Getting Users Over the Hump:

Boosting Conversion to Paid

Lee Clancy

SVP/GM

IMVU Inc.

October 12, 2010

Virtual Goods Summit - West

Agenda

• What is IMVU?

• IMVU’s 12 Lessons of Conversion

• Q & A

What’s IMVU?Agenda

An online community where members use 3D avatars to meet new people,

chat, create, and play games with their friends

What’s IMVU?What is IMVU?

Company Overview

• Founded in 2004

• Based in Palo Alto, CA

• 100 employees

• 3 institutional rounds

• $30M raised

Business Snapshot

• 3D avatars

• Virtual goods

• Social network

• Games & music

• 50M+ registered users

• 10M+ uniques/month

Global unique visitor data from Quantcast: http://www.quantcast.com/imvu.com

Registered Users (millions)

0

10

20

30

40

50

60

Dec-0

5

Mar-

06

Jun

-06

Sep

-06

Dec-0

6

Mar-

07

Jun

-07

Sep

-07

Dec-0

7

Mar-

08

Jun

-08

Sep

-08

Dec-0

8

Mar-

09

Jun

-09

Sep

-09

Dec-0

9

Mar-

10

Jun

-10

Revenue

$0

$2

$4

$6

$8

$10

$12

Q1

20

06

Q2

20

06

Q3

20

06

Q4

20

06

Q1

20

07

Q2

20

07

Q3

20

07

Q4

20

07

Q1

20

08

Q2

20

08

Q3

20

08

Q4

20

08

Q1

20

09

Q2

20

09

Q3

20

09

Q4

20

09

Q1

20

10

Q2

20

10

Q3

'10

est

IMVU Revenue ($ Millions Per Quarter)

$40M+ Annual Revenue Run Rate

Profitable July 2009

Attractive Demographics

70% Female

60% 18+ yrs old

60% USA

Diverting new users

directly into the store

= 20% lift in number of

users buying goods

#1: Take them to the store

#2: Make them an offer they can’t refuse

$0.99 offer =

150% increase in

VIP members

#3: Give them many ways to pay

#4: Give them new ways to pay

+

=15% lift in VIP signups &

revenue

#5: Give them cool ways to pay

$50 “3D Prepaid Card”

• Collaborative effort with

specific retail partner

(Target)

• Higher price point

resulted in incremental lift

• “3D collectable art”

reinforces brand

#6: Keep your inventory fresh

4+ Million

Virtual Items

April 2004 October 2010

#7: Give them free stuff

Gifts available only

with purchase = 10%-

20% lift vs. no gift

#8: Make spending cool

#9: Let them be creative

More than 1/3 of

IMVU revenue comes

from Creators

#10: Turn users into sellers

The top 20 virtual

items sold

represent only 0.2%

of all credits spent

#11: Give them new ways to spend

3 new games = 10%

of credits sunk via

entire catalog

#12: Speak their language

Coming soon!

Tune in next

time for lift…

Shameless Plug

We’re Hiring!

www.imvu.com/jobs

Q & A

Lee Clancy

SVP Product Management

& GM Direct Revenue

IMVU Inc.

lclancy@imvu.com

www.imvu.com/jobs

Customer

Money

Credits

IMVUCreator Credit Sink

IMVU’s Virtual EconomyIMVU’s Virtual Economy

Consider secondary markets

• Users get cheap credits (vs. IMVU’s retail price)

• Creators get to cash credits out for real dollars

• Resellers earn spread between creator sell & user buy