support, construction of buildings, facility operations and related financial services.
“This is an exciting development in GE Healthcare’s strategy to deliver more efficient and costeffective biopharmaceutical and vaccine manufacturing technologies,” said Peter Ehrenheim, President and CEO, Life Sciences, GE Healthcare.
“We expect this relationship with GE Healthcare to accelerate and broaden market penetration for our technology through access to GE Healthcare’s existing relationships and its skill and experience with project implementation and process development,” said Robert B. Kay, Chairman and CEO of iBio. “This is another implementation of our model to affiliate and outsource with best-in-class collaborators like GE Healthcare and CMB as the fastest and lowest risk path to revenue growth.”
”We have already done considerable planning and work with GE Healthcare to prepare for implementation of this agreement,” said Dr. Vidadi Yusibov, Executive Director of CMB and Chief Scientific Officer of iBio. “Therefore, we expect this relationship to start quickly and continue long after its initial three-year term to provide important results for our collective customers as we combine GE Healthcare’s products, skills and relationships with the technology we developed and are implementing in our new Delaware facility.”
Statements About the Audit at SHM
To iHub: this is my work from a publicly webcast meeting.
With the continuing comments about the audit, I thought it would be useful to have a transcript of what Fred and Eric actually said about the audit at the Shareholders Meeting. The long discussion starting at about minute 46 also includes a lot about the library and cash flow.
http://www.ustream.tv/recorded/12031352
45:55
ERIC: I have from e-mails four questions already and I’m – but Dan has a question.
Q. Yes, John [?] would like to know when the audit will be completed.
ERIC. That was our first question.
FRED: That’s the number one question on almost every phone call, every e-mail, and already today. So…
ERIC: That’s ____ .
FRED. And I – we both have answers to that. Let me at least say what I think. I’ve been primarily – the one primarily dealing with the auditors and the accountants. And there’s been a certain amount of starts and stops and changing direction, both based on the information that we’ve been asked to provide and also based on the advice and the consultation and the discussion between our securities counsels and our accountants and the auditors. That the type of audit has been discussed and changed a couple times, number one. Number two, the starting point for the audit in 2008 is still a bit of a sticking point for the auditors and for our separate independent accounting staff. And…
ERIC. And we’re talking about the starting point not for Hannover House…
FRED. Right.
ERIC. … but for Target Development Group. Because when we acquired what was purported to us to be essentially a shell company with some assets – well, it’s not a shell company – we were not given tax returns, we were not given bank statements, we were just said, “It’s a zero company.” Now, that may be well and good but when you’re trying to do an audit, the auditors want to make sure that there either isn’t a tax liability that hasn’t been disclosed, or maybe a tax loss carryforward that needs to be reported and carried forward into the new venture. So we have had difficulty in getting that zero basis, and I just wanted to explain what he meant by the starting point.
FRED: The Hannover numbers are certainly available. Now when we started the audit process they weren’t available necessarily in the format that the auditors wanted them, but the raw numbers were there, and they’ve been developed and put in a proper format by our accountant before going to the auditor. The auditors still have some questions, although I think that they have the information now, at least our accountant has the information to provide to the auditors to answer all of those questions. So…
ERIC: And then finally the last big piece that was holding up the audit was our library valuation. We had, at Hannover House, a very extensive library valuation done by a highly-respected expert in the field, but it was 12/31/2008. And when we’re asking Hogan & Taylor and Josh Estes, who’s our review accountant, to make that a balance sheet item, they’re saying, “OK, it’s two years old, arguably two and half years old now. It doesn’t take into account Blu-ray, it doesn’t take into account that the DVD market had declined, it doesn’t take into account that Video on Demand has emerged. Some of your titles have fallen out, some of your titles have been added in but you haven’t put them in.” So we were required to do a new library valuation, and we finally had this library valuation that is reflected in the Q4 numbers. You’ll see that the value of the library has changed between Q3 and Q4 to accommodate things that weren’t in it before, such as Twelve, and Racing Dreams, and Chelsea on the Rocks, and new book titles and new DVD titles that weren’t part of the old library, as well as a decreased number for our DVD projections on a going-forward basis. And then they added in new numbers for Blu-ray, Video on Demand, and the – we have a very top industry, highly-respected company that has done the library valuation, and they will be writing the opinion letter that will be posted to the Pinksheets verifying that.
Q. Is that something that the auditors can still question ____ those numbers are the numbers that can be used ______.
ERIC. Yeah, the auditors are allowed to question the library valuation cause it’s the biggest balance sheet item for the company. That’s why we have had three separate highly-respected groups verify the library valuation report. A library valuation is based upon the historical performance of a title over the previous two or three years and a reasonable expectation of how it will perform over the next five years based upon its history. Some titles that haven’t been released yet or don’t have a past history are entirely projection-dependent, and that’s why you need to have somebody who has been in the industry for a long time, that’s not a manager of the company, that can say, hypothetically, “I think a Tom Cruise movie is going to do this, this, and this based upon his other Tom Cruise movies.” And that extrapolates out into a number that can be discounted and added to the valuation of the company’s library.
Q. Is there any debate about the numbers on the part of the auditors at this point?
FRED. Not at this point.
ERIC. The only debate was that the library was stale and that we needed a fresh opinion.
Q. So when will you know whether that _____ or if there are questions?
FRED. Oh, I think that we’ll know very shortly. To get back – and I’m very mindful of the fact – my background is as an attorney – and I’m very mindful of the fact in some meetings people go off and don’t answer the question, and I always want to come back, and now I want to come back, too. Because – come back as best we can. We don’t speak for the auditors. We don’t know, we can’t say when the audit will be finished, but the library valuation was the last significant piece of information that they absolutely, positively needed. So they’ll get that, I’d like to say on Monday, but Monday being a holiday, on Tuesday. On Tuesday I intend to sit with Josh Estes, and depending on Eric’s schedule hopefully he can too, and go through line-by-line, question-by-question, every single item that both he and Hogan & Taylor have asked for, make sure that they have it, and then to follow up probably the week after that, maybe two weeks after, with Hogan & Taylor, and we’ll have a more definitive answer. When we have that definitive answer, we will make that known to all the shareholders. I expect that we’ll have that answer probably the end of January or in early February, and we will make that information known. If I had to simply estimate, I would guess that it would be early spring when the audit would be compete.
ERIC. And I think it’s important for everyone to note that we see the audit as a critical step to becoming fully reporting, so that we have additional opportunities for the company. There’s been a tremendous amount of discussion about the benefits of moving to a higher exchange. And that certainly is a door that opens for us as soon as we get those audits done. And, you know, we are a very small company with staff right now. As Fred pointed out, we do intend to add some staff on in the first quarter that will help free up Fred and I to concentrate more on managerial things and maybe less on day-to-day tasks that would involve the fully-reporting aspects of running a public company. But we’re at the final – I mean the library valuation was something that was the last huge hurdle and it was a very difficult task because of the changing marketplace for Blu-ray and Video on Demand and the lack of a general history within the industry to base projection numbers on those particular formats. So it was a challenge and it took a lot longer than we thought.
Now, when we talked last summer about having an audit, we were talking about a totally different audit than what we are doing now. We were talking about the prospect of taking certain elements of the company, certain assets, and that particular venture was the 2010 assets, and rolling them into an existing Bulletin Board company. And under that scenario all we would have needed to do was an audit of those particular items. As we got further into the discussions with that venture we realized it wasn’t to the benefit of the company and to the shareholders so we decided not to do that. So then we said, “OK, let’s take that hat off and let’s go back to not spinning off assets to another entity but just becoming fully-reporting, and what do we need to do.” And you need to have two years of audited financials, and so we started with 2008, 2009, had a stale library valuation, and no basis to develop the Target side, You know, it’s one thing to say it’s a zero basis company, but you still have to have something to back up for an auditor. And now we have 2010, so we now have potentially three years of audit. But Hogan & Taylor is going to concentrate on 2008/2009.
FRED. That’s right.
ERIC. Josh Estes was an auditor at Hogan & Taylor, recently left the company to become his own CPA firm, and he is our review auditor, I mean review accountant.
FRED. Right,
ERIC. And so he’s doing all of the prep work, which will make it very easy for Hogan & Taylor to bless. So we think that it’s going to be as quick as possible. Yes.
Q. Are we going to see a 2008 audit being released first, and then a 2009 _______ one big package?
FRED. I think one big package. That’s how I…
ERIC. By the way we’re supposed to repeat the questions for the…
FRED. Oh, sorry.
ERIC. The question was, are we going to get a 2008 audit first, later on a 2009, later on 2010. And Fred was answering that.
FRED: My understanding is that it will be 2008/2009 together as one audit, and that’s what we’ve been pointing towards. But again I’m not an accountant, I’m not an auditor. If it’s different than that I will try to find out and let you know.
56:20
Q. Speaking of the library valuation, you had mentioned you had three independent_______ file a letter.
ERIC. That’s right.
Q. Are you able to comment on ________. _________ Hogan & Taylor doing the audit _________.
ERIC. Yeah, you know, there’s – two of them are individuals and one of them is a firm. And the firm that’s, and I’m not even sure what he calls his company, it will be above reproach when you find out the individual that is doing the final audit evaluation. He’s a film industry executive that has over 25 years experience. If I told you his previous positions you would know who it is. But suffice it to say he was president of one of the largest video retail chains, and later on became president of a substantial independent studio. And we’re very happy that – to have somebody with his caliber of history and experience to validate our projections. And it hasn’t been a cakewalk. There’s been a tremendous amount of back and forth discussions as to, “Why do you think you’re going to do that?” And In most cases we had to drop the numbers. In other cases this person was saying, “Have you thought about taking this item to this particular retail account?” And we said, “No, we didn’t know that that retail account carried video.” And that person not only has done the library valuation report but also said, “Here’s the guy to call and maybe that number’s going to be a little bit higher than you’ve got projected there.” So
FRED. Let us do two things before we give that information. First, check with the person and get his permission. Secondly, get it to Hogan & Taylor and get their permission to release that information.
ERIC. Yeah. We – because it’s such a huge balance sheet item, we knew that it would take an opinion letter from someone whose experience is above reproach. It couldn’t just be a video store clerk at you know, you know – we had to get somebody with great experience. Doug, did you have a question?
Q. Someone did ask what the final library valuation is. We also need to repeat questions.
ERIC. OK. The question was what is the library valuation report as of this moment. And it’s still subject to possible adjustments by Hogan & Taylor. It’s $24,276,709. And that covers a lot of items, possibly over 200 items. And I can’t – we’re not authorized to distribute the library in its form right now for a variety of reasons, not the least of which is that we still need to have the final opinion letter, but you’re welcome to look it over while you’re here. 228 items covering DVD, Blu-ray, theatrical, Video on Demand, international, television.
FRED. Is yours a follow up?
Q. Short question ________ as of this moment not as of the end of 2009?
ERIC. That is as of this moment, but we do have it as of the end of 2009. We already have that. There’s going to be an adjustment from what we previously reported in 2009 because these numbers changed. And so, the 2009 library valuation report is going to be reduced, we know that. And it’s going to be reduced because DVD numbers in 2010 have already proven to not be what we thought they were going to be. And so, that’s – when you’re retroactively dong an audit you have the wisdom of having actually gone through that timeframe. And we now had to adjust our DVD numbers down for 2009, which has impacted 2010 and the next four years. Yes.
Q. To stick with the audits. For clarification’s sake, has cash flow been any issue as far as getting the prepaid amounts to Hogan & Taylor or ?
ERIC. Cash flow – the question is, with respect to the audits, has cash flow been an issue with regard to Hogan & Taylor. Absolutely not. We do have daily cash flow issues.
FRED. We have cash flow issues for other reasons but not for that.
ERIC. We have cash flow issues. Yeah. I mean, a nd every dollar that comes in we immediately re-invest it in either payables management, operations, or new titles. So cash flow is an issue for the company but it’s not an issue with Hogan & Taylor. And really, the issues have been the starting point for Target Development Group and the library valuation. Other than that it’s just basically, “Give us your QuickBook’s backup of payables/receivables. Let us see your producer reports, what are your” you know, those kind of housekeeping issues.
Q. ______ just for clarification’s sake because a new company with a cash flow not being quite where you want it _________ I was wondering if that might have been holding us up a little bit.
FRED. Not at all.
ERIC. Hogan & Taylor has made a very fair price quote for us and it hasn’t been an issue.
Q. Great.
ERIC. Yes.
Q. Is it a fixed price?
ERIC. It’s not a fixed price, but there’s a fixed base price that is reasonable. And part of the reason why we want to have the review audit done – the review accounting done by Josh is so that we don’t go into overages.
FRED. I will say that when I asked for a fixed price with the auditors, they pretty much laughed. So…
ERIC. You know, they’re saying if everything is smooth, it’s this price, and if we have a whole bunch of questions and issues then it’s going to be more. So we’re reducing those questions and issues by having it done by a review accountant.
FRED. ______, you had a question.
Q. Is there a prepay with Hogan & Taylor? What are your terms or your relationship with _____?
FRED. The question is whether we’ve prepaid. No, we have not prepaid. Honestly, they have not sent us an invoice. We have an engagement letter with them that does talk about our payment schedule with them. We have – we’re in constant contact with them. One of the questions, not questions, but one of the points of discussion is always, “Where do we stand on the cost of the audit?” And their being comfortable that we’re OK to pay it, and we are. We have no problem with that, they have no problem with it.
ERIC. You know, as they send us invoices, it will be a priority payment.
FRED. Absolutely.
ERIC. You know, we have regular cash flow and we make decisions as managers on a daily basis, you know, which forest fire is hottest. You know, we prioritize. And I wish we could pay every single bill the minute it’s due, but we fortunately have a lot of really supportive vendors, who believe in our business plan, who believe in Fred and I, have extended us substantial lines of credit and just say, “You know what, we trust you guys to pay us when you can. And that’s really – certainly there are some vendors out there that aren’t like that, but for the most part we have a really strong family. And…
FRED. And we stay in touch with them, and they know what we’re doing.
ERIC. Doug, I still have three questions that were asked over the internet that we haven’t addressed, but if you want to ask – present ____. OK, the audit has always been the biggest question that people ask, and the bottom line answer is we have now finally as of now completed everything that we need for the review audit and we’re going to have the meeting with Josh on Tuesday, and within a matter of days thereafter we’re going to be ready to have Hogan & Taylor give us their blessing. Now, how long will they take to give us their blessing depends on how thorough the stuff is that we give them. But we think – we were given a detailed list, and we have complied with that list, and we now have a very legitimate library valuation.
1:03.54
Regarding the library valuation follow-up report, we will find out from the consulting company how they want to be characterized. They are currently also consulting for Warner Home Video, and I’m not sure if it’s the name of the individual or the name of his entity that we paid. So we will find that out and he will issue his opinion. He understands that the opinion letter is the key element of our library valuation announcement. We will post his opinion letter and the bottom line, we probably will not on an individual title basis say exactly how much each item is valued at for proprietary reasons, not the least of which is we don’t want people to know that some of our titles had small distribution fees. You know, as Fred pointed out, our credibility has soared in the last year even though our revenues haven’t soared and we’re now…
FRED. Well, they have soared compared to the starting point.
ERIC. Well. That’s true. But we’re capable of asking for and getting much higher distribution fees so that it improves our bottom line. And if you look at our library and see that in the past this title was a lot less, “How come I can’t get that rate?” We don’t really want to go there. We’re saying, “That’s not an existing market any more. The market now is we have to get this fee.” Doug.
+++++++++++++++++++
About minute 1:27.30
Q. From a shareholders perspective, I already understand that it may be as soon as a couple of weeks to get a blessing from Hogan & Taylor on the financials ______ approved for audit. That will bring us up to current reporting on the Pinksheets. Other than that, are we looking forward to at least maybe moving up to the Bulletin Board somewhere in the near future, maybe in this first quarter?
ERIC. The question is the timing of the audit and what the company’s plans are for taking steps to move to a different exchange. Without a doubt, the day after we have Hogan & Taylor’s final audit approval, we’re going to report those to the Pinksheets and file them with the SEC. We have engaged an attorney who’s helping us with our registration statement. There is a possibility that we will be able to quickly proceed with that, but there’s also a possibility, and this is a concern of ours, the history of Target Development Group may result in a lot of SEC questions because it passed through several different entities before they joined us. And we hope we don’t get beat to death with footnotes and questions from the SEC. We’re hoping that the full audit and the clean and transparent way we’re running the company now will carry some weight and that we’ll be able to have that as an option. Fred and I want that. We want the company to become fully reporting. We want to file the registration statement so that we can move up. It’s not up to us to move us up though, but it’s up to us to take the steps that would qualify us.
FRED. We want to do that on an orderly basis. We want to do it properly so that it’s done and it’s ready when it actually happens.
+++++++++++++++++++
About minute 1:41.50
Q. Is there a timeframe on when the audit will be complete?
ERIC. Again, we’re starting to get into redundancy, but someone asked is there a timeframe when the audit will be complete. That was asked and answered previously. But I’ll summarize it that we have completed the materials including the library that is going to be given to our review accountant on Tuesday. That was the biggest obstacle because it involves changing projections and media streams. And everything else is going to be turned over to Hogan & Taylor shortly.
See posts #3250 and #3278
Abbott said in one of the conferences that people signing up at the site can opt out of SnapMeUp if they want. Aside from that, as far as I know the numbers should match. On April 1 at 1:55 pm there were 14,624,634 SnapMeUp sign-ups.
QPSA Games Update 4/6
There are now 10 Featured games rather than 9. Green Farm and Lil’ Brownies were added, and xFiles was removed.
SnapMeUp daily average sign-ups are up slightly.
56,910 - week ending 3/23
60,629 - week ending 3/30
61,082 - week ending 4/6
61,082 x 31 = 1,893,542 per month
Satisfashion has gotten weaker.
Goodgame Mafia has gotten stronger suddenly this week. I wonder if it is an aberration, whether some advertising was done, or if the game is starting to get some traction. Maybe some games need users to attract other users before they start to grow.
Pokerville has moved from 12th to 9th place, but still has a very small number of sign-ups, 21,482.
The two new games: As of 4/6, Mysterious Tarot had 1,247 sign-ups and Green Farm 2,749.
SnapMeUp as Predictor
I think it’s worth noting that the fall-off in SnapMeUp sign-ups from earlier in the year predicted the fall-off in overall site sign-ups in March. So that’s something to pay attention to going forward.
We had only two weeks of data this time, but next month we’ll have the whole month. I should have picked up the numbers on 3/31, but we’ll be very close. I do have them from the afternoon of 4/1.
Blockbuster: Informative Article in LA Times Friday
It doesn't give details of the auction process, but has some interesting comments on the number of bids expected and the company's value.
http://latimesblogs.latimes.com/entertainmentnewsbuzz/2011/04/bidders-including-dish-network-and-icahn-lining-up-for-blockbuster-auction-monday.html
Bidders including Dish Network and Icahn lining up for Blockbuster auction Monday
April 1, 2011 | 3:10 pm
By next week, troubled home entertainment company Blockbuster Inc. might be in the hands of a famed Wall Street investor, a satellite TV company, a South Korean telecom firm, a group of hedge funds or another buyer.
On Monday, the DVD-rental chain that was once the biggest name in American home entertainment will go up for auction after a planned reorganization under Chapter 11 bankruptcy protection failed when its financial performance deteriorated faster than expected.
Blockbuster has fallen behind fast-growing competitors like Netflix and Redbox, and has been unable to support a nearly $1-billion debt load. The Dallas company will soon find itself with new owners, who will either attempt to revive the brand or maximize profits as its business continues to shrink.
Among the likely bidders expected to take part in the auction are billionaire corporate raider Carl Icahn, satellite TV company Dish Network and South Korean firm SK Telecom. A group of Blockbuster creditors including Monarch Alternative Capital, Owl Creek Asset Management, Stonehill Capital Management and Varde Partners previously submitted an opening bid of $290 million to set a minimum value.
A person close to the process said five to 10 suitors are expected to make offers. Richard Kanowitz, an attorney for Blockbuster’s unsecured creditors, confirmed that more than two bids had already been submitted.
Icahn, who owns a substantial amount of Blockbuster’s debt, will make a bid, possibly with a partner that could help shut down more stores and liquidate some of the company’s assets, according to someone familiar with the investor’s plans.
Icahn previously owned Blockbuster stock and was on its board of directors, but exited by early 2010. Icahn did not return a call seeking comment.
A person close to Dish Network said the company had been in talks with Blockbuster and was considering a bid. The Wall Street Journal reported Friday that Dish had submitted an offer. A spokeswoman declined to comment.
SK Telecom was also interested in Blockbuster as of earlier this week, another person close to the situation said.
Bidders are allowed to make offers only for certain Blockbuster assets, such as its U.S. or overseas stores or its digital business. The company could be carved up, or bidders for different assets could join together.
When Blockbuster filed for bankruptcy in September, its creditors presented a plan to transform its debt into equity, close 500 to 800 of its 3,425 stores and allow it to emerge from bankruptcy by early 2011. That plan valued the company at about $500 million, a knowledgeable person said.
However, after Blockbuster’s financial results over the holiday period were worse than expected, many creditors gave up on the reorganization plan and withdrew a credit facility. Icahn disagreed, leading to his split with the creditors group that submitted the opening bid for Blockbuster.
Chris DiMauro, a managing director at consulting firm Houlihan Lokey who is working with that group of creditors, said they were hoping that the bids would go higher than $290 million but were ready to take control of Blockbuster if needed.
“We are comfortable the assets have a value at least equal to what we are offering to pay,” DiMauro said. However, he added that Blockbuster would have to reorient itself from a business that is “all things to everyone” into one that serves a “niche audience.”
Blockbuster has closed roughly half its stores in the U.S. over the last six months and now has 1,751, a spokesman said.
A new owner probably will have to close more stores to move the company forward, said Ryan Kugler, chief executive of DVA Inc., a seller of used DVDS and other entertainment media.
“There are stores that still do good business with people who don’t own an iPad,” he said. “But that’s probably going to last five to seven years.”
--Ben Fritz
edit
QPSA Games update 3/23 to 3/30
SATISFASHION
Satisfashion’s growth has slowed considerably from last week, which accounts for virtually the entire 9,636 weekly growth drop-off overall for the top 20 games (w/o Snap Me Up).
20 Games Weekly Sign-up Growth Without SnapMeUp
3/23 – 3/30: 29,699
3/16 – 3/23: 39,335
- - - - -
(9,636)
Satisfashion Weekly Sign-up Growth
3/23 – 3/30: 12,329
3/16 – 3/23: 21,948
- - - - -
(9,619)
14,506,487 SnapMeUp 3/30/11
- 9,097,339 SnapMeUp 1/05/11
- - - - - - -
5,409,148
84 divide by number of days in 12 weeks
- - - - - - -
64,395 per day
x 31 for a 31-day month
- - - - - - -
1,996,245 Monthly Site Growth
= = = = = =
60,629 current week SnapMeUp daily average
x 31
- - - - - -
1,879,499 Monthly Site Growth
= = = = = =
QPSA Games Update, 3/16 to 3/23
1. An updated table for the “Popular” Games showing sign-ups for the 7-days from Wednesday 3/16 to Wednesday 3/23.
2. Estimated revenue based on the figures given at the Wedbush Conference, which were the averages for Orkut for last year. (30% of sign-ups become active players, 1.5% of those spend money at an average of $10 per month.) Included is a table showing the number of sign-ups needed to meet TechFront’s revenue projections for the next three years.
This could be viewed in two ways:
DISCOURAGING: “Good grief, they’ll never approach that.”
ENCOURAGING: “If those are their expectations, then we’re bound to be getting many, many more sign-ups as users realize the games are there.”
Harleyman, thanks for pulling all those numbers from the report.
I don’t think that the 2011 and 2012 "Library Summary" paragraphs are in addition to the prior detailed numbers. Below is what I think the report is saying. The first section shows your totals, with one adjustment. The second section shows the 2011 and 2012 Library Summary paragraph numbers. The third section shows Revenue per Share calculations.
Possibly the missing Addendum B would have made it clearer and would also explain the slight discrepancies.
Yes, I checked the 10K and you’re very close.
Per the 2010 10K: “As of February 2, 2011, we employed approximately 76 full time employees, 62 individuals in Hermosillo, Mexico and 14 in the United States….”
Add the 41 developers from TechFront plus any administrative people there, and it must be over 117 now.
Yes, that's good. This gives us a starting point and we can see what kind of monitoring seems to be most useful.
QPSA Games
I’m a little concerned about the plan of relying on games to increase retention. It was surprising to hear that they were not focused on this earlier, but possibly that is not 100% the truth. Possibly they thought that the communities on the site or the “finding new friends” approach (as opposed to communicating with old friends) would be enough to keep people coming back – and they have simply found that that is not the case to the extent they expected.
But what is it that really will distinguish Quepasa from Facebook and Orkut? Not the games, which QPSA is planning to sell to Facebook and Orkut. It’s quite confusing and, I think, a legitimate concern. It will be interesting to see what the major releases are in April and June.
I think in terms of people evaluating us, our stock, in terms of milestones going forward, I would encourage you to look forward to a couple of our major releases. We’ll have a major release in early April on Qupasa and Orkut, and then we’ll have another major release in June and that will be Quepasa, Orkut, and Facebook. So we’ve got about 80% of our team now working on that. They work through Carnival in Brazil. But we expect those to be very high quality titles. And hopefully that will be the first signal that we have traction within the social gaming space.
Game 3/17/11 1:14 PM
Sign-ups
Anne Geddes Clock 1,871
Art of the Day 1,164
Aztec Calendar 4,849
P Buddy Poker 42,613
Calendar 2,863
Carta Natal 2,134
R P Chinese Zodiac 12,254
Confess 3,541
Current Moon Phase 912
R Daily Tour 4,683
R P Doodle Blogger 5,375
F R P EcoMas 10,589
F R P EMI Lyric 11,668
Friendship Quote of the Day 5,044
F R P Goodgame Farmer 38,192
F R P Goodgame Mafia 34,485
Google Calendar 1,275
R P Google Map your Friends 6,924
R GrabGames 1,320
P Horoscope Diarios 15,525
Horoscope para Aries 508
R P Land of Destiny 10,409
R Lil' Brownies 411
Majong 4,333
Mayan Calendar 2,647
PacMac v 2.6 3,242
F R P PokerPlace 35,292
F R P Pokerville 12,858
Pregnancy Calendar 5,023
Quotes Book 1,496
R P Random Classic Art 9,253
F R P Satisfashion 46,577
P Search YouTube 19,839
F R P Snap Me Up 13,740,340
ToDo 824
R P Trio 27,392
Tu Nombre en Japones 2,788
P Twitter Tracker 7,163
R P War Metal 13,432
Word of the Day 800
R WoShamBo 1.2 5,069
F P Xfire Arcade 74,866
- - - - - -
Total without Snap Me Up 491,503
gistheman, Charles, fourkids, thanks for your responses.
It seemed that there was so much of interest in there that it was worth doing.
1. RETENTION AND ENGAGEMENT.
This is another quote from Abbott from the presentation:
As I mentioned previously, the challenge for us now, really focused on, is site retention and engagement. So we were initially very focused on things such as viral co-efficients and how we could most efficiently drive people to our site, get them to sign up. Now a lot of the metrics we’re looking at on a day-to-day basis is how do we go about getting them to return to the site more frequently. A lot of that will be driven by our game strategy, so we’re now going to be bringing very interesting and very compelling and very culturally relevant game content to our audience, which they haven’t had in the past.
I’m not sure, but he seems to be saying that they have signed other re-sellers besides Sony and Grupo Expansion: “We last year ran about five or six DSMs. These were essentially the DSMs that allowed us to win the contract with Sony and a number of other re-seller contracts that we’ve now signed."
WEDBUSH CONFERENCE TRANSCRIPT
March 9, 2011
To iHub: this is my own work from a publicly-broadcast conference.
http://www.wsw.com/webcast/wedbush16/
Here’s a transcript of the Wedbush conference. It was full of interesting information.
These are a few things that stood out for me:
Re TechFront: “The company we acquired had a number of different suitors and options and the key reason for them working with us was the fact that we were public.”
The success of the Farmville knock-off developers: “And a couple of companies that launched really Farmville knock-off games in on the Orkut platform in Brazil over the past fourteen months. On the back of that knock-off game, the two of them, one Mini Fazenda, developed by Vostu, the second one Colheita Feliz developed by Mentez, allowed those companies to scale to $80 to $100 run rates in revenues in about 12-month periods. So same sort of ramp that you saw in Zynga within this context again possibly because of the power of the social graph and with the interactions between people.”
I’m not sure, but he seems to be saying that they have signed other re-sellers besides Sony and Grupo Expansion: “We last year ran about five or six DSMs. These were essentially the DSMs that allowed us to win the contract with Sony and a number of other re-seller contracts that we’ve now signed."
I’m not sure if the final comment here is about Latin America specifically or whether it is about social games everywhere. If it’s Latin America, low supply would bode well for Quepasa’s games: “Moving on to social games, just some of the basic stats for Latin America on how these games are monetized. This is – the numbers we show here are the average for Orkut for last year. People who signed up for a given game, 30% of them became active gamers, so they returned to that game, of which 1.5% became paying users, and they in turn on average spent about $10 a month, which compares to maybe $15 or so on Zynga. So lower than the U.S. But the amount of conversion that you see on these is phenomenal cause there just isn’t that much product out there and people, you know, love this stuff."
We finally have some active user numbers, which he admits they have been holding back: “That’s something we’re starting to open up more, and disclose more in terms of our site retention…. people that we directly message are people that’ve been on the site for the past three months, and that’s anywhere from 30 to 35% of our total users.”
The tools they use for DSM: “So it’s really the power of you know really viral marketing, word-of-mouth, and a lot of the tools that we have for that are tools that we built to build our user base of 32 million people, so we have a lot of proprietary technology that we’re leveraging here, which is interesting. That’s why, we don’t think that – the product isn’t unique but it’s difficult to replicate.”
+++++++++++++++++++++++++
JOHN ABBOTT
Thanks so much for having us. It’s been a great day. Thanks for having us in the panel ___ as well. Great panel.
So I’ll run through the slides, try to go through it relatively quickly to allow for Q&A and maybe hone in on a couple of key issues that have been coming up pretty frequently. We’ve been on the road for the past week and have got a pretty good sense for what are some of the key issues that investors are interested in. So try to focus more on those points.
In terms of – from a capital markets standpoint, we listed on Amex about six weeks ago. Raised a financing last December. Finished the year with $13.5 million in cash. From a profitability standpoint, we’re break-even/neutral last year. And so the reason for raising the money really was to invest in our social gaming strategy. We announced the acquisition of a social game development studio last week in Brazil. And the purpose of the cash again was to invest in the development of that IP. We’ll talk more about that later. It’s a really key part of our strategy going forward.
Couple of more quick comments here. We still have roughly a large retail base and we’re actively talking to quite a few institutions in order to raise institutional ownership in our company.
Q. Hey, John, not to interrupt, you should change that slide to show that it’s significantly over100% CAGR.
A. Yeah. From 20 to, even on a
Q. On an annual
A. Yeah, On an annual rate, yeah sure. That was on a quarterly rate. Yeah. Good point. Thanks.
In terms of what we do, we position ourselves as both an audience network, so a social network and a social game development platform. We’ll talk more about what that means. We’ve got – we’re close to 32 million users at the end of February. Growing at over 2 million users per month. And that really was the real focus of all we did for the first two years since we re-launched this company in ’08 was around bringing large numbers of people to the site and being able to do so virally, really through word of mouth. So we haven’t invested any money in marketing promotions. It’s been viral, which is a great initial achievement, but that was Phase One of our plan, but really now it’s Phase Two and Three, meaning better retention, site engagement, and monetization. We’re really at the beginning of that phase. We mentioned here we’re the only – as Lou mentioned in the introduction, we’re the only known social media company that’s traded, at least here in the U.S. That’s important to us insofar as it allows us to essentially acquire companies with our stock. That’s what we did in Brazil. The company we acquired had a number of different suitors and options and the key reason for them working with us was the fact that we were public.
A couple of slides to go through in terms of the social media landscape. This is really what – Lou’s thesis, but 74% of worldwide internet users are on at least one social media site, so the power of this is undeniable. Another interesting stat is that one out of every four ad impressions served in the U.S. are now served on Facebook, so brands are recognizing the importance of being active within social media sites.
What’s interesting here is that our market is, we believe, to be underserved from a social media standpoint, but Ironically it’s the market that most over-indexes in its use and consumption of social media. Brazil is a case in point we cite here. It has the highest penetration of social media in the world. You’ve got more people on social media sites or social networks with more friends and connections in Brazil than their peers in any other country in the world. And if you look at time spent on site it’s very impressive particularly considering that broadband has just recently started to grow in Brazil. In general internet speeds are relatively slow.
We’ve talked about social gaming and the market opportunity there. Best case point, on a global scale, or in the U.S., is Zynga, they’re now a billion in revenue company, worth somewhere between $5 and $7 billion. They’ve achieved that in a period of about two years which really reflects the scale of early games that are free to play that are social in nature, so you interact with your friends in order to be more successful, and you – in order to accelerate within a given game you’re incented to engage in micro-transactions or buy virtual gifts.
Within Latin America that market’s estimated to be about $336 million in 2010. 2014’s expectation is $624 million according to a survey. I understand it’s conservative. I know people that believe that Brazil alone will be $600 million within the next 4 or 5 years. One stat, according to Social Gold, which I found interesting, third bullet point, is that the lifetime value of a Latin America game user is $300. It’s $258 in North America.
Q. Can you explain what it is that they’re spending the money on?
A. It’s really virtual gifts that allow you to level up or gain status within a given game relative to your friends and connections. And so you have cases for example in Farmville where they released a specific seed that people would pay up to $20 for that one seed that would allow them to do – you know to advance further. And I think one of the knocks that Silicon Valley’s often had on Latin America is great conversion, lot of users, use social media, we all know that, but it doesn’t monetize. We now have specific evidence that at least within social gaming, that’s not the case. And a couple of companies that launched really Farmville knock-off games in on the Orkut platform in Brazil over the past fourteen months. On the back of that knock-off game, the two of them, one Mini Fazenda, developed by Vostu, the second one Colheita Feliz developed by Mentez, allowed those companies to scale to $80 to $100 run rates in revenues in about 12-month periods. So same sort of ramp that you saw in Zynga within this context again possibly because of the power of the social graph and with the interactions between people.
Our positioning from day one has been that we see the market as being underserved. A lot of demand. And we’re really going about building a business around, to a certain degree, a fast-follower approach. We’re taking concepts that have worked in the general market and iterating very quickly and executing with an L.A.-based team with significant Silicon Valley backgrounds and then replicating or adapting those concepts to our demographic. We cite three examples here. One is social discovery, which was – the genesis of Myspace was around social discovery meaning a place to discover new people, new content. We’ve integrated some of the tools of social communication that you may see on Facebook or Twitter. And finally we cite here Zynga again, the model being developing your own IP, using – leveraging audiences on particular titles to co-promote other titles and we’re doing so not only on our platform but other platforms as well. And we’ll get into more detail in a second.
9:01
Question comes up all the time, so Facebook is ubiquitous or rapidly becoming ubiquitous. What is different about Quepasa? So we position ourselves as more social discovery, as I said, place to discover friends and content – or new friends and content, where Facebook is more of a destination or a platform where you are really communicating with existing friends, finding friends that you already know, and sharing content with them. We – one other aspect that we emphasize is that we work very closely with our partners, we’re partner friendly. And so we’ve got communities with the UFC and a number of other content verticals on our site. The graph here shows our election [?] rating rising, gaining share, whereas some other sites that I would argue didn’t differentiate themselves sufficiently from Facebook have seen declining traffic.
As Louis Kerner [?] mentioned, the user numbers that we’ve generated have been very strong. We added close to 20 million users last year off a base of about 6 million users. As I mentioned previously, the challenge for us now, really focused on is site retention and engagement. So we were initially very focused on things such as viral co-efficients and how we could most efficiently drive people to our site, get them to sign up. Now a lot of the metrics we’re looking at on a day-to-day basis is how do we go about getting them to return to the site more frequently. A lot of that will be driven by our game strategy, so we’re now going to be bringing very interesting and very compelling and very culturally relevant game content to our audience, which they haven’t had in the past.
But at the same time we’re introducing a number of other features such as first-time user experience so that user who’s less sophisticated will have a much simpler user interface where we present two or three key aspects of the site on the first time they visit.
We mentioned in our press release last week that as a result of some optimization on one of our social discovery games, page views per returning visit increased from about 15-16 last November to 20 currently. So we’re starting to see some improvement around our engagement metrics and we expect to see more progress as we introduce games.
In terms of our demographic, we started growing very quickly in Brazil around last May or June. And It’s now the #1 source of our new traffic. _____ 25 to 26% of our new users now coming from Brazil. 15% from Mexico, and the rest mix from U.S. and Hispanic.
Excuse me. Water. Apologize. Dry air here in New York.
But in terms of our user growth, one stat we show here – Lumina has better stats than we do. But the latest public information we have on Brazil, Facebook audience specifically grew by about 700,000 users in August. We grew by 446,000 users off a smaller base. It just indicates some attraction we have. Obviously, we’re still – our market penetration is still low but growing at a very rapid rate. I think that’s one thing to keep in mind.
12:40
So as I mentioned earlier, we made a conscious decision when we re-launched the site not to be a high-volume, low-CPM-type business, which a lot of traditional social networks were, i.e., Myspace, so you know massive number of users, page views and ad impressions worldwide. Very difficult to monetize that through ad networks and commodity banners. That’s _________ a business. Having a large and growing audience network is very interesting insofar as you can build interesting business models on top of that.
So two examples of what we’re doing, our two main revenue streams, the first one is what we call Quepasa DSM, which stands for Distributed Social Media. This is a social contest tool that we use to essentially power contests on behalf of brands and advertisers, You can see here on the slide here, a screen shot, this is a campaign we just completed this week on behalf of Sony in connection with the launch of a new car in Mexico, SEAT, who is phenomenally successful. And I’ll mention some of the results in a second.
And then secondly, micro-transactions again, That’s in connection with social games and virtual goods sales.
DSM, as I mentioned, is – what that entails is providing users incentives, prizes, in exchange for their participation. ______ to win they need to share their contest entry across the social web. So can share on e-mail on Quepasa, Twitter, Facebook, it’s really platform agnostic. It’s a performance-based metric, so we guarantee a minimum results of what we call engagements, which represents views, posts, comments. And as I mentioned earlier, we just completed a campaign on behalf of Sony for the launch of a SEAT car in Mexico. In this example here it was sold as an integrated package by Sony, where they provided both cable TV ads in Mexico, and we represented the digital solution to this. Their call to action was to enter our contest and then as a way for people to gain additional points in the contest, they have to go do a test drive is an option they could do. But generally they had to share their entry across the social web. We got 5,000 entrants which was the result of the spend that Sony did on TV, ____ driving traffic to Quepasa. What’s interesting, though, is those 5,000 people generated over 10 million engagements. And if you were to equate an engagement in traditional online ad terms of, say, click-throughs, which is clicking through a banner, generally across the web the average click-through is 0.2%. And so if someone where to come up to us and say, “We want banners that will generate these 10 million click-throughs”, you would have had to buy 5 billion impressions, banner impressions, which would have cost anywhere between $5 and $25 million. So very, very powerful, cost-effective, and it’s the ultimate word-of-mouth marketing. It’s your friend recommending that you interact with the SEAT brand as opposed to the SEAT brand messaging you directly through a banner or some other traditional means.
We last year ran about five or six DSMs. These were essentially the DSMs that allowed us to win the contract with Sony and a number of other re-seller contracts that we’ve now signed. They were - the one example we cite here was on behalf of a political imitative in Mexico. The results again phenomenal, 180,000 participants, about 8 million engagements. As those of you who follow us closely will know, a lot of these contracts were generally facilitated by one of our board members, and it’s important to point out that the pricing for these was essentially the same market pricing, 50 cents per engagement. And they – the success of those has allowed us to now get renewals. We’re now running phase 2 of this campaign here starting actually in the next couple of weeks. And we’re now getting actually a lot of inquiries from some of the political parties in Mexico wanting to know how they can leverage this technology. So we’re very pleased with these results.
This is just, as I mentioned earlier we signed reseller agreements with Sony and Grupo Expansion. Their sales forces actually pitching our product.
Moving on to social games, just some of the basic stats for Latin America on how these games are monetized. This is – the numbers we show here are the average for Orkut for last year. People who signed up for a given game, 30% of them became active gamers, so they returned to that game, of which 1.5% became paying users, and they in turn on average spent about $10 a month, which compares to maybe $15 or so on Zynga. So lower than the U.S. But the amount of conversion that you see on these is phenomenal cause there just isn’t that much product out there and people, you know, love this stuff.
On the righthand side we – is an illustration of our gaming model, so at the top you see “Quepasa Games.” that’s the new – TechFront Studios now renamed “Quepasa Games” and a number of third-party titles, which we will, in turn, publish and distribute onto our own Quepasa platform _______ there with 32 million users. We can market that at no marginal cost, which is one of the big challenges that game developers have today, and then we distribute onto Orkut, Facebook, and eventually mobile.
I think in terms of people evaluating us, our stock, in terms of milestones going forward, I would encourage you to look forward to a couple of our major releases. We’ll have a major release in early April on Qupasa and Orkut, and then we’ll have another major release in June and that will be Quepasa, Orkut, and Facebook. So we’ve got about 80% of our team now working on that. They work through Carneval in Brazil. But we expect those to be very high quality titles. And hopefully that will be the first signal that we have traction within the social gaming space.
19:30
Here’s some more details of the TechFront acquisition. As I mentioned, 41 fulltime game developers. The company’s been around for four years. The key members of the team have been working together [?] for ten years. So they’ve been working at a very good rhythm for a period of time. They – as part of the payment for the acquisition, part of it was stock, $3.7 million in stock, $300,000 cash. Then there’s an earn-out, and the earn-out was based on their own projections as to what they thought they could achieve connected to Quepasa and our ability to market their games on our network. It’s $9 million in revenues for this year, $27 million for 2012, and $35 for 2013. Which, you know again, this industry is very much hit-driven, so hard to predict. We attempt to de-risk that by taking existing successful concepts on Facebook that have been successful either in Asia or the U.S. and presenting those concepts, the same game play, but in a way that’s culturally relevant. So that’s one way we de-risk. The other way is that we have very low marketing cost because we’re integrated with our own audience.
Summary of our financials for last year. $6.1 million in revenues. We booked about $7.4 million in DSM revenue. EBITDA-neutral as I mentioned earlier. And then in terms of those DSM revenues, throughout the DSM campaigns that we run, we generated about 11.4 million engagements. I just mentioned 10 million on our last campaign which closed this week, so it goes to show the power this has ____ iterate on this platform _____ improve it, we connect it with traditional media channels such as Sony. And finally we added 19.6 million users in 2010, which was an increase of 239% from our year-end ‘09 number.
21:35
I’ll just – valuation, how to value these. You know, Lou I’m sure has an opinion. Facebook value on a per user basis, is very very high. $100 - $200. I’d like to just highlight a couple of companies in our space. Vostu, game developer out of Argentina. They were a $7 million value in September of 2009 when they did a raise to fund their initial game development efforts. Recently they did a raise at $300 million really off the back of that successful Farmville knockoff.
tuenti is a social network in Spain, 7 million users. No monetization but great site, great site engagement. Sold to Telephonica at $14 per user just last August.
And we’re, according to slide here, as of March 2nd, $6.75 per registered user.
So summary of the team. I’ll just skip over to, just in closing highlight some of our directors and advisors, which I think is one of the key assets of the company. As part of the TechFront acquisition, we acquired a new board member, Lars Batista. He was a co-founder of TechFront, the game development studio. He works now fulltime at EBX, which is a large holding company in Brazil controlled by his brother, Eike Batista. And he at the same time represents EBX at Ideiasnet, which is one of the key investments. It’s a publicly-traded VC fund in Brazil, I think it’s the largest VC fund in Brazil. And so he’s been very active since joining and gives us tremendous insight into a lot of activity in Brazil.
As with Michael Nicklas, who’s our most recent advisor. He was previously a Univision.com CTO, then was an angel investor in Brazil, now full time at Ideiasnet net with Lars.
And we have a set of advisors who have been really critical to us since the time we started the site, a group of guys who were all part of the founding of Paypal. And so we’ve got a mix of really great Silicon Valley expertise, both on the technology/product side, and we try to mix that with tremendous network and knowledge of the region, which I think is really a unique asset that we have.
So I’ll open it up to questions.
24:00
Q. The targets that you have with TechFront, the earn-out, should one assume that TechFront believes they can earn in excess of that, that those are sort of a minimum _____ or is that what you’re expecting in terms of revenue. Can you also address what sort of margins you think that would lead back to Quepasa?
A. Right, so it’s sort of, I guess you’ll identify with this, sort of like trying to buy an option, right? So trying to buy options using sort of a DCF so you don’t capture the volatility, and given that this is very much a hit-driven business. They – in order – those numbers, that the assumptions behind them – just like the average for the games on Orkut. So the numbers that I showed of 30% of installs become active, 1.5% become paying at $10 each. That summarizes – what it doesn’t capture is the potential for a hit. And the strategy of this year is very much focused on a limited number of high-impact releases so as to maximize the chances of getting a hit. So I think if they do get even something that would be less than a hit, they should exceed that, but it’s hard for us to make official projections or go beyond that because it is a new business. But I would look at it very much really as you would any option.
Q. _____ but if they get to the 9 million target in revenues, what would that imply for Quepasa?
A. So in terms from an EBITDA standpoint, they have a maximum cost for this year ____ I think, Mike, it’s $2 million.
MM. $2.5 million,
A. $2.5 million. So that’s money that flows to the bottom line. Generally in this industry, EBITDA margins are about 50%. So relatively low development costs, and then as you gain traction ________ invest in marketing. So if you look forward to 2012, $27 million in revenue, and I think their cost target is well below this, but if you were to say, “OK, lets assume that industry-average margin of 50%” you can get a feel for the leverage, financially, that we have on this.
Q. What is the R&D investment for this year? What is the target ____ ?
A. Well, as of third quarter last year the Quepasa.com and DSM were funding themselves, so break-even. And then on the games, the gross expenditures to fund the office and the 41 developers is $125,000 a month. If they meet their projections, they should be profitable by September.
Q. So $2.7 million or something per year.
A. Assuming our revenue.
Q. Yeah, I’m just ________ revenue _________.
A. Right. Yeah, that’s correct. Yeah. Yeah. Now if we get – make traction we would increase that budget to spend more on marketing.
Q. _______
A. Right.
Q. Do you have an active user measure? ____ how you do it, that there might be some churn, users that haven’t been around for a while _______?
A. Yeah, it’s a great question. That’s something we’re starting to open up more, and disclose more in terms of our site retention. I mentioned earlier the page views per returning visit that went from 15 to 20. In terms of our active users, the way we think about that is – at a high level is people who we send site alerts to ___ a new game or some new feature on the site, people that we directly message are people that’ve been on the site for the past three months, and that’s anywhere from 30 to 35% of our total users. Now to the extent we have something more compelling on the site, such as some of these games we’re about to develop, we can make the decision to message a broader group. So I would that all the users have value, but obviously that 30 to 35% are more valuable than the rest.
28:20
Q. _____ 2 million+ new users that you’re getting a month, are they the same as your current or are they changing, and what’s going on with your ______ subscriber base in terms of their usage of Quepasa?
A. So, we’ve observed, as I mentioned, since November greater usage. We’ve recently started drilling down a lot more deeply in who are users are, their behavior on the site, given that we’re – that’s our current focus. And we’ve learned some interesting things, so such as the – we’re 60/40 male to female, which we knew, but that the most active users are males over the age of 30. So I don’t know. I wouldn’t have expected that, but that tends to be the trend. I think it’s a reflection of the fact that social discovery is such a big element of our user experience. That might change over time as we bring a broader mix of contents. But as of now it’s you know18 to 43 with hardcore users, males over 30.
Q. What is it that they’re discovering?
A. For the most part, new people. I mean, and then they’ll be
Q. Girls or…?
A. Yeah, right. So I mean then we have a couple of games, one of them is similar to the first hit game on Facebook, which was “Own Your Friends” so you could literally buy and bid on other people’s pictures. And I can outbid you, and then you can outbid me, you can pay some money not to let anyone outbid you for 24 hours. So there are things like that that become more valuable as more people join the site because it creates more people who are in that game. We auto-subscribe all the users ____ default them into the game when they join unless they tell us they don’t want to be in the game.
Q. This is a dumb question, but if you got10 million engagements on the Sony thing and you get 50 cents per engagement, does that mean __________ ?
A. No. Yeah, that’s a good question. Yeah, well I mean the target we set out for these guys was about, I don’t recall what it was, but it was a relatively low target with a goal of really over-exceeding that as a way of then getting more business. So right now we’re pricing it very aggressively. The market in the U.S. is 50 cents per engagement. But what’s happened here is two things. One is, that we’ve got our own social network that can feed people, but for the first time we partnered with a media company to run all these campaigns, so they were bringing in people off of TV ads. And just the combination of just the traditional media with this viral tool is tremendous. So we’ll, over time, start ratcheting up that pricing.
Q. You mentioned Ideiasnet in Brazil and your relationship with TechFront ________ two new board members that are related to that. Can you expound on that. What do you think are the advntages to Quepasa from ideiasnet and how can you use ideiasnet as a base to further your strategy?
A. Right, so, a few themes. As I mentioned, the market is vastly underserved in Latin America. We’re sitting on a huge user base, and what we’re doing is going about layering businesses that are complementary to our social graph. Games being an example, DSM, their advertising tool. But Ideiasnet has great insights into a number of other emerging businesses or even established businesses that are very complementary. So we now have a dialogue, a really active dialog with them on different things they see in the market, things that we see. So I think – and then if you consider the fact that we’ve got a relatively liquid currency given our size, then you can see how you know over time this gives the opportunity to add on other very interesting businesses and to leverage our technology base in Los Angeles to bring best practices and fuel growth through our existing audience.
Q. ________ talk about your targeted audience in terms of males over 30 ___________ Match.com and incorporate that into ___________
A. We have a partnership with a company called Zoosk, and they’re sort of the modern, the Web 2.0 Match.com. So they’re really a social dating type of site. They’ve built a massive user base off of – mostly off of Facebook and other social networks. It’s targeted at a younger demographic. They don’t do – well, they do some TV ads, but Match is really more regional, they do TV ads. And so we have an affiliate deal with them. We refer them users and we get a 50% share from that.
Q. How did you get – seems a little weird – but how’d you get 10 million engagements off of 5,000 entries. I don’t understand. Seems like a large ratio _____.
A. Yeah, we were talking about that at a prior meeting. In the internet, typically in social web, it’s a relatively small percentage of users that generate the lion’s share of activity. They’re highly-motivated people. So this person has a chance to win a trip or a Sony TV, then that person will be very aggressive about generating engagements. So they are our brand ambassador. So we ask them, we offer them the opportunity to share on social networks but also share their e-mail, and you get massive leverage on e-mail. So if you, I don’t know how many contacts you have on your e-mail list, but if you were to e-mail them that you’re going to – you’re participating in this promotion for SEAT, for a car, and you’d like them to check it out, then you could potentially e-mail 500 people with one click. And all of those count as engagements. And then, in turn, on Facebook you share your feed, that’s one engagement, but then we track referrals. So people who clicked off that feed, then that counts as engagements as well because they’re [not?] interacting with contents. And we get great results on Twitter. Talked to Lou about this in the past. That on Twitter, the amount of conversion you get on links is even better than Facebook. So it’s really the power of you know really viral marketing, word-of-mouth, and a lot of the tools that we have for that are tools that we built to build our user base of 32 million people, so we have a lot of proprietary technology that we’re leveraging here, which is interesting. That’s why, we don’t think that – the product isn’t unique but it’s difficult to replicate.
Q. One last question. Quepasa, since you listed on Amex has generated a huge amount of interest from the investment public. Lots been written about it. What do you think is the biggest misconception that people have about Quepasa that hasn’t been accurately reflected in the market?
A. Right. I think the people who’ve followed us for the past two or three years, they understand that we’ve always been very clear about our strategy. It’s three steps. First we single-mindedly focused on user acquisition and nothing else. Now we’re at the retention and monetization phase. And so – you know, and we’ve always been very – made a big point of under-promising and over-delivering and I think that’s what we’ve managed to do. I think that what people [don’t?] understand is we’re still now starting that retention and monetization phase. We’ve made great progress but we’re still working on it. Secondly, I think people tend to confuse us, or our strategy, with that of some of the traditional social networks, which as I said before were high-volume, low-CPM businesses. We are not that. We’ve acquired a game development studio; it’s a proven model. The DSM, as we discussed again, is a very powerful technology. So we’re going about layering very, very compelling business models over a very large user base. So I think that – facts around that get twisted or mis-represented. And you know hopefully through this conference, and we’ve having a lot of investor meetings, we can start clarifying a lot of those steps.
“Crucial Early Retention”
Abbott in Q4 CC: “We’ve released our first game last week in beta. It’s a game called Satisfashion. It’s been released in beta both on Quepasa and on Orkut, and I’m pleased to say that thus far the retention numbers on that game have been very strong.”
Hopefully this includes data for initial users for at least a full week.
Below are a few excerpts from an article from June 29th, 2010 titled “Mixpanel: Social Game Developers Use Tutorials to Get Crucial Early Retention” byTim Trefren, cofounder of real-time analytics company Mixpanel.
(See the whole article for more clarity and the graphs he is referring to.)
http://www.insidesocialgames.com/2010/06/29/mixpanel-social-game-developers/
“Another thing I noticed was a strong trend in retention behavior. There are some remarkable similarities in the *pattern* of visitor retention across games, despite the differences in the actual numbers….”
“See a pattern? At the first point on the x-axis (Week 0-1), we can see that the initial conversion rate ranged from 1.76% on the low end to 62.83% on the high end. The interesting part comes later, though – no matter what the initial conversion rate between weeks 0 and 1, the following weeks convert at close to 80% across all of the games. Basically, this means that once you’ve had a user for at least a week, they have an 80% chance of coming back each following week. This suggests that your initial retention rate is critical, because once you’ve retained users for a week you are likely to keep them for quite a while.”
Not One Turtle
There have been a couple of posts/reviews that imply that the film follows one turtle. Not surprising, I guess, since the trailer (and the movie?) imply that is the case.
I wondered how they could follow one turtle. The answer is, “They couldn’t.” For one thing, it’s a 25-year journey.
It sounds like it is one turtle from the beach out to the Gulf Stream, and then after that it’s storytelling with many turtles playing the starring role. It would have been wonderful if it had been one turtle: as you point out, then a viewer would be sure to form an emotional attachment. (“The big difference is turtle follows one main character which also allows the viewer to become emotionally bonded.”)
The logistics are discussed in detail on their website bigwavetv.com.
NOTE: I'm sure it's a wonderful film, an incredible achievement, and the people who made it are good people, but I certainly thought it was one turtle from watching the trailer.
http://www.bigwavetv.com/index.php?page=turtle-the-incredible-journey-nick-stringer
“The odds are stacked against her, just one in 10,000 loggerheads survive the journey around the north Atlantic, yet it’s a way of life that has survived more than a 150 million years, since the age of the dinosaurs, thousands of generations have followed the same pathway before her.”
http://www.bigwavetv.com/index.php?page=turtle-the-incredible-journey-filming
“To get up close to the little hatchling on the beach and capture the sense of the battlefield she has to cross, required the latest in miniature Hi-Definition cameras. They allowed us to get right down on her level and track with her all the way to sea. And once in the ocean, underwater housings for miniature cameras allowed us to keep close to her in the raging surf and all the way out to the Gulf Stream. It’s brought a really intimate and energetic perspective to our opening scenes, enabling us to capture and experience the early life of the turtle as never seen before.
“Another problem is that it’s not humanly possibly to follow one turtle over its 25-year journey. As ever we were dependent the film’s scientific consultant, Dr Jeanette Wyneken, a leading turtle biologist, to advise us when and where to film. We filmed at several locations where we knew we could find the different aged turtles to tie the whole story together. The hatchlings emerging were filmed on a beach in Florida, and with extraordinary luck we captured rare footage of juveniles in the Azores, while adult turtles were filmed in the Florida Keys and the Caribbean.
Similar here to what was done to IBIO a couple of weeks ago: same youngster on seekingalpha, plus a second wave of nonsense from thestreetsweeper. If I were Ian, I think I might have closed the site also.
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=59758050
No, no, x-point. I’m sorry I must not have been clear.
I said
Helpfulbacteria said in the post I was responding to (# 207099), “I do not anticipate Wave making much money off of HAP.” I assume that means that he does not believe HAP will be widely deployed in industry. If that is true, then we are back to the initial difficulty: If the domains are not secure, why deploy virtualization? All that effort just to make it somewhat more difficult to compromise important data?
x-point, wavedreamer, thanks very much for responding. I was hoping someone would jump in.
One of the confusing aspects was trying to understand why virtualization would be used if each domain is not secured from the others. I re-listened to the HAP video from September’s NSA conference [link here: http://www.nsa.gov/ia/programs/h_a_p/index.shtml ], and I gather that virtualization was meant to secure the separate domains, but simply doesn’t succeed against a sophisticated attack. .
That video also confirms what x-point said, “What makes HAP special is utilizing special hardware/firmware, as in Intel's VPro the iTPM, TXT and VTd and late launch (DRTM)features, that provide the protections to guarantee the isolation of the environments where these OS's are running.” I also believe they said that not all operating systems can be used if the domains want to be secure.
The video also makes the point that domain isolation cannot be absolutely guaranteed (although I understood them to say they don’t know of a remote attack that could succeed against the HAP set-up), and that is why Trusted Computing's measured boot and host attestation is part of the HAP set-up.
Helpfulbacteria said in the post I was responding to (# 207099), “I do not anticipate Wave making much money off of HAP.” I assume that means that he does not believe HAP will be widely deployed in industry. If that is true, then we are back to the initial difficulty: If the domains are not secure, why deploy virtualization? All that effort just to make it somewhat more difficult to compromise important data?
Thanks again for your help. It is much clearer now.
Is it true that HAP is essentially synonymous with virtualization? Or is that not correct?
Based on that assumption, when I read the NSA HAP notice I asked myself why “normal” companies would need HAP/virtualization. My answer was that they need it in order to allow their employees to use their computers for personal internet activities. I thought that otherwise a company would need to forbid that type of activity.
Thanks for any insight.
I like to put faces to names.
Here’s an update on a project at an ethanol plant in Iowa (one of your neighbor states) funded in part by the Iowa Office of Energy Independence. I don’t know if they are simply growing the stuff or harvesting it as well. If they're only growing and not harvesting, it may not be tremendously useful. On the other hand, a successful farming operation could have harvesting technology, such as MBD is putting together with OOIL’s help, plugged in to it. But anyway, this is an example of a state government providing funding to move the process forward. Maybe you're aware of it.
http://www.ethanolproducer.com/articles/7454/algae-project-advances-at-gpre-plant
Algae project advances at GPRE plant
By Kris Bevill | February 02, 2011
BioProcess Algae LLC has begun operating commercial-scale algae bioreactors at Green Plains Renewable Energy Inc.’s 65 MMgy ethanol plant in Shenandoah, Iowa. The project is a joint venture among GPRE, BioProcessH20 LLC, a division of Tennessee-based water filtration company Clarcor Inc., and international renewable energy investment group NTR plc.
This is the second phase of a project designed to utilize waste products at ethanol facilities such as waste water, CO2 and waste heat along with sunlight and nutrients to produce algae that can in turn be used to produce saleable coproducts such as biodiesel and animal feed. The $11.5 million project has received $4 million in financial assistance from the state of Iowa—$2 million for each phase of the project. Phase I was deployed in October 2009 and consisted of operating small-scale bioreactors continuously for one year. The trademarked Grower Harvester bioreactors used for Phase II are 20 times larger than the Phase I bioreactors and are horizontal and vertical, whereas the Phase I reactors were only vertical reactors.
“After achieving 100 percent uptime in Phase I of the project and exceeding productivity targets at varying harvest intervals, we are excited to have Phase II of this project deployed and fully functional,” BioProcess Algae CEO Tim Burns said. “Our goal for Phase II is to satisfactorily demonstrate the commercial viability of our technology. We plan to utilize third-party verification for productivity, harvest densities and product value concerning lipid content and composition.”
GPRE CEO Todd Becker said the goal of the project is to manufacture feedstock. “We’re focused on acting as a farmer in the process,” he said. “There’s a lot of money being deployed into using algae for fuels and things like that. We wanted to focus first on making sure we had the feedstock.”
A report issued in December by the Iowa Office of Energy Independence stated that BioProcess Algae plans to identify what natural algae can be used in Iowa’s climate and verify that it can produce continuously at a level in excess of 200 tons per acre per year. At that level of production, a 50 MMgy ethanol plant could be expected to churn out enough algal oil to produce 5.8 MMgy of biodiesel and 51,000 tons of high-protein meal product annually.
Once the algae production process is validated and ready for distribution, BioProcess Algae will seek to license the technology to existing ethanol producers. It also plans to break ground on its first commercial algae farm, integrated with an existing ethanol facility, next year. Iowa’s Office of Energy Independence stated that the company expects to create up to 10 commercial algae farms in Iowa by the end of 2015.
Wow. I just finished reading that sickening piece by streetsweeper. What a disgrace. How do these people look at themselves in the mirror?
“That is pretty much the point of my post. The science should precede the dollars….”
I’m not sure what you are saying here. Do you mean using science to find new uses for the biomass? Or do you mean using science to try to make fuel from algae that doesn’t release carbon?
If A, I only say that I don’t know, not that nobody knows. I have read, for example, that there is at least one group in the underdeveloped world that has been working on growing algae for human food. I’ve just never heard anyone focus on the algae biomass as a problem. Maybe I’m just not aware.
If B, that would be wonderful, but I don’t think it is possible because the fuel needs to be virtually identical to that produced by petroleum. But using the carbon "twice" to produce energy is twice as good as what we've got now.
Sorry if both of these are incorrect and I have misunderstood you.
But overall, it sounds to me like science is not the main issue at this point. They seem to be able to grow the stuff. And they know they can make fuel from it that can replace petroleum, along with some other useful products. That’s why OOIL feels that the focus now needs to be on midstream processing – getting the algae ready for the refinery and ready for the other uses. And now they feel that enough science has been done, at least on their approach. So for them now it’s bricks and mortar: it’s trying it out at full scale, it’s being in the field and finding out what the problems are and how (or if) they can be met, it's engineering. The fact that there may be a funding source for this engineering challenge is what is so encouraging. There's probably lots of money for science, maybe not so much for engineering. (For example, I've noticed that over and over funding is going to looking for the perfect algae strain. I've never quite understood this. I think maybe this is something that attracts scientists....)
Anyway, I’m getting the impression that MBD and OOIL are both thinking straight, and that OOIL is helping MBD not only with OOIL technology, but by introducing MBD to other companies whose midstream processing technology is being deployed. If smart, honest, people can get together on scaling up this approach – with funding – it should be interesting to watch.
Yes, it’s true that fuel derived from algae releases carbon when burned, just like fuel derived from petroleum. The point, as I’m sure you know, is that fuel derived from algae releases carbon that was recently absorbed, not carbon absorbed millions of years ago.
If the three MBD projects are successful, I would think that many power plants would follow that lead, and Eckelberry’s expectations would be fulfilled. I don’t know if it is Australian government policies that are responsible for the work in Australia, and it’s certainly true that the U.S. is not leading the way here, so it is quite possible that U.S. power plants will be slow to follow. But there are many countries in the world, with many polluting operations and many different government policies.
It would also be interesting to know if a successful algae operation might eventually be a profit center for a power plant rather than a cost center. That would be an interesting question for Eckelberry.
Regarding algae biomass, I am not expert enough to know what applications it can be used for other than animal feed.
“Green needs to show economy.”
This is why Eckelberry is so excited about MBD and the use of algae for carbon capture.
In the Money TV February 4th interview, he and Goodall talk honestly about the need to scale up the algae process and about the difficulties and the time and effort needed to do this. And Eckelberry now believes that, through carbon capture, the polluters will fund this effort.
++++++++++++
Q. Now, Riggs, of course in a previous program you were talking about carbon capture, and I understand before coming on the program that there was an event up in Canada that caused some concern. Tell us about that.
RE. Well, I shouldn’t be smiling because it’s actually a disastrous event. The Weyburn carbon storage project in Saskatchewan, has started to release all the CO2 that they pumped into these underground reservoirs, making explosive sounds, contaminating soil and water, asphyxiating small animals, and frightening farmers. This is what happens when you try to store CO2 back in the ground. It eventually leaks back out.
Q. Sure.
RE. And so if anything made that point, we’ve got to do it biologically, take the CO2 from these fossil fuel polluters and turn it into beneficial products like algae and not just throw it back in the ground.
Q. Absolutely. I mean it seems like for many, many years we’ve tried to bury our problems, and bury our waste. And we have to think of a different way to deal with that.
RE. Exactly right. What’s very important about this bio-capture concept is that it gives us a big financial impetus at the start of the whole process. Algae industry’s got to work out the whole transformation thing. We play in extraction, and of course there’s the end products, which Brian, as the former VP of Downstream Processing at Sapphire knows full well, is a big science all by itself. But the financial impetus from the fossil fuel polluters that need this help sucking up the CO2 is going to build these huge algae plants.
Q. Now as we’ve mentioned on the program before, we’ve seen especially, I would say, in the last year an entirely new focus on algae. We’ve seen large oil companies buying TV time to talk about algae. We have also seen that there are many more things that we know can now be done with algae that we didn’t even know a couple of years ago. What do we expect to see in the coming months, in 2011? What’s on tap for OriginOil?
RE. What’s on tap for us really is to complete proving ourselves in the field. We’ve got a chance here to scale up with our big partner in Australia, that’s really the most aggressive carbon capture player with algae in the world today. And so we’re ramping up with them, it’s paying for our pilots. And essentially it’s giving Mr. Goodall here a chance - Dr. Goodall, I apologize – to really prove up the technology and take it to where large-scale distributors are going to take it to the world.
Q. Well, Dr. Goodall, and I apologize. I didn’t know that about you a moment ago.
BG. No problem.
Q. You earned that title, we’re going to use it.
BG. OK, thanks.
Q. What do you see as potentially the biggest roadblock to commercial acceptance of algae as a biofuel feedstock?
BG. I think proving it at scale, because only by proving it at scale can you start to see if it is a commercially viable replacement fuel for today’s crude oil. So all of the things that need to be done – I mean I’ve personally been involved in projects that have made jet fuel that’s flown on a commercial jet, gasoline that’s driven in a car, diesel that’s driven in a car. It can all be done, but it has to be done at scale because only at scale are you going to be able to do it at a cost that means something. And so I think the race to scale up and find those technologies which are most cost-effective and efficient and scalable – those are the obstacles – and not all of those things about going to be addressed in 2011 by the way. That’s something that’s going to take a few years, and the debate among different players is how long that’s going to take, how many years that is. But to do that – Mother Nature did it before us but she took 70 million years to do it, and we’re trying to do it in a lot shorter time than that.
Q. Of course, gentlemen, the company has unbridled enthusiasm that this will indeed be done, correct?
RE. Well, you know you have to remember it’s a vast amount of water handling, it’s a vast amount of infrastructure. You can’t make less of the problem. And previous attempts by sort of algae visionaries have said, “Oh, it’s just around the corner” and so forth. And then of course reality sets in, brick and mortar building sets in. And so we really need to say, “Look, this needs a chance to be built.” And that’s why I love how the fossil fuel polluters are going to provide this, for them, cheap source of funding that is actually going to build their future competitor.
This is a transcript of the Domestic Fuel Cast interview from December 28th which you posted a link to. I transcribed it because it was hard to hear in places and there is some interesting information in it.
-- This is the first I’ve heard them say that MBD is expected to use the Hydrogen capture technology as well, when it’s ready.
-- Also the comments about the Sustainable Resources site in New Mexico as a way to prove to Desmet Ballestra that OOIL’s technology is “predictable and profitable.”
-- Also his frank talk about the difficulty of scaling up such processes.
http://www.zimmcomm.biz/domesticfuel/dfcast-12-28-10.mp3
Welcome to the Domestic Fuel Cast, a podcast devoted to news and information about alternative fuels and energy, produced and hosted by ZimmComm New Media.
JOHN DAVIS. Going Down Under to prove the viability of algae-to-fuel technology. I’m your host, John Davis.
OriginOil, the developer of technology that turns algae into renewable fuel, recently announced the successful completion of the first phase of its commercial pilot program with Australian company MBD Energy, OriginOil’s first customer and pilot partner. Riggs Eckelberry, the CEO of Origin Oil, explains this project will allow his company to prove its technology in the field.
RIGGS ECKELBERRY. We were looking for one or two pilot customers that would enable us to scale up our technology in real conditions. And we found a company in Australia called MBD Energy. Now what’s significant about MBD is that they are a company funded to pursue what’s called bio-capture, which is the reduction of CO2 and other emissions from a smokestack using biological organisms, in this case algae. And they are funded by one of the largest mining companies, Anglo-American, to go essentially pursue power plants and mining companies and so forth as customers to reduce their CO2 burden. They really needed a solution to do something with all the algae. They felt they knew how to grow it. And really where they needed to go was, “What do you do with all that green water” and that’s our specialty.
JD. Eckelberry explains what OriginOil’s technology does.
RE. See, once it’s grown, ready for harvest, it’s still sitting in an awful lot of water. It’s 1000:1 water to algae. And you can’t just filter it out. It’s kind of like getting the Kool-aid back out of the water. How do you do that? Well, we have a process by which we basically shock the algae into coughing up[?], called flocculation, and then extracting, the oil. And that reduce – that basically gets it out of the watery phase and also separates the biomass from the oil. That’s our specialty; it’s kind of our focus as a company. And we have a number of other technologies, but we’re really known for our de-watering and extraction activities. And that’s really what we’ll be hired to do there.
They also want to put another technology to use that we have, which is called Hydrogen Extraction, but we’re still very early stage on that, and it will be a while before that’s ready for them.
JD. Eckelberry explains OriginOil is a pure technology company with no plans to manufacture or distribute products. They just want to come up with viable ways for companies to turn their ideas into commercially viable algae-to-fuel operations.
RE. So we now have a process, and from now on it’s about scaling up the volume. We’re essentially going from a very small research site to a pretty big, hectare – one – close to one hectare site, which is about 1.5 million liters of production per day. It’s a lot of water, of course. You have to divide that by 1000 to give you how much it’s going to produce in terms of algae, but it’s still a lot of production. So that’s where we’re going, is to establish, you know lets say about a ton of biomass per day being produced by MBD Energy. And that’s what we have to process. That’s called the display plan[?]. The next size up is to take the one hectare size and take it up to perhaps 10 or 50 [15?] hectares. And just keep scaling up, and we’ll have process challenges at every stage.
And, you know, I used to be many years in software. You know, you – it’s easy to scale up software, You just distribute more of it, more people download it. You might have issues on server traffic or whatever. But in algae you go with a technology and then you have to physically build the system, and it takes years for the system to be engineered and built. It’s just a matter of somebody’s got to construct. And that’s just how it is. The biggest challenge we have today in terms of the growth of the algae industry is the physical engineering of long-term larger systems.
JD. So how long is this program, then? How long is this pilot?
RE. It’s a multi-year program. We’re going to just take a year to just build the one hectare site. So this time next year I hope that MBD, with us, is going to be up and running in full scale. So we did a small scale test earlier on like ________ quarter, but we were talking about a year away. And then they have two other power plants to do that with. And meanwhile, we’ll be, hopefully, expanding at all – at one, two, or even three plants at a time. Perhaps it’ll be two and three years out to get five times expansion from there. Each time we want to get a five- or ten-times expansion of size. So we’ll go what it is now to one hectare, to perhaps 10 or 20, to 100 or 500. I would think that within five years that we would hope to be at a couple-thousand-acre site.
JD. Meanwhile OriginOil is also doing something a little closer to home. The company announced another project to help build a new advanced algae center with Sustainable Resources Incorporated on the site of the original Aquatic Species Program in Roswell, New Mexico, scheduled to start sometime next year.
RE. We were looking for a site where we could work in the U.S. Nobody’s really as aggressive as people like MBD Energy in the U.S. We have a very sort of unsettled carbon regime in our country. And basically the emitters believe that they can lobby their way out of this for now. So we don’t have serious bio customers for this activity. But what we did find was a company, Sustainable Resources, that was eager to start a research and development center on the site of the old Aquatic Species Program that was run by the DOE from ’78 – uh, sorry from 1987 to 1996 – that was the forerunner of everything we’re doing now. And so we’re locating on the same site in Roswell, New Mexico.
JD. Eckelberry jokes they’ll even hold a job fair for any little green men who might be visiting Roswell to work at the facility. But seriously, he hopes that these projects will go a long way toward proving just how commercially viable OriginOil’s technology is.
RE. This is how we then convince large what we call OEMs, original equipment manufacturer companies that make things on their own brand, convince them that they should integrate our technology. In fact, we have a partner who’s waiting in the wings. It’s a multi-national called Desmet Ballestra, in Belgium. And Desmet Ballestra is one of the world’s largest oil seed extraction companies. They have about 1000 engineers in 120 countries, and they want to get into the algae oil extraction business. By this we hope to convince them that this is a predictable and profitable process.
JD. Eckelberry says the algae oil industry is at a critical point and believes it will soon prove its worth.
Well, that’s interesting. I guess we’re all speechless.
I was going to ask when you realized this, but I see that you told us on September 29 in post #696. I know I read that post because I have a copy of it. But all I took from it was where to get the application sign-up numbers; I completely missed the statement about all new users being automatically registered. Charles, who’s been reporting the SnapMeUp numbers, actually responded to that post, but he must have missed that sentence also.
That’s pretty disappointing after months of thinking millions of people were signing up.
Thanks, Ian. That was a fine job. You elicited information useful to new investors and also to old hands. I’ve listed below some of the points I found most interesting.
GAMES AND MONETIZATION
-- I was really interested to hear that they have some evidence of how games may monetize in Brazil. In one of the earlier conference calls, John Abbott commented that they’d seen monetization the U.S., Asia, and Europe, but were not sure how it would go in Latin America.
Per Charles’ post on January 5, there were a little over 9 million SnapMeUp sign-ups. Applying the numbers to that:
9,000,000 Sign-ups
30.0% % that become active
--------------
2,700,000 Active users
1.5% % that become paying users
--------------
40,500 Paying users
$ 10 Average spent per month
--------------
$ 405,000 Income per month
It’s probably true in most cases that when revenues start hitting a small company, valuation starts to be based on those numbers, and the wonderful expectations go out the window. In this case, however, there is another active valuation method, as we all know, number of registered users. I believe that progress on monetization would support a valuation based on user numbers, and may in fact be needed to support that valuation.
The valuation and revenue picture is complex, I think. We don’t know at this point how much of the valuation is based on people believing that the $7 million in DSM revenue from Ancira is “real.” We've certainly heard often enough how the company is cash flow positive based on these contributions. I mentioned this to IR and was told that some institutional investors were also troubled by this, but, like me, invested anyway.
So going forward, I think they need to start delivering revenue, even if at a slow pace. If millions play SnapMeUp but don’t spend real money or if DSM does not attract advertisers fairly quickly, then the valuation could indeed suffer. That’s why I was somewhat concerned that in the last PR there was no mention of how SnapMeUp is doing. And that is another reason (which I just thought of this moment) why their misleading statements about the $7 million Ancira DSM contracts may have been especially unwise: now when real DSM revenue shows up, it may pale in comparison. Hmmmm, that's an unsettling thought.
I have to think more about the game focus, but theoretically I don’t mind that they would be actively involved in one of the main methods of making money on the site. In fact they already developed a successful application, Papacito, so it may be something they can handle.
Hi ab. Stirring the pot?
In general, I’ve learned that very few companies can be held for a really lengthy period: many good stocks have a run and then peter out for one reason or another. So I don’t worry about Facebook in the future taking QPSA’s users away.
But the company is explicitly trying NOT to be a clone of Facebook; they have identified that as a mistake that other social networks have made. They have adopted some of Facebook’s basic structure (like logging on and seeing up front what your friends are doing) but they seem to be focusing on a certain type of Latin experience to attract a certain Latin demographic. They’re going heavily into content like UFC, Playboy Mexico, the Brazilian plastic surgeon, and the “Mexican Vanna White.” This all sounds pretty unattractive (to put it mildly) to me, but it looks like they have identified an audience and are going for it - and are succeeding in attracting millions of people. Quepasa may never be as vital as Facebook, but it could still be very prosperous.
The question of valuation is more than I can tackle at the moment, but as for their monetization plans, they have at least three approaches to monetizing the users they attract: 1) Games and contests, 2) Users paying for content from communities (like UFC fights or “Vanna White’s” products), 3) the DSM advertising platform.
Games: As I said in my post #2047, all they need from eGames is one great game. eGames could go out of business tomorrow and the games will still be there. I’m assuming/hoping that there’s something eGames has that QPSA thinks is special. I think QPSA management sees very big dollar signs when they think of Zynga, and games and game development is seen as more than a way to generate money from their own users. They will probably take good games from whatever source they can, and they also seem pretty good at development-on-the-cheap with their programming set-up in Mexico. My only concern here is that the game-development dollar signs in their eyes might cause them to lose focus on the site itself.
DSM Advertising Platform: I can’t see why advertisers wouldn’t go for this, though we’re still waiting for the first real customer - but I don’t know how long it has been really finished and ready to go. Hopefully Sony and Grupo Expansion will be able to sell some campaigns. After watching many small companies struggle to get going, I see that everything takes many times longer than anyone would expect.
I’m definitely anxious to see some monetization take place (from users and real advertising customers), but they seem to be taking good steps in that direction.