What’s Up With Quepasa Corp.? How open innovation and social gaming are reviving a former Internet high-flier.
What is Quepasa? <ul><li>Quepasa Corp. (AMEX: QPSA) is owner and operator of quepasa.com and claims to be the only publicl...
Back from the brink <ul><li>Quepasa Corp. went from high-flying dot.com darling to Internet basket case in a breathtakingl...
A short, turbulent history <ul><li>Founded in 1997 during the height of the tech boom as Internet portal for Latino commun...
Financials <ul><li>Quepasa has never turned a profit. </li></ul><ul><li>2010 net loss of $6.65 million vs. loss of $11.9 m...
Risk factors <ul><li>Investors may get impatient if losses continue. </li></ul><ul><li>More and more social-network plays ...
The search for a viable business model… <ul><li>First plan focused on making acquisitions, including an Internet auction s...
the search goes on … <ul><li>Quepasa plans to sell the Vayala technology to smaller online content providers at prices bel...
…and on… <ul><li>Quepasa rebrands itself a social network in 2008. </li></ul><ul><li>Abbott seeks to monetize growing user...
…and on. <ul><li>Quepasa purchases Brazilian social game developer XtFt for $3.7 million in March 2011, enhancing its abil...
Abbott’s business-model innovation <ul><li>Willing to jettison what wasn’t working and create new avenues to success. </li...
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Quepasa power point

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Quepasa business model analysis for University of Missouri graduate course.

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Quepasa power point

  1. 1. What’s Up With Quepasa Corp.? How open innovation and social gaming are reviving a former Internet high-flier.
  2. 2. What is Quepasa? <ul><li>Quepasa Corp. (AMEX: QPSA) is owner and operator of quepasa.com and claims to be the only publicly-traded social-networking and gaming website for the Latino community. The site is available in English, Spanish and Portuguese. Quepasa has offices in Los Angeles; Hermosillo, Mexico and Curitiba, Brazil, and employs about 80 people. </li></ul>
  3. 3. Back from the brink <ul><li>Quepasa Corp. went from high-flying dot.com darling to Internet basket case in a breathtakingly short period of time. The West Palm Beach, Florida-based has managed to claw its way back from the brink of insolvency by reinventing itself as a ``fast-follower,’’ employing a strategy of open innovation. The company is now poised to take advantage of explosive growth in the social-gaming market as a niche player, or possibly more. Last week’s stunning announcement that Quepasa is buying teen social-networking site myYearbook.com for $100 million is the biggest, most dramatic example yet of CEO John Abbott’s ``fast-forward’’ strategy as he seeks to monetize the company’s latest business model. </li></ul>
  4. 4. A short, turbulent history <ul><li>Founded in 1997 during the height of the tech boom as Internet portal for Latino community. </li></ul><ul><li>Grammy Award-winning singer Gloria Estefan and former Costa Rican President Jose Maria Figueres among original investors. </li></ul><ul><li>$400 million in market value wiped out by 2001; stock de-listed. </li></ul><ul><li>Reorganized in 2002 under founder Jeffrey Peterson, who returned as CEO after being ousted. </li></ul><ul><li>Losses continue to mount amid several management shakeups. </li></ul><ul><li>John Abbott, 37 year-old Harvard MBA, takes over in October 2007. </li></ul><ul><li>In 2008, Quepasa transitions from Internet portal and search engine to a social network site for Hispanics, with emphasis on games and contests.. </li></ul><ul><li>Number of registered users reaches 35.6 million in April; `Wonderful City – Rio’ game successfully launched on Facebook. </li></ul><ul><li>Quepasa agrees on July 22, 2011, to buy teen social-networking site myYearbook.com for $100 million in bid to become ``market leader in social discovery.’’ </li></ul>
  5. 5. Financials <ul><li>Quepasa has never turned a profit. </li></ul><ul><li>2010 net loss of $6.65 million vs. loss of $11.9 million in 2008. </li></ul><ul><li>2010 revenue surged more than 1,000% from last year to $6.05 million. </li></ul><ul><li>Operating expenses reached $12 million. </li></ul><ul><li>Profit margin shrank to negative 110% last year from minus 21,268% in 2008. </li></ul><ul><li>$12.5 million in total cash on hand at year’s end. </li></ul><ul><li>2011 sales on track to surpass 2010. </li></ul><ul><li>No debt. </li></ul>
  6. 6. Risk factors <ul><li>Investors may get impatient if losses continue. </li></ul><ul><li>More and more social-network plays including Zynga. </li></ul><ul><li>Stock has lost almost a third of its value since hitting a high on Jan. 27. </li></ul><ul><li>Revenue stream is not diversified enough, with more than 90 percent of sales coming from Quepasa’s biggest shareholder. </li></ul><ul><li>Operating expenses continue to outpace revenue. </li></ul>
  7. 7. The search for a viable business model… <ul><li>First plan focused on making acquisitions, including an Internet auction site, credit-information provider and real estate services company. </li></ul><ul><li>Quepasa tried to be all things to all users. </li></ul><ul><li>In 2001, company retrenches to conserve cash, slashes workforce, sells all furniture and computers. </li></ul><ul><li>Website reactivated in 2002 to include e-mail, search and pay-for-placement capabilities. </li></ul><ul><li>Purchase of search and retrieval technology from Vayala in Oct. 2002 signals business-model shift. </li></ul>
  8. 8. the search goes on … <ul><li>Quepasa plans to sell the Vayala technology to smaller online content providers at prices below larger incumbents Inktomi and Google as well as collect advertising revenue. </li></ul><ul><li>Revenue drops to $210,000 in 2002. </li></ul><ul><li>Under Abbott’s new business model, Quepasa transitions in 2007 from trilingual search engine to trilingual portal and Hispanic social network. </li></ul><ul><li>Portal service discontinued; quepasa.com re-launched as solely Hispanic social network with performance-based ad revenue model based on impressions. </li></ul><ul><li>Quepasa adds adult-dating site to its other free offerings. </li></ul>
  9. 9. …and on… <ul><li>Quepasa rebrands itself a social network in 2008. </li></ul><ul><li>Abbott seeks to monetize growing user base by creating culturally relevant, geo-specific games in underserved markets such as Brazil. </li></ul><ul><li>Abbott employs ``fast-follower’’ strategy, using Quepasa’s late entry into social gaming to his advantage. </li></ul><ul><li>Quepasa launches ``developer interface and open social sandbox’’ in late 2009 to allow third-party developers to test applications and work directly with Quepasa’s own game developers. </li></ul><ul><li>2010 R&D spending triples to $4.8 million </li></ul>
  10. 10. …and on. <ul><li>Quepasa purchases Brazilian social game developer XtFt for $3.7 million in March 2011, enhancing its ability to create games in-house and collect 100% of revenue. </li></ul><ul><li>Abbott focuses on $653 million virtual goods market as new source of revenue. </li></ul><ul><li>Quepasa publishes `Wonderful City – Rio’ on Facebook and Google’s Orkut. </li></ul><ul><li>Quepasa announces on July 20, 2011 that it plans to purchase teen social-network site myYearbook.com for $100 million, doubling its registered-user base to more than 70 million. </li></ul>
  11. 11. Abbott’s business-model innovation <ul><li>Willing to jettison what wasn’t working and create new avenues to success. </li></ul><ul><li>Turned Quepasa into a ``fast follower’’ in disruptive social-discovery/gaming market, enabling it to learn from ``first-movers.’’ </li></ul><ul><li>Shifted resources to the future by boosting R&D spending and making targeted acquisitions, including myYearbook.com. </li></ul><ul><li>Accessed ideas and expertise of other companies through a strategy of open innovation and forging strategic relationships with larger, better-known companies. </li></ul><ul><li>Built a ``critical mass’’ of registered users and almost doubled that base with myYearbook.com acquisition. </li></ul><ul><li>Found and implemented a clear path to monetization. </li></ul><ul><li>Accelerated drive to monetization through ``fast-forward’’ purchase of myYearbook.com. </li></ul>

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