Teen virtual world Meez sees profit

Meez, a start-up that expanded last year from an avatar creation service into a full-out virtual world for teens, is touting some good news: it's been profitable since April and "every month is better than the last month," CEO John Cahill told CNET News.

Right now, Meez has about 13 million registered users, 3 million unique hits per month, and only 20 full-time employees plus about 10 contractors.

Where's the money coming from? Premium subscriptions, ads on the free version of the site, and virtual goods bought and sold with its internal "Coinz" currency--which includes a mobile virtual-gift deal with Verizon.

The company is making this announcement in conjunction with the debut of its MySpace application, which should be live on the News Corp.-owned social network shortly. It's Meez's first integration with a big social network.

"The MySpace app is designed to allow people from MySpace to use the Meez virtual world, and people using the virtual world on Meez.com will be able to integrate with the MySpace users," Cahill explained.

So why is the company's first social-network platform product built on MySpace, which has had well-documented drops in traffic? The demographic and culture are a better fit, Cahill said, pointing to MySpace's younger-skewing user base as well as a culture that encourages meeting new people online.

"We are working on a Facebook app as well, but every time we surveyed our audience, our audience was very much more MySpace-based than Facebook," Cahill said. "It's about discovery. It's about finding new friends. On Facebook, your friends actually tend to be your (real-life) friends."

Getting onto social platforms will mean that Meez is starting to compete for attention (and that other buzzword, "engagement") with social gaming behemoths like Zynga and Playfish. Brushing elbows with the companies that already have come to dominate entertainment on social networks is par for the course, Cahill insisted.

"We're all competing for Internet time," he said.