La Evolución de las Redes Sociales Michael Trigg 26 de septiembre 2009

Agenda Social networking history hi5 early success hi5 in Peru How social networking is evolving Communication vs. Entertainment Social use cases Business models and new opportunities Advertising Direct user payments Leveraging social networking Top tips Common mistakes

Social networking history

hi5 early success

hi5 in Peru

How social networking is evolving

Communication vs. Entertainment

Social use cases

Business models and new opportunities

Advertising

Direct user payments

Leveraging social networking

Top tips

Common mistakes

hi5 is a Top Web Site in the World Founded in 2003, 60 employees Over 60M monthly unique visitors #1 social entertainment site 3 rd largest social site worldwide 8 th largest site WW for age 15-24 11 th largest site WW by page views Larger than any online gaming site Named as a top site by the media Source: comScore, June 2009. #1 #11 Top 100 Worldwide Sites Ranked by Page Views Total Annual Page Views (Millions) #35 #24 #40 #58 #76

Founded in 2003, 60 employees

Over 60M monthly unique visitors

#1 social entertainment site

3 rd largest social site worldwide

8 th largest site WW for age 15-24

11 th largest site WW by page views

Larger than any online gaming site

Named as a top site by the media

Recent Press Coverage

Latest Chapter in Battle for Users’ Attention Communication and Connection Time Blogging Photo sharing Video sharing Micro-blogging Voice over IP Chat rooms Virtual worlds … .. IM Social Networking Web Mail Portals

Blogging

Photo sharing

Video sharing

Micro-blogging

Voice over IP

Chat rooms

Virtual worlds

… ..

Social Networking Use is Exploding Monthly Unique Visitors (000) Source: comScore and Company Estimates. 770 million monthly unique users worldwide Over 300 sites in social networking category

770 million monthly unique users worldwide

Over 300 sites in social networking category

hi5 Evolution Founded $250K seed financing Major Milestones Profitable 1M users $20M Series A from MDV OpenSocial hi5 Coins Virtual gifts Pixverse hi5 Games hi5 Video Direct user payments + advertising 15 emps 10M users 30 emps Spanish translation 60M 38.3 23.9 19.2 16.3 2.0 0.0 Monthly Uniques Visitors (M) 1 2003 2004 2005 2006 2007 2008 2009 1. Source: comScore and internal estimates 10M Gamers 18M Social Entertainment Users

Founded

$250K seed financing

Profitable

1M users

$20M Series A from MDV

OpenSocial

hi5 Coins

Virtual gifts

Pixverse

hi5 Games

hi5 Video

Direct user payments + advertising

15 emps

10M users

30 emps

Spanish translation

Targeting the Spanish-Language Market Source: Internet World Stats, Nov ‘07 Millions of Users Large addressable market Third-largest language online Under-served by other sites Highly monetize-able Worldwide Internet Users by Language

Large addressable market

Third-largest language online

Under-served by other sites

Highly monetize-able

Early Growth Due to Localization English Español Português Français Italiano Ελληνικά Русский 中文 Deutsch Nederlands Türkçe Română 日本語 ภาษาไทย Polski Over 50 Languages and Dialects Worldwide

Serving a Diverse Global Audience Asia/Pac 16.2M LatAm 16.4M ME/Africa 5.0M North Am 5.5M Europe 16.4M hi5’s Top 5 Countries Mexico, 6.4M Thailand, 5.8M Peru,4.4M US, 4.4M Portugal, 2.4M Source: comScore, July 2009 Source: Internal, July 2009

hi5’s Top 5 Countries

Mexico, 6.4M

Thailand, 5.8M

Peru,4.4M

US, 4.4M

Portugal, 2.4M

hi5 in Peru #1 social site in Peru #4 web site overall in Peru 4.4 million monthly unique visitors Over 1 million visitors every day Highly engaged users Pages/Visit = 30.96 Avg. Time on Site = 17:14 Age/Gender Distribution Geographic Distribution Country Partner

#1 social site in Peru

#4 web site overall in Peru

4.4 million monthly unique visitors

Over 1 million visitors every day

Highly engaged users

Pages/Visit = 30.96

Avg. Time on Site = 17:14

How Will Social Networking Evolve? Social Entertainment Communication Entertainment Different Use Cases

Different Life Stages = Different Uses Age 5-14 15-24 24+ “ Play”-based Self-expression Limited interaction Manage social contacts Keep in touch Be productive/efficient Meet new people Have fun Hang out

“ Play”-based

Self-expression

Limited interaction

Manage social contacts

Keep in touch

Be productive/efficient

Meet new people

Have fun

Hang out

Audience Psychographics Highly Engaged in Social Entertainment Activities Gaming Dating Entertainment Shopping Source: US Nielsen @Plan Spring 2009

Adding Games to the Social Experience Launched hi5 Games channel in February ’09 Hundreds of Flash-based games Challenge/invite friends to play Added download-able games Premium games Gamers now one-third of hi5 traffic

Launched hi5 Games channel in February ’09

Hundreds of Flash-based games

Challenge/invite friends to play

Added download-able games

Premium games

Gamers now one-third of hi5 traffic

Adding Video to the Social Experience Partnership with Televisa Co-branded video site launched on hi5 in June ’08 Extensive library of Spanish-language video content Worldwide distrib- ution (except US) Premium ad inventory

Partnership with Televisa

Co-branded video site launched on hi5 in June ’08

Extensive library of Spanish-language video content

Worldwide distrib- ution (except US)

Premium ad inventory

Social Networking Business Models Source: Piper Jaffrey, September 2008. Advertising 1 Direct User Payments 2

Global Advertisers

Premium Creative + Viral Marketing Preserve brand identity Develop unique creative Deploy various formats Implement arresting visuals Build community for brands Enable brand interaction Spread message via viral hooks Foster users’ brand affinity +

Preserve brand identity

Develop unique creative

Deploy various formats

Implement arresting visuals

Build community for brands

Enable brand interaction

Spread message via viral hooks

Foster users’ brand affinity

Social Networks Drive Word of Mouth Branded Gifts Joining Communities Uploading Photos Posting Comments Installing Applications Branded Skins

Building a Virtual Economy Direct payments are over 15% of total revenue Top games generating $2-3K revenue per day Over 17M monthly users of premium content hi5 Coins payments are growing 80% per month hi5 Coins Virtual Currency Virtual gifts store Premium games Paid Features

Direct payments are over 15% of total revenue

Top games generating $2-3K revenue per day

Over 17M monthly users of premium content

hi5 Coins payments are growing 80% per month

The New hi5 Interact Meet Play Watch Create Give Buy

hi5 3D Engine basis for launch hi5 Stars Core engine leveraged to build immersive game experiences Enhancing Fidelity and Interactivity Overview Source: comScore, November 2008. stars

hi5 3D Engine basis for launch hi5 Stars

Core engine leveraged to build immersive game experiences

Top Tips for Social Marketing Create community around your brand Keep content fresh, new, engaging (usually funny) Make it participatory – have a point Create incentives for viral adoption/growth Use it to gather customer feedback – good and bad Experiment with different programs – learn/change fast Think globally Be willing to give up control Get clarity on goals/objectives

Create community around your brand

Keep content fresh, new, engaging (usually funny)

Make it participatory – have a point

Create incentives for viral adoption/growth

Use it to gather customer feedback – good and bad

Experiment with different programs – learn/change fast

Think globally

Be willing to give up control

Get clarity on goals/objectives

Top Marketer Mistakes Build it and they will come Promotion rather than relationship One-way pitch rather than two-way dialog Over-exploiting the social graph Interrupting the customer use case Pretending to be someone you’re not Ignoring limitations of your brand/category

Build it and they will come

Promotion rather than relationship

One-way pitch rather than two-way dialog

Over-exploiting the social graph

Interrupting the customer use case

Pretending to be someone you’re not

Ignoring limitations of your brand/category

Michael Trigg Vice President, Marketing hi5 Networks, Inc. Email: [email_address] hi5: http://mikemenlo.hi5.com Blog: http://hi5networks.com/blog/ Twitter: http:// twitter.com/mike_trigg