In Facebook’s Wake, Two Social Networks Tie the Knot
July 21, 2011 by admin
Filed under Lingerie Events
By Shira Ovide
In Facebook’s shadow, two smaller social networks have signed up to “like”each other.
Quepasa Corp., the owner of an eponymous social network with about 38 million registered users, said it is buying fellow social network myYearbook.com in a cash-and-stock deal valued at $100 million.
Quepasa launched during the dotcom boom, nearly went bust and now has refashioned itself as a social network aimed at Latinos with footholds in Brazil and Mexico. MyYearbook was started by teenage siblings in 2005, and sought to poach people from the dominant social network of the time: MySpace.
Today, the companies aren’t predicting they’ll unseat Facebook, the current king of social networking.
The CEOs of Quepasa and myYearbook said the combined company can be a success even at a fraction of Facebook’s size. Quepasa and myYearbook together have more than 70 million registered users. Facebook has 750 million active users. Quepasa and myYearbook say their combined revenue for the last 12 months was $33.6 million. Facebook reportedly pulled in $2 billion in revenue last year.
The deal also is a big bite for Quepasa, which has a market value of $115 million. Its stock price has fallen 41% this year. About $82 million of the myYearbook acquisition price is in Quepasa stock, the companies said. They plan to announce their merger later Wednesday.
Quepasa and myYearbook said they focus on linking up people who don’t know each other in real life, but share common interests or live near each other. They say Facebook is more useful to keep tabs on what your real-life friends are doing.
Quepasa and myYearbook “are about meeting people you don’t know but should,” said Geoff Cook, the CEO of myYearbook and its original investor. He also said the two companies combined will better be able to promote their videogames to each company’s Web and mobile users.
Both companies have a rich history, at least by the standards of the young social networking industry.
Quepasa started out as a Spanish-language Web portal and search engine in the late 1990s. First came an IPO and a pricey promotional campaign featuring Cuban-American singer Gloria Estefan. By 2000, Quepasa sold its furniture and computing equipment, and stopped running its website to save money. After a 2002 takeover by Quepasa’s original founder, the company rebuilt itself as a social network and hub for playing online videogames.
Catherine and David Cook, teenage siblings from New Jersey, started MyYearbook in 2005 to connect high school students on the Web. The siblings’ older brother, the current myYearbook CEO Geoff Cook, agreed to invest in the venture. The same year myYearbook was getting off the ground, Mark Zuckerberg shortened the name of his startup from “TheFacebook.com.”
