RockYou. Along with Slide, it’s one of the iconic companies in the recent boomlet of social networking applications — fancy widgets that let third party developers better access to social network users, for activities like casual online games.
But these social networking applications, like social networks themselves, are facing more scrutiny these days. Will they ever make serious money?
At least some investors are still excited to find out, reports Vasanth Sridharan at Silicon Alley Insider, who hears that the RockYou’s executives are “mulling raising another $5 to $15 million” because the round the company just closed was “oversubscribed.”
This seems to contradict what we heard about the fundraising effort, which is that RockYou struggled to raise funding earlier this spring, as it was in the process of closing a $35 million round — even going so far as to take an early $1 million before the round closed.
Generally, early stage investors seem to be cooling to the potential of social networks and the applications that use them. For example, in the last six months, early stage venture firms that have previously invested in social networks and related companies have tended to not re-invest, as one Valley investor recently told me.
Maybe RockYou, which raised its latest round from existing venture backers DCM, Sequoia Capital, Partech International and Lightspeed Venture Partners, has more going for it than some of the others.
It’s hard to say, unfortunately, because few if any of these companies are disclosing revenue. The stated reason that one usually hears: They’re doing so well, they don’t want competitors to focus on them at this early stage at this of the market. Skeptics retort that they’re just hiding poor revenue performance. More middle-of-the-road types will tell you it’s still too early to tell what any of it will eventually be worth, regardless of what’s happening now.
Meanwhile, RockYou is staying focused on Facebook, company founder Jia Shen tells SAI. Rival Slide plans to focus on the other social networks as Facebook continues to restrict access that developers have to users.
So far, it’s been hard to tell if the social networking industry, if it can be called that, is the sort of mining town that turns into a ghost town, or the kind that turns into an entertainment center like Las Vegas.