MocoSpace Passes 2 Million Users, Collects $4 Million

Boston-based MocoSpace is celebrating two milestones this week. For one, it collected $4 million in second-round funding from a group of investors including General Catalyst, Pilot Group, and former eBay executive Michael Dearing. And its mobile-phone-based social network recently passed the 2-million-user mark—making it perhaps busiest social-networking service you’ve never heard of.

Founded by serial mobile entrepreneurs Justin Siegel and Jamie Hall, MocoSpace has been in business since 2005, and has been in rapid-growth mode since mid-2006. The company has 25 employees, split between offices in Boston and Herzeliya, Israel. Its members do all the standard social-networking things—building customized profiles, linking to friends’ profiles, uploading and sharing photos, exchanging e-mail and instant messages, and playing games. But all this activity is largely invisible to those of us who live on the broadband Web, because MocoSpace members do almost all of it without ever booting up a PC. And they generate, in total, over 1 billion page views a month. That’s billion, with a big Carl Sagan b—no small number, whatever the size of one’s screen.

Siegel, the CEO, says he and Hall launched MocoSpace to take advantage of three trends they saw in the marketplace: MySpace-style social networking, the rise of mobile Internet advertising, and—perhaps most importantly—the decreasing cost of mobile-phone data plans, making it possible for people to access Web-based services from their phones without paying an arm and a leg.

“Friendster, MySpace, and Facebook had become big online and it seemed like the mobile phone was a pretty obvious place for a lot of this to go next,” says Siegel. “But we were really tired of being in a carrier-centric business, and our thought was, wouldn’t it be great to do something where we weren’t reliant on the carriers? The Web was a great way to do that, and we were at the stage where data plans were moving in the right direction.” And companies like Boston’s Third Screen Media (now an AOL subsidiary) had come along to support an advertising-driven mobile Internet; MocoSpace makes most of its money by selling banner ads that appear at the top and/or bottom of each page.

MocoSpace Home PageHall and Siegel also realized there are plenty of people whose jobs don’t actually entail staring at a PC screen all day who might still enjoy participating in digital social networks. “Why would someone pay $7 to download Tetris to their mobile phone when they can play it free on their PC?” asks Siegel. “Well, people do, so there must be a demographic that has limited access to PCs when they want to play games. We thought the same thing might be true for social networking. MySpace, Facebook, and Bebo are great options, but tens of millions of people don’t work in front of PCs every day, and their mobile phone is a great place for them to do some of their socializing.” A mobile phone is also a much more private and personal device—and it can’t be blocked by your boss or your school library.

Siegel says MocoSpace has a broad user base, but can be broken down into two main groups. The first is a young, urban crowd—“not necessarily urban in the sense that they all live in cities, but they’re into hip hop, emo, goth—a real MTV crowd.” This group grew up with cell phones and spends much more time text-messaging and Web browsing from their phones than they do on the broadband Web, Siegel says. They’re mostly drawn into MocoSpace via word-of-mouth from their friends. The second group is older—in their early to mid 30s—and is drawn to MocoSpace because … Next Page »

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