A little bit of lunch money can go a long way.
Teen social network MyYearbook reached profitability earlier this year on the back of its virtual currency called Lunch Money. So it’s no surprise that the New Hope, Pennsylvania-based company is aggressively pushing it forward, with a new browser toolbar and partnership with Target for redeemable cash cards.
Launched about a year ago, Lunch Money and virtual goods now bring in about one-third of MyYearbook’s roughly $1 million in monthly revenues, according to CEO Geoff Cook. Started with his two teenage siblings, Cook’s company now has 20 million members.
The company launched a new toolbar this week, that travels with a user across the web (like Google’s version). But in this case, a user can earn virtual cash by performing searches. The toolbar helps MyYearbook understand what its users are interested in and earn revenue from affiliate fees when they buy goods off sites like Amazon.com. MyYearbook is also partnering with Target to sell special VIP cards that are redeemable for virtual currency and other privileges on the site. (The reason MyYearbook is doing this on top of offering memberships directly on the web site is that many of its younger users don’t have credit cards. So they it’s hard for them to buy virtual cash online.)
While other social networks have prioritized user acquisition and growth above monetization, Cook has done the reverse, pushing very aggressive advertising and virtual payments systems. MyYearbook will even pay users virtual cash to watch video advertisements and answer questions about them later.
The company has built special takeover advertising experiences, where Target’s red logo will cover the web site’s background or where users can take photos of their friends’ faces and put them into animations. A Six Flags promotion that let people stick their friends’ faces in a roller coaster animation drove 1 million user actions (e.g. comments, “likes”, e-mails, etc.) That’s in contrast to Facebook’s more discreet engagement and text ads.
“We find the currency powerful at driving user behavior,” Cook said. “We’re constantly working on expanding Lunch Money — coming up with more things people can buy or syncing it with other services in unusual ways.”
Cook says the social networking site’s users overlap pretty heavily with Facebook. But MyYearbook is where you go to meet new people, while Facebook strengthens connections with your existing friends.
The company has about 80 employees and has raised more than $17 million in funding in two venture rounds involving Norwest Venture Partners, US Venture Partners and First Round Capital.
I’ve embedded a few videos about the company for background below: