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lance tokudaNews broke late yesterday that Lance Tokuda is stepping down from his role as chief executive of social game- and app-maker RockYou. Coming barely more than a month after the company announced substantial layoffs, we started wondering where RockYou is headed. So I got on the phone with chief operating officer Lisa Marino to find out.

Marino emphasized that both Tokuda’s decision (he will remain at RockYou working on “innovation and strategic initiatives”) and the layoffs were part of a larger reorganization at RockYou as it focuses on social games. The company was already making games, such as Zoo World, but Marino said it was doing too many other things — if you asked people in the industry what RockYou did, you’d get “a mixed bag of answers.”

So RockYou laid off part of its workforce (it never said how much), hired new employees with what Marino called “the right DNA to build the good games” (such as former EA executive Jonathan Knight), and in the last month alone, it shut down more than 50 applications. RockYou has become “a really different place,” Marino said.

And we’ll see the fruits of this new focus in the next few months, she added, as RockYou unveils new products that will make it “very relevant” in the social games industry.


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When I asked how RockYou hopes to stand out against giants like Zynga, Marino said the company isn’t just a game-maker. Yes, it’s focused on making games, but it’s also “a social entertainment company”. There’s a media and advertising side to RockYou’s business, which it uses to make money from its own games (so it’s not just tied to virtual goods) and to help other developers do the same.

“This was an aggressive move and a proactive move,” Marino said. “We’ve got a lot of money in the bank.”

Revenue is still strong, she added, with RockYou set to make more money in the fourth quarter of 2010 than it did in Q3 or Q2 (but not as much as Q1).

RockYou has raised $127 million in funding, so if its investors (including Sequoia Capital and Lightspeed Venture Partners) want to see a healthy return, they’ll need a bigger exit than rival Slide’s $228 million acquisition by Google.

Tokuda’s departure from the CEO role fit into that restructuring, Marino said, and it also came from his realization that as the company grows, it will need a “been here, done that” CEO with more experience growing organizations. For now, Marino and the rest of the current executive team are managing RockYou while the company searches for a replacement.

“Because the management team is doing well, we have the luxury of being patient to find the right candidate,” she said.

[Photo of Lance Tokuda at the Facebook Developer Garage via Flickr/Niall Kennedy]


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