Millennials Make Millions
by Shira Ovide, WSJ,
Facebook Inc. founder Mark Zuckerberg soon may command a $100 billion company. But for three siblings from New Jersey, the sale of their social-networking company for $100 million in cash and stock is a reminder that life-changing payouts are possible for entrepreneurs below the lofty strata of Facebook, Groupon Inc. and other red-hot tech companies.
Catherine and David Cook started myYearbook.com in 2005 when they were 15 and 16 years old, respectively, as a way to connect with their new classmates at Montgomery High School in Skillman, N.J.
Big brother Geoff Cook, then 26 years old, bankrolled the start-up with $250,000 he had made from selling an online-resume business he built as a Harvard University student.
On Wednesday, Geoff Cook, now the 33-year-old chief executive of myYearbook, announced the sale of the company to Quepasa Corp., a social network aimed at Latinos.
 NNS/Times of Trenton /Landov |
| Catherine Cook co-created the website, myYearbook, which has been generating more than 14 million page views per day. |
Even while once-popular social networks such as MySpace and Bebo have faded, myYearbook has evolved just enough from its origins to carve out a niche in the shadow of Facebook and Twitter Inc. Quepasa shares rose 39% Wednesday to $9.93.
Together, Quepasa and myYearbook have more than 70 million registered users, less than a tenth of Facebook’s 750 million active users. Quepasa and myYearbook say their combined revenue for the past 12 months was $33.6 million. Research firm EMarketer estimates that Facebook had ad revenue last year of $1.86 billion.
The Cooks started out trying to put print yearbooks out of business. During lunches with their classmates, Catherine and David Cook drummed up ideas for their new website, and then tapped the help of computer programmers in India.
In myYearbook’s first full month as a national website, the company said it spread to 100,000 high school students. The same month, MySpace, then the dominant social-networking site at the time, made headlines by selling itself to News Corp. for $580 million. News Corp., which owns The Wall Street Journal, recently agreed to sell MySpace for a fraction of that sum.
By 2008, myYearbook was among the 15 most popular websites in the country, based on comScore data on Web-page views for September of that year. MyYearbook had higher page-view tallies than ESPN.com or Amazon.com (NASDAQ: AMZN – News) .
Classmates.com, Friendster, Hi5.com and other buzzy social networks from the past decade are no longer hot. AOL Inc. (NYSE: AOL – News) , then part of Time Warner Inc. (NYSE: TWX – News), bought Bebo for $860 million in 2008. Last year, AOL unloaded Bebo at a $1.8 million pretax loss.
Meanwhile, myYearbook managed to find ways to stay relevant. In the early days, each member could sign their friends’ virtual “yearbook,” swap music and photos on their online “lockers” and share study guides with classmates.
Now, myYearbook lets people flirt through a “Hot or Not” type offering, and allows users to connect via online video to play simple videogames, such as Scrabble and pool. More than 4 out of every 10 of myYearbook’s daily visits are on mobile phones.
It’s possible myYearbook could have fetched more had it been sold a few years ago, when competitors like Bebo and MySpace drew far bigger pricetags. Geoff Cook said the company had half a dozen or more acquisition overtures over the years, but opted to stay independent and pursue profits.
He says the combination with Quepasa, aimed at Web users in fast-growing markets, such as Brazil and Mexico, expands myYearbook’s resources and growth potential.
Mr. Cook said he and his siblings, who together have been the biggest shareholders in myYearbook, haven’t talked about any acquisition toys for themselves. Instead, Catherine Cook, who returned to the company after she graduated from Georgetown University in May, is working on ways to attract new users to myYearbook. David Cook, a student at the University of Colorado Boulder, will join the company when he graduates in the next few months.
“We’re excited to keep it going,” Geoff Cook said.
Write to Shira Ovide at shira.ovide@wsj.com
Categories: Fortune Cookie Wisdom, Latin America, North America