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.
