Ann Arbor’s BodegaBid Bets There’s Real Profit in Virtual Currency

11/8/10

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Zombie, whose virtual items can also be traded in the BodegaBid marketplace on Facebook for credits. Bodega credits, in turn, can be used to purchase virtual goods for either game.

Sendo says BodegaBid makes money in the same way big gaming companies like Zynga and Playdom do. Gamers use PayPal, a major credit card, or mobile payments, or complete advertising offers, to purchase or earn Bodega Credits. Gamers then use the credits to trade virtual items in Bodega’s marketplace on Facebook. Bodega also charges gamers a small “transaction fee” for trading on its marketplace.

Sendo hints that more deals with top game developers are coming soon to greatly widen his market reach.

Brian Balfour, founder of Cambridge, MA- based Viximo, which also connects social app/game developers with social networks, says that Sendo certainly has picked a niche with huge market potential. The virtual goods/social games space represents a “pretty attractive, massive, lucrative, and growing audience,” he says.

The problem, Balfour says, is that many social games are still in an immature stage, and developers are focused heavily on grabbing as much market share as possible in the still-infant industry. As a result, they have little interest in reaching out to their competitors to help create a demand for virtual goods. Maybe in a year or two that will happen, but not yet, he says.

On the users’ side, the demand does not exist yet, either, Balfour says. “When they buy a farm in FarmVille, users don’t perceive that as owning something,” he says. “They see it as entertainment value, like I’m paying $4 to rent a movie.”

Balfour points to developers PlaySpan and LiveGamer, which he says first offered, then … Next Page »

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  • Joe

    Mark Sendo has not changed. He is a full blown con-man by nature and will always be a terrible human being. Just ask any of the countless investors, employees, and customers he has scammed over the years. In regards to Bodega, they already tried operating strictly as a virtual only marketplace just last year and failed. Just type in “bodega virtual goods news” or “bodega techcrunch” in a search engine to read articles about how Sendo was setting up the company to sell other company’s games virtual items without their permission and allowing users to trade them in for real cash (illegal gambling). Bodega has had many different business models and they have all failed miserably. I repeat, do NOT do business with this man.

  • Michigander

    Did Xconomy research Sendo and his love affair with SEC?

    http://www.sec.gov/litigation/litreleases/lr17166.htm

    The Securities and Exchange Commission announced today that on September 28, 2001, it filed civil charges against Internet Money.com, Inc. (iMC) and its largest shareholder and former CEO, Mark Sendo, a 39 year old resident of Ann Arbor, Michigan, with fraud in the offer and sale of iMC stock. iMC is an Ann Arbor based start-up company that purportedly is developing a secure Internet payment device. The Commission’s Complaint alleges that, from at least December 1999 until March 2001, iMC and Sendo raised at least $440,500 through the sale of common stock to at least 23 investors. The Complaint alleges that iMC and Sendo made false and misleading statements in business plans provided to potential investors about the individuals associated with iMC. First, iMC falsely represented that various high profile figures in the Internet and “payment systems” industries had invested in iMC, served on iMC’s Board of Directors or were a part of iMC’s management team. These misrepresentations were designed to provide potential investors with the impression that highly successful business executives were guiding the development of iMC when, in fact, Sendo directed iMC’s operations. Second, iMC’s offering materials present a misleading portrayal of Sendo. Sendo is described in offering materials as a successful professional who worked for highly reputable brokerage firms. The offering materials, however, do not disclose that Sendo pled guilty to federal criminal wire fraud charges and was enjoined in a Commission enforcement action for his role in a securities fraud.

    The Commission seeks injunctive relief against iMC and Sendo for violations of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, and civil penalties against Sendo.

    For tips on how to avoid Internet “pump-and-dump” stock manipulation schemes, visit http://www.sec.gov/investor/online/pump.htm. For more information about Internet fraud, visit http://www.sec.gov/divisions/enforce/internetenforce.htm.

    To report suspicious activity involving possible Internet fraud, visit http://www.sec.gov/complaint.shtml.

  • http://www.xconomy.com/author/hlovy/ Howard Lovy

    Yes, if you read the story, Sendo’s troubles with the SEC are addressed and Sendo is given a chance to address them. The reason I chose to profile BodegaBid was its recent recognition at the TiE Midwest Awards. I was not aware of Sendo’s troubles with the SEC until after I started researching the article. So, I mentioned it and gave him a chance to respond. I suppose a larger question is whether a past mistake, for which Sendo has paid, should bar him from launching any future business. For how many years, exactly, should one pay?

  • Shashi

    I agree with Howard.

    I am working with mark from last one year and I have found very honest and transparent person.

    About bodega, I have seen it very promising. Facebook and other social networks do change their business models and strategies so the company needs to change its model also as per them, there is nothing wrong in it. Is it?