Transcript QPSA - MeetMe, Inc.

The Leading Online Social Network & Gaming
Platform for the Latino Community
Investor Presentation
January 2011
Certain statements in this presentation and responses to various questions may contain forward-looking
statements. Forward-looking statements can be identified by words such as “anticipates,” “intends,” “plans,”
“seeks,” “believes,” “estimates,” “expects” and similar references to future periods. Forward-looking statements
are based on our current expectations and assumptions regarding our business, the economy and other future
conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties,
risks and changes in circumstances that are difficult to predict. Our actual results may differ materially from those
contemplated by the forward-looking statements. We caution you therefore against relying on any of these
forward-looking statements. They are neither statements of historical fact nor guarantees or assurances of future
performance. Important factors that could cause actual results to differ materially from those in the forwardlooking statements include changes in the public’s approach to social networking needs, competition, our ability to
continue to enrich our website to attract users, unanticipated failure to reach our users, our users willingness to
use the games and purchase enhancements, currency fluctuations, our ability to hedge risks, the development of
payment systems outside of the U.S. and unanticipated factors which cause us not to collect our accounts
receivable.
Further information on the Company’s risk factors is contained in its filings with the SEC, including the Form S-1
dated December 29, 2010. Any forward-looking statement made by the Company in this presentation speaks only
as of the date on which it is made. Factors or events that could cause our actual results to differ may emerge from
time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any
forward-looking statement, whether as a result of new information, future developments or otherwise.
The contents of this presentation are copyright Quepasa Corporation 2010 & 2011. All rights reserved.
QPSA 2
Stock Price (1/5/11)
$12.14
Quepasa.com Registered Users Growth
Avg. Daily Vol. (3 mo.)
95,820
(Millions)
52 Week Low/High
$1.95-$13.70
Shares Basic/Diluted 1
15.2M/27.4M
Public Float
Market Cap. 1
27.2
9.4M
25.1
22.8
$184.4M
Insider Ownership
11%
Institutional Ownership1
10%
16.9
Jul
1 Includes
1.7M Shares Closed on 12-20-2010
Sources: 10-Q, Capital IQ, & Yahoo! Finance
18.7
Aug
20.7
Sept
Oct
2010
Nov
Dec
QPSA 3

Leading online social network and gaming
platform, focused on the Latino community

27.3M user base, growing at >2M per
month, fueled by one of the fastest growing
web demographics (Latino/Lat. American)

Initiating monetization phase – generated
significant revenue growth in 2010

Only known publicly traded social network

Undervalued on a $ per user basis when
compared to other recent relevant social
network transactions
QPSA 4


74% of the world’s Internet users regularly
visit a social networking/blogging site 1
Facebook is the global leader: estimated
500M+ users 2 and $1B in revenue, driven
primarily by advertising & promotions 3

Social networks targeting specific
verticals/geographies continue to emerge

Given their unique ability to message among
connected users, social networks have
become irresistible to marketers looking for
more effective ways to deliver advertising &
promotional messages
U.S. Monthly Time Spent on Most Heavily
Used Internet Sectors (in millions of hours)*
906
Social Networks/Blogs
Games
E-mail
407
329
176
Instant Messaging
160
Video/Movies 156
Search 138
Software Info 131
Multi-Category…111
Portals
*Source: Nielsen, Apr 2010
1The
Nielsen Company, “Asia Pacific Social Media Trends,” July, 2010
Nielsen Company, “Social Networks/Blogs…”, June 15, 2010
3 InsideFacebook.com, March 2, 2010.
2 The
QPSA 5
Social Media Reach & Usage
by Country
 Brazil ranks top in social networking usage:
• 86% of Brazil internet users regularly use social media
Apr 2010 (Home & Work)
Social Networking / Blog Sites*
% Reach
Time per
of Active
Person
Country
Users
(hh:mm)
sites (#1 worldwide) 1
• 50% of Brazilian internet users regularly post
messages on social networks 2
• Brazilian social network users on average have 231
friends and connections (#1 worldwide) 2

Momentum in Quepasa’s Brazilian user base:
 Brazil accounted for 24% new users in Dec. 2010
 Quepasa.com has ranked the fastest growing social
network in Brazil on a percentage basis 3
 Mexico is
2nd
Brazil
86%
5:03
Italy
78%
6:28
Spain
77%
5:11
Japan
75%
2:50
U.S.
U.K.
74%
74%
6:35
5:52
France
73%
4:10
Australia
72%
7:19
Germany
63%
4:13
*Source: The Nielsen Company
largest source of growth
The Nielsen Company, “Social Networks/Blogs…”, 6-15-2010
Financial Times, 10-10-2010
3 Facebook Gold, Sept 2010
QPSA 6
1
2
Social Network Marketing Spend

Combined advertising and promotional
spending via Social Networks is forecasted to
reach $38 billion by 2015, up 440% from $7
billion projected for 2010 1
Social gaming showing strong momentum

Over 100 million social game users expected to
drive nearly $1 billion in revenues this year

Latin American social game users over index
compared to other regions in online spend:
Average Lifetime Value of loyal gamers is $300
in Latin America, compared to $258 in North
America2
¹Source: Borrell Associates: “The Social Networking Explosion: Ad Revenue Outlook”
2Source: Social Gold
QPSA 7
History

Founded in 1997 as a Latino online portal

IPO in 1999

Raised >$100 million in 10 years

Investment by Rick Scott Investments
and MATT Inc. (Alonso Ancira) in 2006

New management in Q4 2007

Re-launched Quepasa.com as a social
network in Q1 2008

Quepasa Operational Locations
Los Angeles
PRODUCT/BUSINESS DEV./MARKETING
Hermosillo
DEVELOPMENT
West Palm Beach
FINANCE/ADMIN/LEGAL
New focus on developing a world-class
technology platform
QPSA 8
Unique Positioning
Quepasa combines the best of the social web in an
authentic Latino environment ...
… serving the US, Latin America and around the world
in English, Spanish and Portuguese.
QPSA 9
TRADITIONAL SOCIAL NETWORK
vs.
Everyman’s tool
Authentically “Latin”
Rolodex of people you already know
A place to discover and interact with new
people
Open, content/games dependent on
third parties
Closer relationships with content sources
and viral distribution across social sites
Daily Traffic Rank Trend Comparison 1
bebo.com
sonico.com
myyearbook.com
quepasa.com
¹Source: Alexa.com
QPSA 10
Monthly Unique Visits
 27.2M total registered users
(Millions)
 Added 6.6M new members in Q4-10, up 27%
from Q3-10
12.4
14.4
16.0
16.3
17.4
16.4
Sept
Oct
Nov
Dec
 50.1M unique visits in Q4-10, up 34% vs. Q3
 Currently adding 72K+ new members/day
Jul
New Registered Users
1.8
(Millions)
2.1
2.0
2.3
Monthly Page Views
Aug
175
184
158
(Millions)
164
159
Aug
Sept
Nov
Dec
QPSA 11
2.2
134
1.4
Jul
Aug
Sept
Oct
Nov
Dec
Jul
Oct
Strong Traction Across all Latin America
24%
Brazil
15%
6%
55%
Relative Growth in Brazil
User base @ 8/1/2010
5.3M
Mexico
August user growth
716K
US
% growth
13%
User base @ 8/1/2010
1.8M
August user growth
446K
% growth
25%
Mostly across the rest of Spanish
speaking world
KEY DEMOGRAPHICS
Source: Facebook Gold, Sept 2010
60% Male
Age: 18-43
QPSA 12
Advertisement
Micro Transactions
• Distributed Social Media (DSM)
• Performance based pricing
• Leverage QP viral tools
• Social games on Quepasa
• Social game ad placement
• Publish on 3rd party platforms
• User payments: ARPU
• Agency/Brand $
QPSA 13

Quepasa DSM is a proprietary cross-platform
distributed social media advertising solution,
i.e., across Facebook, Twitter, Myspace,
others

Enables advertisers to target Latinos across
major social networking sites by leveraging
the user’s use of viral widgets, blogs and
sharing tools to spread the brand message

Contest winners are selected by who most
effectively shares ad content with friends and
family across the web

Provides real-time ROI metrics at a low cost
per impression
Viral Advertising Across Major Social
Networks of the World Wide Web
Quepasa DSM Core Platform
Sharing across social web and
via email
QPSA 14
Results:

E-Target: 150,000

E-Score: 196,202

Engagement Ratio: 1:65

Each entry drove 65
engagement activities

Viral Distribution: 66,598
shares across social web
Media Comparison:
UFC would have had to buy
>98 million impressions at
industry standard 0.2% CTR
to generate the total
engagements achieved by
this campaign
QPSA 15

$7.3M pipeline booked in 2010

Developing scalable version of DSM to be sold via resellers
$7,300
DSM Contract Growth
(Cumulative dollars in thousands)
$3,800
$250
Feb-Apr 2010
Acapulco Tourism
$550
$800
Apr-May 2010
Cozumel Tourism
July-Sept 2010
Ixtapa Tourism
Sept-Nov 2010
Primer Empleo
Political Campaign
Sept 2010 - Feb
2011
Mexico
Eco Campaign
QPSA 16
Sony Pictures TV Ad Sales

Premier ad sales company in Latin America

Ad base of >31M Latin American Households

First integrated, cross-media platform
expansion of Quepasa DSM



Grupo Expansión

A division of Time Inc. and largest Print/Digital
Magazine Publisher in Mexico

Reaches 11M viewers/users monthly

Cable TV/Internet ad package ─ broadcastlinked to online promotions
First Quepasa DSM print-to-digital crossplatform expansion

Online promotions “Powered By Quepasa”
iFrame drives traffic to Quepasa DSM
Print/digital ad package provides print
advertising linked to online promotions

Online promotions “Powered By Quepasa”
iFrame ─ drives traffic to Quepasa DSM

16 print properties & 7 Internet sites:
9 cable TV networks + on air & digital assets:

Quepasa recently partnered with eGames, a leading developer
and publisher of casual online games

Five new social game titles to be added to Quepasa.com
beginning in January 2011

Partnership also allows Quepasa to publish and distribute
eGames titles to other third-party social media platforms, like
Orkut and Facebook
 This introduces a new revenue channel for Quepasa as a
social game distributor in the Latin American marketplace
QPSA 18


Quepasa to leverage Social Gaming’s
proven ARPU model

30% of installs become active

1.5% become paying users1

Average ARPPU - $10/month1
users1
Quepasa Social Game Portfolio
Quepasa IP
3rd Party IP
Uniquely positioned to act as both a
platform for and distributor of games

Monetization layers in place in Brazil
and Mexico Q4

Games section redesign Q1

5-7 publishing partners in discussions
PagSeguro (UOL) – BrazilgamemonetizationonOrkut
ARPPU = Average Revenue Per Paying User
Published to
Distributed to
3 RD PA R T Y
P L AT F O R M S
1Source:
QPSA 19
Unique positioning
& differentiated
branding continues
to fuel growth
Distributed Social
Media provides
diversification
from traditional
advertising
driven models
Social gaming
allows
monetization of
users with a proven
ARPU model in a
rapidly growing
market
Competing by
adapting to a
post-Facebook
environment
QPSA 20
 Record revenues: $2.7M, up 135% over the previous quarter
 Record EBITDA: $1.4M vs. EBITDA loss in previous quarter. (See
Quarterly Revenue
Growth
(in millions)
important discussion about EBITDA in the appendix of this presentation)
$2.72
 5.2M new members, up 44% from 3.6M added in previous quarter,
reaching a record 20.7M total members, unique visits exceeded 43M
 Ranked as fastest growing social network in Brazil on a percentage
basis and second fastest in the world
 Introduced Quepasa DSM advertising campaigns for Ultimate
Fighting Championship and Ley de Fomento al Primer Empleo
 Launched ‘SnapMeUp,’ a popular social game that generated betterthan-expected initial conversion rate and revenue per user
$1.16
$0.34 $0.32
$0.05
Q3-09 Q4-09 Q1-10 Q2-10 Q3-10
 Partnered with Hollywood Creations to develop skill-based wagering
games for Quepasa's Open Social Developer platform
QPSA 21
Per User Valuation Basis
Date & Source
Implied Value
Per User
$500M raised via Goldman
Sachs & Digital Sky valued
Facebook at $50-$60 billion;
Analyst peg at $100 billion
CNBC, Jan. 3, 2011. Lou Kerner,
Webush Securities analyst & cofounder of Second Sharers.com, said
on the broadcast that Facebook
would be valued at $100 billion if it
were public
$100-$200
105.7M users April 2010;
$3.7B valuation per $200M
raise Dec 2010
Users per Twitter April 2010; capital
raise discussed in FT.com article Dec
23, 2010
$35
Series C $30M capital raise
WSJ 11-29-10; Venturebeat.com 1129-10
$15
Telefonica $93 million
acquisition
El Pais; August 4, 2010
$14
Stock price, fully diluted
shares outstanding, users at
Jan 1, 2011
Yahoo! Finance, Jan 3, 2011;
Company data
$13
QPSA
22

Quepasa sold 1,753,329 shares of common stock at $7.50 per share for net
proceeds of ~$12.6 million

Primary use of proceeds :
 Expansion of social gaming platform (including through acquisitions)
 Facilitate continued development of gaming IP
 Other general corporate purposes

Benefits:
 Allows accelerated investment and growth within the social gaming
market
▪ Includes launching and monetizing culturally relevant social games
within a Quepasa premium gaming channel
 Publishing these games on alternative audience networks
QPSA
23



Quepasa is an online social network, focused on the
Latino community
Quepasa.com Registered
Users Growth
(Millions)
Large & fast-growing membership base fueled by one
of the fastest growing web demographics
(Latino/Latin American)
Only known publicly-traded social network

Undervalued compared to recent transactions¹

Revenue momentum as monetization begins

Seasoned management team: 50+ years combined
experience in social network, web-based and
technology businesses
15.4
16.9
18.7
20.7
22.8
25.1
27.2
Jun Jul Aug Sept Oct Nov Dec
¹Acquisition of Tuenti by Telefonica for $93MM (source: El Pais, 8/4/10), implying $14/user; Facebook valued at $125/user (source: Lou Kerner, Facebook
$50 Billion Valuation; QPSA valued at $8.77/user (fully diluted as of 11-23-10)
QPSA 24
Company Contact
Mike Matte, CFO
Tel. 1-561-650-8075
[email protected]
Investor Relations
Liolios Group
Ron Both
Tel. 1-949-574-3860
[email protected]
QPSA 25
Senior Management & Advisors
• John Abbott - Chief Executive Officer & Chairman
 18 years of experience in Latin America Mergers & Acquisitions/Principal Investment/Management
 VP - JP Morgan Latin America Mergers & Acquisitions (1992 – 2005)
 Strategic & Financial Advisor to the Chairman of the Board of Altos Hornos de Mexico, S.A. (2005 – 2007)
 MBA from Harvard Business School
• Michael Matte - Chief Financial Officer
 17 years of experience as public company CFO
 CFO - Cyberguard, InTime Systems International and AmeriJet International
 Held Senior Audit Manager position at Price Waterhouse
 Certified Public Accountant
• Louis Bardov - Chief Technology Officer
 More than 21 years of experience in software development and technology management
 Senior VP - Development, Customer Care and Customer Retention at Match.com, and VP of Internet Development
• Brian Garrett – Vice President of Strategy of Business Development
 8 years of venture capital experience specializing in early-stage tech/media
 Co-founder & Managing Director of CrosscutVentures
 5 years experience as operator in early-stage Silicon Valley companies CommerceOne, Inktomi, Broadbase and Niku
 MBA from Stanford University



Keith Rabios – Advisor, VP Strategy at Slide, former Exec at Paypal, LinkedIn; Early investor in Youtube; Sequoia Capital LP
Kevin Hartz – Advisor, Co-founder/CEO of Eventbrite and Xoom; Early investor PayPal, Flixter
David Sacks – Advisor, Founder and CEO of Geni and Yammer, former COO of PayPal
QPSA 27
Weighted Average
Exercise Price
Shares
Shares outstanding 11/10/10
13,471,168
Equity Raise closed 12/20/10
1,753,329
Options outstanding
7,727,401
$
1.60
Warrants
4,465,000
$
3.07
Fully diluted shares outstanding, est.
27,416,898
Stock Price, Jan 4, 2011
$
12.95
Fully Diluted Market Cap, Jan 4, 2011
$
355,048,829
Number of Registered Users (Dec 2010)
Implied Value per User
27,244,332
$
13.03
QPSA 28
QPSA 29
EBITDA is not a financial measure calculated and
presented in accordance with U.S. generally accepted
accounting principles (“GAAP”) and should not be
considered as an alternative to net income, operating
income or any other financial measures so calculated
and presented, nor as an alternative to cash flow from
operating activities as a measure of the company’s
liquidity. Quepasa Corporation defines EBITDA as
earnings (or loss) before interest expense, income
taxes, depreciation and amortization, including
amortization of non-cash stock-based compensation.
Other companies (including the company’s competitors)
may define EBITDA differently. Quepasa presents EBITDA
because it believes it to be an important supplemental
measure of performance that is commonly used by
securities analysts, investors and other interested
parties in the evaluation of companies in a similar
industry. Management also uses this information
internally for forecasting and budgeting. It may not be
indicative of the historical operating results of Quepasa
nor is it intended to be predictive of potential future
results. Investors should not consider EBITDA in isolation
or as a substitute for analysis of results as reported
under GAAP. See “Reconciliation of GAAP Income (Loss)
to EBITDA (Loss)” in the chart to the right for further
information on this non-GAAP measure and
reconciliation of GAAP Income (Loss) to EBITDA (Loss)
for the periods indicated.
QUEPASA CORPORATION AND SUBSIDIARY
Reconciliation of GAAP Net Income (Loss) to EBITDA (Loss)
For the Three Months Ended
September
30,
2010
Net INCOME (LOSS) ALLOCABLE TO
COMMON SHAREHOLDERS
Interest expense
Depreciation and amortization of
property and equipment
Amortization of stock based
compensation
EBITDA (loss)
$
(346,048)
150,560
Per Basic
Share
Per
Diluted
Share
For the Three Months Ended
Per Basic
and
June 30,
Diluted
2010
Share
$ (0.03)
0.01
$ (0.02)
$ 0.01
$ (1,907,749)
150,643
62,310
0.00
$ 0.00
1,580,590
$ 1,447,412
0.12
$ 0.11
$ 0.08
$ 0.08
$
85,183
$
1,516,322
(155,601)
(0.15)
0.01
0.01
$
0.12
(0.01)
For the Three Months Ended
Per Basic
September
and
30,
Diluted
2009
Share
$ (2,966,143)
141,372
130,527
1,580,919
$ (1,113,325)
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING, BASIC
12,982,326
12,963,227
12,729,261
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING, DILUTED
18,614,946
12,963,227
12,729,261
For the Nine Months Ended
Net INCOME (LOSS) ALLOCABLE TO
COMMON SHAREHOLDERS
Interest expense
Depreciation and amortization of
property and equipment
Amortization of stock based
compensation
EBITDA ( loss)
September
30,
2010
Per Basic
Share
Per
Diluted
Share
$ (4,948,962)
450,762
$ (0.38)
0.03
$ (0.27)
$ 0.02
$
255,153
0.02
$ 0.01
4,704,692
461,645
0.36
$ 0.04
$ 0.25
$ 0.02
$
(0.23)
0.01
0.01
$
0.12
(0.09)
For the Nine Months Ended
Per Basic
and
September 30,
Diluted
2009
Share
$ (8,069,096)
416,055
$
394,030
4,119,773
$ (3,139,238)
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING, BASIC
12,951,513
12,722,412
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING, DILUTED
18,643,195
12,722,412
(0.63)
0.03
0.03
$
0.32
(0.25)
QPSA 30