Zaryn Dentzel shows up for the meeting just a bit late, and extends his hand, saying "Hi, I'm Zaryn," with the sheepish smile of someone who has overslept. It's 10am, but it's not unusual for Tuenti employees to dine late in front of their computer screens, and emerge later in the morning. There are now more than 200 of them. "We are hiring like crazy, more than 50 new people since January," says Zaryn. "Telefónica was a little concerned when I told them."
About to turn 28, Dentzel remains true to style: strict office attire (sandals, jeans and a t-shirt), hip Californian accent, and peels of laughter that echo round the room. He hasn't done too badly for himself. He founded Tuenti five years ago, sold it to Telefónica last year for 70 million euros, and is now reveling in what he has managed to accomplish. "They always told me that I wouldn't be able to take on Facebook, and here we are."
With nearly 11 million registered users, Tuenti leads Spain's internet traffic (according to comScore). Visitors spend an average of 82 minutes a day on the site. Six million videos are viewed per day, and 64 percent of users are under age 24. The latest from Nielsen, however, is not quite as optimistic, showing that visits are shorter and have fallen by 24 percent.
Question. Is Tuenti losing momentum?
Answer. Not in the least. I don't care what Nielsen says. Their measurements are way off. Last month, we had 38 billion hits, and more than three million new users have signed up in the last year. We have more than 8 million individual visitors each month. These are strong figures.
Q. Yeah, but Facebook's figures exceed them. Is it true that at a certain age, people switch from Tuenti to Facebook?
A. I'll be honest. People think that because we are a Spanish company, we are not as good. We've had to fight against this since the beginning, and I think we will have to fight against it until the end. But the truth is that we have very innovative technology and first-class talent.
Q. Some companies have complained of difficulties in personalizing their pages, or in increasing their exposure. In the end, they go to Facebook or open a Twitter account.
A. I don't consider Twitter as competition, and the pages for companies on Facebook are horrible. They are hidden in your profile, people become a fan of a certain brand and then never return to the page; they create false profiles. What is more worrying for me is the growth in cellphone use. A year ago, online time was spent on social networks. Today, it still is, but we are using photo or geolocation applications on our cellphones to get there. This fragmentation is the new competition.
Q. Why do you think the Telefónica deal generated so much criticism?
A. It wasn't so much criticism as pessimism. Maybe it's because I'm American, but I have never been able to understand what Telefónica means in Spain. I've always viewed them as an asset for Tuenti. I was able to raise 20 million eurosin financing, but when you are competing with companies that are raisingone billion euros, you are left a little short. That is why we needed a partner, and Telefónica has helped us out a lot.
Q. You're not afraid of losing your identity as a social network through the partnership?
A. Maybe if they were interfering in the company, yes, but that is not the case. In Tuenti, there are only Tuenti people- there are no Telefónica people. And we have finished all the details of the sale.
Q. Did you sign any agreement on contract duration?
A. We have a complicated partnership agreement, a document with a long list of things on it. If I want, I can leave tomorrow, but we have a business plan and I'm here to make sure that it's successful.
Q. Last year, your revenues were more than 10.5 million euros. What are you expecting this year?
A. I'm not that interested in sales. I'm aware of them, but they are so far down on my list of priorities that I don't worry about them. Despite what Nielsen says, there are more users and more pages are being visited. We will do a lot more than in 2010.
Q. You recently updated your video portal. Are you planning to rent movies and series?
A. Yes, we are working on it. We want to rent movies and other video content, and use other ways of buying them apart from advertising. We think we can add a lot of value to the viewing experience by allowing it to take place while you are connected to your friends. At the end of the day though, somebody will have to pay for it, whether by view, monthly fees or advertising.
Q. Will you launch it this year?
A. If it were up to me, we would launch it tomorrow. But negotiating with the movie studios is complicated.
Q. Will this be based solely on advertising, or will this change?
A. Advertising this year is really bad. Even so, we are still one of the few companies in Spain registering rising investment. We have also tripled our social gaming revenues in the last month. They now represent about ¤1 million per year. In the future, we are going to do a lot of business on the cellphone.