With social media apps, who owns the user?

Watercooler CEO Kevin Chou on helping brands to build a fan base, but keeping control of the user

Half a billion people are on social networks, mainly to socialize. They exchange and share photos, constantly update their status, and they never fail to meet new people. They are there to talk about their favorite shows and their favorite sports teams. So how do you aggregate these fans and feed that passion? Watercooler has the answers.

In this segment, Bambi Francisco interviews Kevin Chou, founder and CEO of Watercooler, a service that creates applications for fans to aggregate fans around their favorite teams as well as their favorite shows.

(Here's the interview, partly edited)

BF: There is a huge ecosystem around social applications, social application marketing companies. So just explain who are the players in this emerging ecosystem and where do you fit it?

KC: The way that Watercooler is playing in the system is that we're a publisher so that means we own and operate the applications that we have on Facebook and on MySpace that add our application platforms. This is a little bit special in that we can run advertisements, ticketing offers, market research business all within this environment and it's powered by our own server. There is a growing way when people talk about Facebook applications or applications in general. The companies that have typically come up are Slide, Rock You, and Playfish. We are all kind of publishers in our space, also like Flixster and iLike. Se we own and operate our own environment and all the users that use our applications are kind of on our servers and in our own environment.

BF: You, unlike RockYou and Slide, are a third-party-application maker. So you work with big sports teams and networks. Is that the difference between your company and RockYou. Are they moving in that direction?

KC: It's different in our businesses. So Slide and RockYou make pure consuming applications. They're very general and when we first started our company, we did not go through the leads or the media companies. We started creating our applications for consumers as well. So when we first started the company in July of 2007, we launched our first application on Facebook.

BF: Was that the werewolves' one?

KC: No, it was called CSI. That was our first application on Facebook. It was for the fans of the hit show CSI and it gave the fans an ability to get together and kind of talk about the show. Their favorite quotes from the show, as well as their favorite moments and so forth and share that with their friends and family. And so after we started building our applications, we started working with all of the major media companies. So at this point we were working with every major media company as well as several of the studios. On the sports side of our business we are working with about 15 different sports teams.That's just the difference between the business model of Slide and RockYou. At the end of the day we own our applications.

BF: When you create an application, do the brands that you work with also own the end user?

KC: No we generally end up owning the end user still and the brands are basically reaching those users as they're passionately engaged in our environment. So it's almost like you're going to ESPN.com reading your favorite news about sports and then Toyota may come in as a sponsor by owning the user. ESPN still own the user.

BF: OK. When you work with a show like ER or Friends, NBC owns that user?

KC: No, we own that user, but we basically share that data through our new product offering with our media partners. We show them what the fans are interested in in terms of shows progressing along. Fans are really rating every episode of that show. We share that kind of data with our media partners.

BF: And so just to touch on the philosophy behind the decision to own or not own the user. I know since I've been in a situation where we have users ourselves and working with partners. So the question is always,"Who owns the user?" Do you ever get any push back from brands that say they want to own their user? How do you turn them around and what is the value in what you are doing that they would give up something that is not as valuable as owning the user?

KC: We think of ourselves as a media company. Part of our business model is a media business model whereas the difference between Buddy Media and what we do is that we are bringing the sponsor in where our fans are really engaged with their favorite sports teams, and their favorite television show. Buddy Media has a great program where users are only able to interact with just that brand. That's been challenging when you look at the top applications on Facebook. Almost all of them are owned and operated by a publisher with ongoing engagement that excite that users and keep them coming back. A lot of the branded applications that launch and get some interest and excitement. Brands generally move on.

BF: So they basically have to create a new campaign. So this went in a totally different direction. We talked about who owns the user and that is a very important topic but we are definitely going to have you back so we can talk about your different applications and what you're doing to engage the fan base for your client.

Thank you Kevin.