execution was wrong. The company’s first product was a social, interactive TV site, where consumers could interact with stars in a show. But nobody did it. While maybe 500 viewers would take part, tens of thousands of fans would read the transcript of the session after the show ended. BuddyTV had found its true calling—as a TV content and fan gossip site.
By year two, BuddyTV had gained traction, and its advertising model was starting to work. In the past few years, the site has seen 300 percent annual traffic growth. But fast forward to today, and Liu calls the revenue situation “interesting and challenging.” He says there is still growth in advertising, but “some trends we need to test. In 2010, we’ll do a lot of that testing. We think we can overwhelm our users with value. We think they’ll spend some amount of dollars on the site.”
The big question is when, and how. In terms of virtual currency and subscriptions, Liu says, “It’s clear to us that certain market leaders have figured it out. But I’m not sure that model works in the publishing space.” (He might be referring to offerings from Zynga and Facebook Gifts, as well as Picnik for subscriptions.) He says he believes in micropayments, but he thinks a lot about how fast “direct user monetization” will ramp up, to “make sure we’re constantly on the growth path.”
There are plenty of other challenges too. “The competitive landscape is always shifting,” he says. “We either have to figure it out very quickly or do something about it.” One thing he’s referring to is online video: consumers are going to sites like Hulu and Fancast, instead of BuddyTV, to actually watch TV shows (rather than chat about them). Another question is whether, and when, to get into other forms of entertainment shifting online, like movies and gaming, and fan sites for those.
Liu has no shortage of peers and mentors to help him find the answers. He started angel investing about three years ago, and has backed 18 companies to date, including local startups Cheezburger Network, Bacon Salt, Judy’s Book, Inkd, and Shelfari. He is also a limited partner in Seattle-based Founder’s Co-op, a seed-stage investment fund.
So I decided to hit him with a big question. If he could ask the God of Business one thing—and one thing only—what would it be?
Liu thought about it for a minute. Then his answer spoke volumes about the intricacies of today’s consumer websites, and the whole field of online publishing. “The thing I’d want to know, the thing that’s bothering me, is how to build user monetization around a publishing site,” he says. “How long will it be before someone spends a dollar on the site?”
