DILLER AIMS YOUNG
IAC boss Barry Diller plans to go head-to-head with Disney’s Club Penguin in the kids virtual world business.
In one of its first moves since IAC’s split into five different companies earlier this month, flagship IAC on Sept. 16 will launch its own virtual world aimed at tweens called ZwinkyCuties.com.
IAC is no stranger to the virtual-world business. The portal is a spinoff of Zwinky.com, a two-year-old site aimed at teenagers that claims more than 16 million registered users globally and six million unique visitors per month.
Visitors to virtual “hangouts” like Zwinky Cuties interact using video game-like representations of themselves, called avatars, that they create and customize. They then congregate in virtual public spaces where they can socialize, shop, and play casual games.
John Park, president and CEO of IAC’s consumer applications and portals division, said the company decided to launch the younger brand after it began turning away thousands of users who attempted to register for Zwinky, but didn’t meet the site’s age requirement of at least 13 years old.
There’s no shortage of media names vying for an audience of girls aged 6-12. Disney bought kids’ virtual world Club Penguin last year for a reported $350 million. Toy brands like Barbie and Bratz have launched their own virtual worlds, too, as have companies like Webkinz.
“In the real world girls always love to play with dolls and dress them up and have play sets. We’re trying to bring that experience in the online world,” added Mike Primiani, senior VP of strategic partnership and product operation at IAC.
Media companies are plowing money into the virtual-world space across the board.
Time Warner and Sony have both made undisclosed investments in Gaia Online, a Web-based social community aimed at teenagers, which has raised over $20 million since its launch in 2003.
And Viacom’s MTV Networks has developed dedicated virtual worlds for popular shows like “The Hills.”
Consulting firm eMarketer estimates that more than half of all Internet-connected kids and teens between the ages of 3 and 17 – some 20 million in all – will visit virtual worlds by 2011, up from 34 percent, or 12 million, this year.
IAC doesn’t break out the size of its virtual-world business, but said it generates revenue from sponsorships, ads and search revenue on top of virtual commerce. Gaia, for instance, claims to generate over 100,000 transactions a day and over $1 million in revenues per month – over half its revenues.
But Zwinky Cuties, like Club Penguin, will be a subscription-based service, charging users $5.95 per month for virtual currency that can be used to collect online accessories, fashions, furniture and pets for their avatars.
That’s different than Zwinky.com and other more teen-focused sites in which users purchase virtual currency on an a la carte basis using credit cards and PayPal accounts.
Primiani said they’re trying to create a more parent friendly payment model with the tween service.