Virtual teen site raises another $11 million
Online teen site Gaia has raised another $11 million in venture funding, taking its total haul so far to $32 million. The cash should help its ongoing battle with natural rival Second Life, which has its own teen off-shoot.
Although Gaia has a Second Life-style ‘virtual world’, Gaia Towns, its main focus is a series of forums and social networking features; the forums reportedly average around a million posts a day. The site will also soon see ‘Gaia Battle’, a game along the lines of World of Warcraft. The site boasts around five million monthly visitors, of whom 350,000 log on every day.
The new cash comes from Institutional Venture Partners, which specialises in ‘later-stage investment’: that is, they target their funding at firms which have built up more credibility and seem likelier to be successful. They’ve previously backed the likes of Ask.com, Netflix and Tivo.
This is Series C funding, meaning it’s the third time a firm or firms has exchanged cash for a stake in the company. Previous Gaia investors include Time Warner, which also provides content for a ‘virtual cinema’ where users can watch a film, but have the (virtual) option to throw tomatoes at the screen if they dislike it.
As well as this financing, the company earns cash from sponsorship. There’s also Gaia currency which players earn automatically in proportion to their activity level on the site, and the Gaia money can be used to ‘buy’ clothing an accessories to customise avatars. There are also two ‘rare items’ each month which users can only buy with $2.50 of real world cash.
Just in case this combination of real cash, virtual currency and venture funding threatens to get too confusing, the company employs the services of Michael Boskin, a Stanford economics professor. He seems a pretty decent fit for a virtual technology firm having been a former government advisor quoted as saying “It does not matter if the U.S. makes computer chips or potato chips.”
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