VZ-Netzwerke GmbH is the company behind some of Germany's most successful social networking sites for people under the age of 30, namely meinVZ, schuelerVZ and StudiVZ. To further strengthen the sense of community of site members and to create new revenue streams, VZ is now launching a prepaid mobile phone plan that can be booked by community members and other mobile phone users. Sven Bagemihl, VP Sales, explains why they have decided to do this. Mr. Bagemihl joined VZ three months ago but previously served as an independent consultant for the company. He says that even though they are launching a mobile phone service, social networking sites still are very much at the heart of their business. SchuelerVZ, their site for secondary school pupils, has a near 100% share of the German market in the 12-16 age bracket. "Germany has strict data privacy laws that German- based social networking sites are obliged to adhere to," he explains. "As a result German parents are more likely to trust German-based sites than say Facebook." Mr. Bagemihl says that VZ has 'just about every data security seal you can get as a social networking company'. "We take this very seriously. A team of hundred people tracks down everything out of the ordinary. The kids need to be protected." From a commercial perspective, he adds that the 12-16 age bracket is increasingly important to advertisers. Not only do young people have more disposable income at younger ages, but they have significant influence over family purchases. As a result, there is now a whole segment of the marketing industry devoted to figuring out how to sell things to kids. Banking on the attractions of its young user community to advertisers, VZ generates revenues almost uniquely through general media sales right now, but is actively looking to find alternative revenue streams. That partly explains their decision to launch a prepaid mobile service. "Solidifying the VZ community is another reason for it," Mr. Bagemihl points out. "We've created a mobile version of our online social networking sites and are allowing community members to SMS chat with each other free of charge. We believe that's going to be one of the main attractions of the service especially for the younger teenage group. We're also working on enabling free VoIP calls for community members and creating a Facebook plug-in. " Mr. Bagemihl admits with great honesty that he has no idea how successful the mobile service will be. "We are launching it in the middle of summer which is the worst time for any new mobile service as people are on holiday and traffic is low. This is a deliberate move though as we don't the service to crash should it prove to be instantaneously popular. We've got a good feeling about it; we've already got over a 1,000 pre-registered users. But even if it's not going to be a massive success as a stand-alone product, we'll have yet another tool to retain our customer base." top - home