The San Francisco Business Times today published a story on hi5's transition into the social games industry. Patrick Hoge interviewed hi5 President and CTO Alex St. John last week, discussing the current state of the industry, key players in the space, current challenges that developers face, and the opportunities that hi5 sees. Patrick quotes Alex discussing hi5's approach to building an online social environment centered around games: "St. John said hi5's strategy is to become the 'playground' where people using both real and assumed identities can socialize around games. While not developing its own games, it will use 'addictive' gaming features like 3D avatars in Flash programming, a store for virtual goods and gifting, he said. 


Last week, for example, hi5 started selling 'prank' gifts in which a user's avatar can be dispatched to do mischief on other users' homepages -- like smashing what appear to be holes in their computer screens with a baseball bat." To read the full article, visit the San Francisco Business Times.

Google has been headlining in the news over the last couple weeks with their recent acquisition of social app developer Slide for a reported $228 million, and rumored developments of a social network for games called Google Me. This week, TechCrunch reported that Google purchased Jambool, creators of the payments platform Social Gold, for $55 million with another $15-$20 million in an earnout. Social Gold enables developers to monetize their social applications through direct payments, and was founded by Amazon veterans Vikas Gupta and Reza Hussein. Additionally, it was reported that Google Ventures, the venture capital arm of Google, supposedly made an estimated $3-5 million investment in popular iPhone games developer ngmoco. The investment reportedly valued ngmoco above $100 million, and this comes on top of a $25 million Series C round ngmoco closed in February this year. 

Zynga pulled Farmville from MSN Games portal this week. Just this past February, in the midst of a fairly public battle with Facebook, Zynga announced that is would be bringing Farmville to MSN in an effort to diversify away from Facebook platform. According to figures from AppData, FarmVille has lost more than 20 million users in the past four months since Facebook enacted changes to its app notification system. Although Zynga hasn't yet explained why the game was pulled from MSN, this isn't the first time one of the studio's popular titles has disappeared from a site. Three months ago, it announced the removal of YoVille from teen-targeted social network Tagged. Zynga also announced earlier that they would be partnering with Yahoo! Games, and Farmville is still not available on the portal, so it's unclear if it is still coming to Yahoo! and whether Zynga will continue to bring the title to networks outside Facebook.

eMarketer expects that marketers will spend $220 million worldwide to advertise in social games and social applications in 2010, supposedly increasing 60% in 2011. In the US alone, those numbers total $142 million in 2010, and an estimated $192 in 2011. While the dominant revenue stream for many social games has been the sale of virtual goods, it's clear that there is a lot of opportunity with advertisers as well.

Just a reminder that next week (August 16-18), hi5 representatives will be attending GDC Europe in Cologne. If you're interested in meeting with our team during the conference, please contact us to request a meeting: http://developer.hi5.com/php/contact.php

Today hi5, a leading social gaming site, announced that it has closed a second round of venture capital financing with a total of $14 million. The lead investor for this round was Crosslink Capital with a Crosslink General Partner, Jim Feuille, joining hi5’s Board of Directors.

“hi5 is among the companies leading and defining the rapidly emerging social entertainment category, and this round will enable us to fully capitalize on what is already a massive market opportunity,” said hi5 CEO Bill Gossman. “Crosslink has been at the forefront of this revolution with investments in Pandora and Like.com as well as successful public market experience with Omniture and Ancestry.com, so we are thrilled to have Jim’s expertise joining the company.”

The initial round in July 2007 resulted in a gain of $20 million. Both rounds were led by Mohr Davidow and the funding will be used to expand hi5 operations, including the hi5 virtual currency and gift store, the hi5 Games channel, and the hi5 Stars animated avatars.

“The social entertainment category is experiencing explosive growth, and hi5 has the global audience, strategic vision and seasoned management team to be a significant long-term leader in this market,” said Feuille. “hi5’s unique combination of social game mechanics, ownership of a social graph and a third-party game platform positions the company well for success.”

The social network hi5 is expected to begin announcing plans to raise money for its efforts to become a social gaming platform. This news comes after late last year when hi5′s growth began declining and the company changed focus to become a social gaming company. The transformation would allow hi5 to generate revenue from virtual goods.

Since the social gaming announcement, hi5 has hired game industry veteran Alex St. John to help hi5 regain its focus on the movement. Alex has stated that having hi5 with a gaming focus will allow it to have an advantage over the current Facebook app platform.

Social Networking Web sites have been out there for use over the Internet for the reason that mid-90s, however it is only lately that social networking sites have turn into extremely in style amongst virtually all age groups. That is massively due to the Internet 2.zero know-how that made using social networking websites so much enjoyable and easier. Social networking website design technology has been advancing in leaps and bounds.

The rise within the reputation of social networking sites have made it sprout like mushrooms right here and there. An increasing number of developers create new social networking websites that are but to develop into the following massive thing within the social community industry – and that is something that isn’t that simple to achieve being that there are already plenty of social networking websites within the market.

Here’s a listing of the highest 10 best social networking web sites world-broad:

Digg – This can be a social networking web site that permits its customers to share and search for content from wherever on the Internet. Digg in my opinion is one of the best social networking website ever designed.

MySpace – This was launched in 2003, and in just a few years time, it has develop into the preferred social networking website for teenagers and even adults. Aside from an interactive profile, customers are also allowed to share footage, videos, music, and blogs by means of their network.

Facebook – This was initially designed for Harvard students solely, but in 2006, it was opened to be used publicly. Since then, Fb has turn out to be a very talked-about social networking web site even amongst professionals. Though it is much like MySpace, Fb means that you can add totally different pre-set purposes like a chat widget or mini video games to your profile.

YouTube – What was primarily a video-sharing web site, YouTube is now one big social networking sensation. Aside from just viewing movies, users can now create networks and subscribe to a user and get up to date on their newest video upload.

Orkut – Orkut is a web based social neighborhood designed by Google and named after its creator. Yes even google is in the social network design game! Just like most social networking websites, Orkut lets you ship messages to associates, share images and videos. It additionally contains a Srapbook and Communities where one can create a neighborhood of his own of no matter matter he likes. That is the most popular social networking website and Brazil.

Hi5 – All through 2007, Hi5 was one of the high 25 most visited web sites on the Internet. It is a quick rising social networking web site, and very like the remainder, Hi5 additionally options an interactive profile, photo sharing, and it also allows users to join totally different groups and communities in keeping with their interest.

Flickr – As one of many earliest Internet 2.0 applications, Flickr is also an internet community aside from being an image and video internet hosting website. Flickr is a very fashionable image sharing web site and it additionally allows person to vote for his or her favourite photos. Images can either be set to non-public viewing only, which means solely your contacts can see your photos, or it’s also possible to have them stored publicly.

Friendster – This was launched in 2002. A yr sooner than MySpace and so it’s stated that Friendster is the source of inspiration of the former. Friendster is predicated on the ‘Circle of Friends’ idea and shows connection paths which helps users to view people from around their network whom they could really know, but have not interacted with yet. Majority of its members are from Asia, and it’s truly the 2nd most viewed website in the Philippines.

Twitter – It is one of the quickest growing website functions today. This doubles as a social networking web site and a micro-blogging service that permits users to send updates, or more commonly often known as “Tweets” over their community in a textual content-based mostly publish of solely a hundred and forty characters in length.

Bebo – Founded in 2005, this social networking web site can be utilized in many various countries. It permits customers to create profiles, develop buddy lists, and be part of networks. Profiles additionally feature quizzes which you’ll have your friends take, video uploads and video links from YouTube.

It’s no secret that hi5′s president Alex St. John is not happy with Facebook’s dominance of the social gaming world along with Zynga’s business practices. Well, then it should be no surprise that he’s back, with a vengeance to stir the pot once again:

“Facebook stumbled onto a really exciting new gaming phenomenon and they’re going to walk away from it or accidentally screw it up. WildTangent, Real Networks and Big Fish [specialised casual gaming services] are immensely grateful that Yahoo screwed up gaming and gave us their audiences. Facebook will do the exact same thing,” he said.

Not only that, St. John also takes no prisoners when it comes to the social games that people are playing on Facebook: “The Zynga and Facebook guys are just scratching the most naive edge of online commerce models,” he said. “The commerce platform that I built at WildTangent and that Big Six has built are decades ahead in sophistication and capability. It’s rolling out now and we’re going to show the social media industry what it means to really make money from these games.”

So, what do you think? Does St. John have a point regarding Facebook’s future? Let us know below.