SBJ/20081117/SBJ In-Depth

Application developers mine new opportunities

Mike Kerns and Jeff Ma, the lead executives of San Francisco fantasy sports operation ProTrade, needed a plan, and badly.

Less than a year ago, the stock market-inspired fantasy gaming company had peaked at 250,000 users and achieved some critical renown within the sports industry. But the site appealed primarily to hard-core fans with decent insight into financial systems, and there was little hope of broad mainstream acceptance in a business increasingly based on size and scale.

Enter the social-networking platforms.

“We changed the company pretty much 100 percent,” said Kerns, founder and chief executive of Citizen Sports Network, the corporate outgrowth of ProTrade. “It’s all inverted. Instead of trying to bring people to a specific site for a specific experience we’ve created, we’re now bringing a wide range of content and experiences to where they already are. It’s sort of a simple thing when you look at it on paper, but for us it was a really big shift. And it’s opened up a whole new range of opportunities that hadn’t existed before for us.”

Fantasy games are among the
applications that Citizens
Sports Network builds.

The company, like many it competes against, now builds applications that foster and support fandom around individual teams, as well as fantasy games, that are accessed within the major social networks such as Facebook. A much-hyped deal this spring linked Citizen Sports with Sports Illustrated to develop fantasy games on Facebook, giving the former a major brand to provide content, name recognition and a national sales force, and the latter a viable fantasy gaming presence it sorely lacked.

For Citizen Sports, the results from the transformation have been both immediate and striking. The 250,000 users have turned into more than 2 million overall, with a particular focus on international fan and fantasy gaming communities, including those built around English Premier League soccer. Annual revenue, arriving largely from national-level corporate sponsors, is approaching the mid-seven figures and is 600 percent higher than what ProTrade generated in 2007.

Citizen Sports is by no means alone in seeking to leverage the more than 100 million global users of both MySpace and Facebook. Dozens of other companies are pursuing similar initiatives, thanks in part to lower barriers to entry into the social media developer space. Watercooler, another Bay Area-based outfit, operates a similar set of team-based communities and recently signed a deal to get access to content from ABC and the online video portal Hulu.

And some smaller groups, including Massachusetts-based TruMedia Networks and SportsFanLive, the brainchild of former Yahoo! executive David Katz, are propagating similar team-based social communities that are clearly inspired by the big social networks but operate outside them so as to provide more control and a more distinctive voice.

“We think of ourselves as a media company,” said Kevin Chou, Watercooler chief executive. “The approach is obviously centered around building these experiences and communities. But we’ve had pro teams come in and use our platform, our community, to run promotions, move tickets at the last minute, that sort of thing. Those sorts of things have been very effective and help validate the power of what these groups are.”

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