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Since Transforming Itself Into a Social Network, Quepassa Has Become the Fastest Growing Latino Site

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Since Transforming Itself Into a Social Network, Quepassa Has Become the Fastest Growing Latino Site Issue: January 30, 2009 All rights reserved! ceocfointerviews.com The Most Powerful Name In Corporate News and Information. Since Transforming Itself Into A Social Network, Quepassa Has Become The Fastest Growing Latino Site Technology ico’s leading integrated steel producer. ideas, and activities. Internet Information Providers Among his responsibilities, Mr. Abbott (QPSA-NASDAQ) has led the negotiation of AHMSA’s Interview by: Lynn Fosse, Sr. Editor $2bn debt restructuring. Quepasa Corporation CEOCFO: What is your vision for In addition, over the past two years, Mr. Quepasa? 224 Datura Street, Suite 1100 Abbott has led investor groups and has Mr. Abbott: “Our vision is to transform West Palm Beach, FL 33401 participated in the executive committees Quepasa into the leading social network Phone: 561-491-4181 of two start-up efforts in Brazil, namely destination for Latinos in the US and in Click Filmes (www.clickfilmes.com)— Latin America.” Brazil’s first hotel video on demand busi- ness—and Industria de Entretenimento— CEOCFO: Where are you in the process an entertainment business that owns the and how are you going about it? rights to the Pacha brand in Brazil among Mr. Abbott: “Quepasa was founded in others. 1997 as a Latino portal, going public in 1999 and we went through a management In 2006, Mr. Abbott assisted in the for- change in November of 2007. At that mation of Mexicans and Americans time, the management team and I decided Thinking Together (www.matt.org), a to re-launch Quepasa as a Latino social San Antonio-based non profit group fo- network. We’ve been focusing on achiev- cused on improving Mexico-US relations. ing growth by creating a viral site and we MATT maintains a strategic partnership started growing virally in the past year. with Quepasa, through which both enti- In June, we were adding about 400 new ties collaborate on technological and users per day and as of a couple weeks community outreach initiatives. ago we built that up to 10,000 sign ups per day.” Mr. Abbott has spent a significant part of his life in Latin America, having lived 13 CEOCFO: What’s the competitor land- years in Puerto Rico, Uruguay and Brazil. scape like for the social networks in gen- John C. Abbott eral and for the Latino community in Chief Executive Officer Mr. Abbott earned his A.B. in History particular? from Stanford University in 1992 and his Mr. Abbott: “The two largest social net- BIO: MBA from Harvard Business School in works in the US as well as globally are Mr. Abbott has over 15 years of experi- 1997. Myspace and Facebook. You have quite a ence in strategic advisory and entrepre- few US Latinos on Myspace. In Latin neurship. Company Profile: America, the largest social networks are Quepasa Corporation (NASDAQ: Orkut and Hi5, which is a site based in From 1992 to 2005, Mr. Abbott held sev- QPSA), headquartered in West Palm San Francisco and they have a lot of traf- eral senior positions within JP Morgan’s Beach, FL (with offices in Los Angeles, fic in Latin America and Southeast Asia. Latin America M&A team, focusing on Scottsdale, Miami and Hermosillo, MX), Orkut, which is owned by Google, has advising many of the region’s leading owns Quepasa.com, one of the world's very strong position in Brazil, and industrial groups on mergers, acquisi- largest, bicultural, Latino online commu- Sonico, which is based in Argentina and tions, divestitures and restructurings. nities committed to providing fun, com- is essentially a Facebook copycat. petitive, interactive, and easy to use social Quepasa offers an authentic Latino ex- Since 2005, Mr. Abbott has been an advi- tools, and rich multimedia content to em- perience; it is a site that is focused on a sor to the Chairman of the Board of Altos brace Latinos, and empower them to con- Latino community. We also have a big Hornos de Mexico, S.A. (AHMSA), Mex- nect on-line, and share their interests, focus in our interactive communities, wards our brand and end up clicking changes in design on the site to make it through which people to share content through at very high rates.” make it more intuitive. The user experi- along specific areas of interest. We have ence will be more interactive. We’ve been over 1000 user generated communities on CEOCFO: How is the advertising com- growing very quickly and what we see as our site and we feature some prominent munity responding to Quepasa? we go on is that we have more and more latinos including Dr. Robert Rey, who is Mr. Abbott: “One challenge that social people using the site not just for enter- a plastic surgeon, who became known to networks have is to get advertising to pay tainment, but also bringing all their the public via the E channel’s show “Dr. for space on user profiles pages, or where friends and migrating friends from other 90210”; he is originally from Brazil and there is relatively little control over what social networks to Quepasa.” has a very strong following within our content will be displayed. Our emphasis community.” on communities where you can target CEOCFO: What is the financial picture user’s interests has been quite interesting for the company? CEOCFO: Why the need for Quepasa to advertisers and can help separate us Mr. Abbott: “We operate on a low cost when there is a Myspace already in wide- from some of the other social networks.” basis. We have an excellent team of de- spread use? velopers and designers based in Mexico, Mr. Abbott: “We have seen that people CEOCFO: What is your international which has allowed us to cut our costs by tend to belong to more than one social footprint? about 60% over the past year while actu- network. Therefore, the Latinos in the US Mr. Abbott: “We have a large user base ally making huge improvements in our might be on Myspace or Facebook, which in Mexico and we’ve grown a lot recently technology. We have sufficient funds to they might use to interact with the friends in Colombia and Venezuela. We are also make it through all of 2009 without ac- they have from school and work. On the planning to launch in Brazil in March.” cess to external financing. Within the other hand, what we’ve found on current market environment there are a CEOCFO: What about predators, and Quepasa is that Latinos go on Quepasa lot of tech companies that were expecting safety and privacy issues that have are so because they feel that it’s a way they can to raise new rounds of financing to sus- important today? express themselves in a way they may not tain their business; a lot of them will not be able to express themselves Mr. Abbott: “That’s something that we be able to raise the money and on other sites. If you look “Our vision is to transform Quepasa into the will struggle. From our stand- through our message walls or point, we may find some op- chat rooms people are commu- leading social network destination for Latinos in portunities to hire some very nicating mostly in Spanish or the US and in Latin America.” - John C. Abbott talented people that perhaps we maybe “Spanglish”, but it’s a may not have been able to hire take very seriously and I think something way they can express themselves in a way before. We raised money last January and that we’re monitoring closely. One of the that they may not be able to do on have cut costs and are prepared for a very challenges is that there is an evolving Myspace or Facebook in a way in which difficult financial market.” body of law around this issue, so we’re they really identify with their culture.” making big efforts to make sure that we CEOFO: Why should potential investors CEOCFO: How are you attracting your are doing everything we can at the com- look at Quepasa today? people? pany to protect minors and to make sure Mr. Abbott: “Quespasa is the only pub- Mr. Abbott: “The main way is friends that we stay up to date with the law.” licly traded social network. I’ve heard inviting friends and Quepasa having very people complain that there has been great CEOCFO: How do you see Quepasa good technology to facilitate that. We innovation in social networking but that growing in the next year? hired Louis Bardov, who had been run- public investors haven’t been able to par- Mr. Abbott: “We’re going to be rolling ning technology at Match.com and he ticipate in the tremendous value creation out a lot more interactive features. For joined Quepasa as Chief Technology Of- within this area. Facebook and Linkedin instance, we are going to allow users to ficer in January 2008. He has really are examples of this, but for a public create their own user generated contests, brought a great deal of discipline and market investor, there has not been any which would be based on competing con- world class practices to Quepasa. The opportunity to invest, and we’re the only tent, such as pictures or video. We just other factor is that we have some people ones out there that do offer public inves- launched free games on our sites. We receiving an email invitation to join tors the ability to participate in our signed an agreement with Universal Mu- Quepasa and there aren’t many other growth. In addition, our valuation today, sic Group, which should provide us with Latino social networks out there inviting based on any metric, is very cheap.” free video streaming and music streaming people.
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