Geoff Yang’s Got Game

This article was originally on a blog post platform and may be missing photos, graphics or links. See About archive blog posts.

Uber venture capitalist Geoff Yang of Redpoint Ventures says the future is in ‘activity webs,’ online spaces that are a cross between Facebook and ‘World of Warcraft.’

He’s put his money where his mouth is, having invested $6 million in Gaia Online, a site that targets 13- to 24-year-old females. The San Jose company has 5 million unique users each month who spend an average of 45 minutes each time they log on, he said.

Social networks are good at getting a big audience but have trouble getting them to stick around or be very engaged. Games such as ‘WoW,’ on the other hand, can take hours to play.

‘The activity web sits somewhere in between,’ Yang said in an interview with the Times at the EconSM Conference in Los Angeles. ‘You come for the people, but you stay to do things. It’s why people go to the mall. They go to hang out, but they’re also there to do something.’

So what do people do on Gaia? Just like going to a mall, they buy stuff and watch movies. Gaia gets most of its revenue, about $1 million a month, on selling virtual items. Visitors can also see movies, many from Warner Bros. and Sony Pictures Entertainment, both of whom invested in Gaia after using the site to promote movies such as ‘Nancy Drew.’

All told, Gaia has racked up about $30 million in venture financing, Yang said. What’s the endgame? ‘We’re hoping to take it public in an IPO,’ Yang said.

While the site, which is not yet profitable, currently survives on microtransactions, it also gets money from ads from Nike Inc., Toyota and Verizon Wireless. But Yang, who invested in MySpace and TiVo, thinks the big opportunity is in advertising. ‘Forty-five minutes of heavy engagement from this demographic is worth a ton.’

It’s worth at least $6 million to Yang.

-- Alex Pham