Viximo, purveyors of fine virtual goods, have hired former IGN Entertainment executive Dale Strang as its new CEO, replacing interim CEO Dayna Grayson. Viximo founder Brian Balfour has more on the announcement.
Viximo has enjoyed the company of several CEO’s in recent years, here’s to hoping that Strang can bring something to the table to get viximo a larger slice of the billion-dollar virtual goods industry.
Part of the problem is that dating sites think they can create their own virtual goods platform. Certainly a number of sites have the in-house capabilities to offer virtual good, but then they are managing yet another service. And not giving it the care and feeding it requires, or adding new gifts, which can lead to disappointing results.
I think the value proposition driver that HotOrNot and Facebook make hundreds of millions a year with virtual goods is not such a solid argument anymore. If they are, why aren’t more dating companies partnering with viximo? Is the rev share deal not strong enough? Are the virtual goods ho-hum? Do dating site operators not care enough at this point? (what do they care about?)
Virtual goods has been a small slice of dating industry revenue, and until viximo proves they actually improve the online dating experience and drive significant revenue through a series of large partnerships, the majority of their business may remain on the social networking side.
Update: New viximo publishers include BlackPlanet.com, SmartDate.com and FanIQ.com. New milestone is the fact that Viximo’s Network has grown to 60 million users.
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If you use virtual gifts it becomes a core part of your user experience, what site would outsource a core part of their user experience? Its like out sourcing the messaging function on your dating site, or better yet why not out source the search function? maybe outsouce the entire profile page.
I think outsourcing messaging and search is a great idea. Maybe even go into 21st century and have folders for messages and maybe search that doesn’t suck and matches on some compatibility points that actually matter and are relevant. I know, I’m crazy!
Yeah, someone should teach Markus how to actually run a dating site, eh Dave?;-)
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I would agree. If they can get the matching-up more efficient, then, I think, things would go for the better.
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Dave,
Thanks for reporting the news on Viximo. We are excited to add Dale to our team and announce some of our newest partners including SmartDate.com. We also have a number of other partners in the online dating vertical that we have not yet publicly disclosed, and we’re excited to see the adoption and growth of virtual economies, while slower than in social networking, continue to increase in online dating. While I would love to share some of our personal success stories with online dating, it’s the nature of our business to keep much of our publisher’s data private.
All the same, I think you ask some great questions about the potential for virtual goods, particularly in the context of online dating. Virtual goods continue to rapidly expand, far beyond Facebook and Hot or Not, in fact $1 Billion was spent on virtual goods in North America alone in 2009 (that’s close to, if not bigger than the entire dating industry already) and the market is expected to almost double in 2010. In online dating specifically there have been virtual goods/currency successes at Flirtomatic, Zoosk, Ashley Madison, and our partners that further validate the model. Publishers in Asia have been using virtual goods as a business model for much longer and that market has reached close to $6 Billion yearly. We are already seeing faster growth in North America than what Asia saw in their early years. My point is, this is just the beginning. If you look at the reasons why people buy virtual goods on social networks you will quickly notice that those same exact reasons apply in online dating sites. Virtual goods just need to be applied in the right way which goes far beyond just virtual gifts.
As for Viximo, we strive to provide an online dating site with all of the tools and expertise necessary to be successful with virtual goods. Success with virtual goods requires tools, skills, content, and expertise that most existing online dating sites don’t already have. A publisher can take on the expense, time, and risk of doing it themselves, or work with a partner like Viximo which can get them there quicker, cheaper, and help ensure success. Working with us allows a dating site to focus on their core competencies while still taking advantage of the rapidly growing virtual goods opportunity.
I’m presenting a panel on social dating and virtual goods at iDate Miami at the end of January. I would love for you and everyone interested in the opportunity that virtual goods presents for dating sites to attend.
Brian Balfour
Founder, VP Product Marketing
Viximo Inc.
Markus,
You present a very good question. You’ve built a great site by doing most of the work in house and I must commend you for that. But that fact is that isn’t the right approach for everyone.
Success with virtual goods requires tools, skills, content, and expertise that most existing online dating sites don’t already have. A publisher can take on the expense, time, and risk of doing it themselves, or work with a partner like Viximo which can get them there quicker, cheaper, and help ensure success. Working with us allows a dating site to focus on their core competencies while still taking advantage of the rapidly growing virtual goods opportunity.
You are correct that to optimize virtual goods it needs to become a core part of the site. But many very successful websites have worked with a third party on core items that contribute to success. A key part of most sites success is having a subscription or advertising model, but does that mean they should build their own payments system or ad serving technology? What about building your own live chat software? There are even great examples of successful sites outsourcing the entire site…yes, even the profiles (see White Label Dating, Ska Dating, etc).
I’m presenting a panel at iDate Miami at the end of January on social dating and virtual goods. I would love for you to attend and add any insight around your virtual goods endeavors.
Brian Balfour
Founder, VP Product Marketing
Viximo Inc.
A piece of data I forgot to include was that our average revenue per user is an order of magnitude higher on dating sites then social networks showing the potential for this in the online dating world.