Making Serious Money From Casual Games: King.com CEO Riccardo Zacconi (Part 2)

SM: How much did you sell the company for?

RZ: We sold it for $764 million.

SM: What kind of revenue did you have at that point?

RZ: The revenues were not very large. I would say it was a typical Internet boom story. We learned a lot from there. We learned that you should not focus on what advisors tell you in terms of target IPOs because targets can change very fast. The only thing that really counts are solid economic targets and profitability, the real fundamentals.

SM: What happened after the company was sold? What did you do next?

RZ: I stayed on board for a few months, and then I joined Benchmark Capital in London. I joined them as an EIR. I joined in October 2001, and I came in with 50 ideas. One of those ideas was online dating, which was not new in the United States but was very new in continental Europe. There was no paid online dating service.

With Spray we launched the first and largest free dating service. We saw that it was a way to acquire customers. After I joined Benchmark I saw there were models in the United States that were going very well based on paying customers, so I looked at different strategies to enter the market in Europe. One of the strategies was to start a product from scratch. A second one was to buy several free dating sites and change the model. A third was to invest in an existing paid dating site that had no presence in continental Europe and roll it out.

We went for the third option and made an investment offer to UDate.com, which was a UK company with a very strong position in the U.S. We propositioned to help them roll the product out in continental Europe. UDate refused the investment offer because they felt our valuation was slightly low. Instead, they made me an offer to join and build the European operation. Benchmark was fine with my leaving and building the European operation of UDate.

SM: What year was this?

RZ: I joined them in August 2002.

SM: The market was still in a recession.

RZ: It was definitely in a recession, but we sold UDate in December 2002 at a valuation five times higher than the valuation that we had proposed to them earlier that year.

SM: Who bought UDate?

RZ: IAC.

SM: Did they pull it into Match.com?

RZ: Yes.

SM: What happened after that?

RZ: I stayed on board for a few months. Match.com and I had a disagreement on strategy for building Europe. I left UDate, and in the meantime, I was in touch with my former colleagues at Spray. We decided to build King and I decided to personally  invest in it.

This segment is part 2 in the series : Making Serious Money From Casual Games: King.com CEO Riccardo Zacconi
1 2 3 4 5 6 7