Eye opening chat with CEO of mobile advertising based mobile community Buzz City

by: Bena Roberts Monday, March 31st, 2008

Innovative business models from Buzz City for mobile communities and advertising

I have dismissed Buzz City for some time now. I have felt that Buzz City was just another one of those companies trying to set up a social network, blah, blah blah.

How wrong I was. I had a meeting with Dr. Lai CEO of Buzz City a mobile advertising based community. The community is called mygamma.com. My gamma is different because it works on the basis of a mobile community with its own currency. The currency is called gamma and about 100 gamma is worth 1 USD. Users have a content mobile and gaming market place where users can purchase goods within the currency.

From this, Buzz City pays mobile operators a revenue fee for being part of the operator portal. Then, on top of that it pays mobile content providers 90% of the profits from each sale – after the network operator share has been removed. I stopped Dr. Lai in his tracks when he said that. I screamed What?

That is a terrible business model and how on earth do you eat?

He smiled at me and said, “we don’t mind about the mobile commerce side as we eat from advertising revenue and incremental sales from these customers?”.What? I thought Mr. Lai was yet another man from Mars and I thought I was losing the plot on this. But then we went over it again. This was a purely ad funded community. Buzz City serves one billion ads per month.

It is not a third party content provider but it works with third parties to supply content that is all revenue share based. The biggest markets for the company are South Africa, India, Indonesia and Europe.

Buzz has 2.5 million members. It boasts 100 million page views per month. On top of that it offers mobile billing is over 20 countries.

Moreover Buzz City is one of the only places where mobile porn and adult advertising is openly accepted. Dr. Lai didn’t want to admit it – but this must be a strong revenue stream for the company as well. So what is the essence of it all?

Dr. Lai is able to give away one part of his business model for free to actively gain from another. Mobile commerce is only a driver. Advertising is the killer business model and its successful.

So what do I think now.

After 30 minutes with Dr. Lai I have finally found a mobile community with huge potential. There is a piece missing from the community and that is mobile search.

One Response to “Eye opening chat with CEO of mobile advertising based mobile community Buzz City”

Mark Curtis Said:

Bena - how do Buzz get 10 ads on every page? If they are doing one billion ads a month off 100million pages (unless my maths is wrong…)

I’m interested partly because we (wap.Flirtomatic.com) did 115m page views last month and have only just moved to two ads per page.

Although our model is somewhat different (we do not have content providers) the outlines of success are the same as BuzzCity and it’s interesting to hear about them. We too have a currency (Flirtpoints) which users use to buy stuff, but basic usage is free. Advertising is moving ahead well but for us is only 25% of revenue.

Currently we are UK only so it’s extra interesting to see Buzz getting this model working elsewhere….maybe the UK advertising community is not as advanced in uptake of new media as it likes to think.

Mark

Comment made on April 2nd, 2008 at 2:48 am