App developer/ad network
RockYou is shaking up its management team after it received a bunch of funding to go after brand partners in an effort to grow its business on Facebook.
In the restructuring, Lisa Marino will move from vice president of sales to chief revenue officer for the San Francisco company. Meanwhile, executives Ro Choy and Mihir Shah will be leaving the company to pursue other opportunities in social media.
RockYou has become the third-largest publisher on Facebook, parlaying its early market position into a continuing lead position with 52 million monthly active users in the U.S., according to AppData. Last month, RockYou raised $50 million in a fourth round of funding from Softbank, bringing its total raised to $118 million.
RockYou was founded in 2005 by Lance Tokuda and Jia Shen. The company makes Facebook apps such as RockYou Live and MyGifts and has more than 215 million users worldwide. But it also operates an ad network on Facebook with more than 600 publishers and 2,000 apps at any given time. The company’s rivals are Slide, Zynga and Playfish.
Marino spoke at our DiscoveryBeat conference on Tuesday, where she divulged interesting details about brands and how they can participate in social gaming. For the past 18 months, Marino headed the company’s branded sales initiatives. Her team of 35 generated roughly $6 million in revenue in 2009. And now the 105-employee company plans to expand that.
In an interview today, Marino said that RockYou plans to grow from $30 – $40 million in revenue in 2009 to more than $60 – $70 million in 2010. It will do so by expanding both the revenue that comes in from virtual goods transactions for its apps, as well as taking in more advertising revenue through its ad network business.
Marino, who is married to former chief revenue officer Choy, said she had encouraged him to get a CEO position and he has found one in social media. Shah, who was vice president of ad networks, also found a job at a different company as a chief revenue officer. Both are leaving on good terms with RockYou, Marino said.
Marino said she believes brands are getting excited about participating in social media. While they have seen limited success in launching apps on Facebook, brands do better when they are elegantly integrated into ads that run inside already-successful games or apps, Marino said. In that sense, ad revenue from brands is likely to supplement virtual goods revenue as a major source of income for Facebook apps in the future, Marino said.
With its new venture capital, RockYou plans to expand internationally, bring in more seasoned management, and invest heavily in new products that will keep users engaged. One challenge is that Facebook is making changes to the platform so that app notifications are no longer pushed aggressively to users. To deal with that, RockYou has to come up with new ways to get its apps noticed so that it can keep growing, Marino said.
The timing is interesting as RockYou puts its brand sales executive in charge of revenues. Yesterday, Tim Chang, principal at Norwest Venture Partners, told me that while 2009 was the year virtual goods models proved themselves in social games and other apps, 2010 will be the year brands will vigorously enter the social gaming space.
At the AlwaysOn Venture Summit Silicon Valley conference this week, both Rachel Lam, senior vice president of Time Warner Investments, and Louis Toth, senior managing director at Comcast Interactive Capital, said they were looking at investments in social gaming in 2010.
Clearly, the big investors are excited about social games and the big brands are coming. RockYou is getting ready for that.