HispanicBusiness

When Quepasa.com re-launched 15 months ago as a full-fledged social networking platform, its Web traffic soared.

But the money didn't follow.

In June, the Nasdaq stock exchange informed Quepasa -- the world's largest Hispanic-oriented social networking site -- that it was falling short on the revenue requirements for listing on the Nasdaq composite index. Quepasa had little choice but to remove itself from the list.

But now, executives at Quepasa believe the site is poised for profits.

The basic premise behind the company's elaborate strategy is simple: tap into the human desires that cause us to show off, compete, trade tokens of affection, and, above all, flirt. To such an extent, of course, that users feel compelled to pay.

"Everyone loves attention," John Abbott, Quepasa's 39-year-old CEO, told HispanicBusiness.com. "That's what people seek when they go to these social-networking sites. It's got to be tied to some basic sort of behavior -- like meeting people or being noticed."

Quepasa recently launched a new online dating feature. Soon to come are many more applications allowing users to compete and strut their stuff. They'll include a World Cup soccer game in the mold of fantasy football, as well as a "Pimp my Ride" feature. All told, Quepasa plans to launch 10 new applications by the end of March 2010.

More and more, social-networking sites are discovering that charging fees for premium services -- rather than relying solely on banner ads -- is the path to profitability.

"Banner ads do not do well," explained Dennis O'Neill, Quepasa's head of investor relations. "People don't pay attention to them -- they don't click on them."

Of course, to reap rewards, a company also needs a wide audience. On this measure, Quepasa has delivered: In the past year, its membership has tripled, to nearly 6 million.

In addition, Quepasa recently landed a sponsorship from the tourism board of the Mexican government. This will be an ad, but a new kind of ad -- one that thrives on user participation by taking the form of a contest giving away free vacations to Mexico.

Quepasa refers to itself a tri-lingual site, catering to customers in Spanish, Portuguese and English. Its users hail primarily from the United States, Mexico, Brazil and Spain.

It isn't alone in its struggle to turn a profit.

In the strange new world of social networking, attracting millions of eyeballs is no guarantee for making buckets of money in ad revenues.

Take Facebook, the king of social networking. Despite having amassed more users worldwide than the U.S. has people, Facebook was in business for more than five years before eking out its first-ever profit last quarter.

Quepasa's ongoing effort to turn volume into valuation involves little that hasn't already been invented. The company has cherry-picked the best monetizing practices of other social-networking sites and given them a Latin twist.

"The advantage of the Latino market is it lags the English market by two or three years, so you can vet what works," O'Neill said.

For instance, while Facebook also has dating services, Quepasa's new application is named Papacito, a slang term for a Latin male who is easy on the eyes.

Released in mid October, Papacito includes a game allowing users to flirt with each other by secretly selecting the objects of their desire as their "papacito" or "mamacita." Users who participate for free are allowed to guess their admirer from a lineup of 16 head shots. People can pay the site for more guesses, or forgo the guesswork altogether by signing up for a $1.99-a-month subscription.

"If you don't want to miss the love of your life, you might want to pay the two bucks," laughed O'Neill.

The site's other major attempt at cashing in is tied to the concept of virtual gifts. These are little virtual decals people can send each other to convey affection. Among them is a little dog waving its tail, a box of chocolates, a shot of tequila or a diamond ring.

"It's sort of counter-intuitive, but one trend we're seeing on the Internet is people showing more of a tendency to want virtual gifts over real gifts," Abbott said.

The virtual trinkets are purchased with QDollars, which are purchased with real dollars. At $2.99 for 400 QDollars, a giant jeweled ring costs about $1.25.

It might sound like pocket change, but the practice can be extremely profitable: Facebook's virtual-gifting feature nets the company a handsome $36 million a year in sales.

Launched in 1997, Quepasa came into being as a news portal for Hispanics. The value of its stock skyrocketed during the dot-com boom in the late 1990s, but evaporated when the bubble burst around 2001. Leaders came and went. In 2005, the company unveiled its social-networking component. But it wasn't until February of 2008 that Quepasa dumped its news portal and went exclusively social.

The new applications are the next phase of what has been a patient journey for Quepasa.

The previous phase was all about growing the membership.

In January, the company announced a strategic partnership with Playboy Mexico to launch a model search to find the next Playboy Mexico Playmate of the Year for 2009. In May, the site's move to become available to customers in Brazil was a success: today, 20 percent of its users are from that country. In June, the site became the one and only voting hub for a show, styled on American Idol, called Batalla de las Americas (Battle of the Americas).

But the verdict on the bottom-line question is still out. Quepasa executives don't seem to have much doubt.

"Forty-two thousand people signed up yesterday," O'Neill said. Accordingly, he anticipates profitability in first quarter of 2010.