Gaia is NOT in the red.

[[ .NK. ]]

And now, allow me to present my research that leads me to believe that Gaia is not, in fact, desperate for money.
First of all, lets look at how much it costs to run Gaia a month. $1,500,000, roughly.

Okay, great. While I no longer have proof of this (as it was taken down :3), on the zOMG! mini page, there was a quote that stated that Gaia makes more than $1 million from in-game purchases alone! Not convinced? There are numerous news articles that confirm it. Please note the quote below:

Source

Sherman says that in the afternoons, they have over 100,000 concurrent users. "We call ourselves the fastest growing online hangout for people in their teens and 20s." And those teens bring dollars, too: GameDaily BIZ can report that Gaia pulls in well over $1,000,000 per month from in-game item purchases.

Interesting. Unfortunately, we don't know exactly how much "well over $1,000,000" is. It could be $1,100,000, or it could be $1,700,000. We'll never know. But we do know that it's at least $1,000,000. Now let's add in all of the other factors that get Gaia money.

Ad revenue: Unfortunately for us, my resource for this part of my research is currently down (Alexa.com), but on my last check, it stated that Gaia makes an estimated $7,000 a day from their ads. So we'll say $7,000 x 30 (days) = $210,000 a month.
[Edit]: When I originally wrote this, I forgot to quote the source, and also, now, several months later, the figure has dropped, so I'm updating it. I also quoted the source wrong. It is not Alexa.com, but rather websiteoutlook.com. And as of writing this (4/13/09), the number has dropped dramatically to $3722.85 daily. And $3722.85 x 31 = $115407.42 a month.

Sponsorships: We now have information regarding sponsorships! Please refer to the quote below from this article.

Source linked above

Hyrkin also looked at the various sponsorships Gaia has seen. For a one-month sponsorship, the company typically draws $100,000 to $200,000, but he says the company is beginning to see deals in the higher six figures.

There's so much I can do with this that I'm not sure where to start.

First of all, allow me to point out that the average sponsorship is $100-$200k, as noted above. Next, let's look at the sponsorships we received last month, in March.

- Haunting in Connecticut (3/6)
- Wonderwall (3/11)
- Skittles (3/16)
- Henry Hatsworth (3/17)
- Twilight (3/19)
- Men's Warehouse (3/23)
- Monster Learning (3/30)
- 17 Again (3/31)

Of those, 17 Again, Monster Learning, Men's Warehouse, Skittles, Henry Hatsworth, and Haunting in Connecticut are the ones that have lasted the longest and gotten the most exposure here on Gaia. Monster Learning and Skittles have been around for several months/several sponsorships. Men's Warehouse has its own shop on Gaia. 17 Again, Haunting in Connecticut, and Henry Hatsworth all have flash based ads around the site. Twilight was the shortest and most unnoticeable (as far as exposure) sponsorship of them all.

Without considering price difference (we would need to factor in Gaia's rise in popularity and traffic [or drop, I'm not honestly sure] from last year until now), I would guess that all of those sponsorships for March alone netted at least...

...Wait for it.

$1,200,000. $1,200,000.

Estimated pricing:
- Haunting in Connecticut - $200k (lots of exposure, its own profile)
- Wonderwall - $100k (single announcement)
- Skittles -$200k (lots of exposure, its own profile and world)
- Henry Hatsworth - $100k (mid-exposure, lots of ads, its own profile)
- Twilight - $100k (single announcement)
- Men's Warehouse - $200k (single announcement, its own shop)
- Monster Learning - $100k (single announcement)
- 17 Again - $200k (mid-exposure, announcement, its own profile, lots of ads)

I'm honestly floored. This is not taking into consideration the fact that some of these may have netted even more money than I listed. And those sponsorships alone bring them $300,000 short of a monthly bill.

RL Merchandise Store: I don't expect this to be much at all, considering the fact that it's not updated that often, but I definitely think it should at least be around the $10,000 a month mark.

Aquariums: The quote from above doesn't include the Aquarium. The article is dated at 7-25-2008, and the Aquarium came out on 9-24-2008, two months and one day later. Considering the fact that Aquariums are quite popular, and the fact that the items are so expensive, I'd say that this definitely helps shove Gaia a fair bit over that "Well over $1,000,000" mark.

[Updated and rewritten:] Now that I've acquired (thank you for finding it!) more information regarding Gaia's income, I'm sickened. If we completely forget about everything but the sponsorships and the income they get from cash, that's $2,200,000 on their own. That doesn't include the Aquariums, RL Merchandise store, and Ad Revenue. It also doesn't include considering the fact that there have been more expensive EIs released than normal lately.

That's at least $700,000 of profit a month.

So why, Gaia? Why do you make such expensive EIs? Why do you put all of the good items in the cash shop? Why do you milk us of our money, and make the site sucky for those of us that can't give you money? Why is your customer service horrible? Why do you complain about needing money? My estimates are likely too low, so...why? Why do this to your users, without whom you would be nothing? Why do you continue to upset, enrage, and then ignore us?

Why is it necessary to make this site so cash focused?
It looks like greed to me.

If Gaia really wants or needs all of this money, they need to earn it. I would never have stopped donating if I had thought that they deserved the money. But I lost that feeling and so they lost my money. And I know I'm not the only user that feels this way. There are tons of us with the number growing every day. And the more it grows, the less profitable Gaia becomes. And then they won't even be able to cover their bills. Gaia is at a touchy point in its life right now, and as such, they need to be careful. Every thing they do counts, whether negatively or positively.
As a final note on Gaia's financial situation, let me say this: If Gaia really isn't profitable, and I'm way off the mark right now, then they are doing something horribly, horribly wrong. It's bad enough that Gaia costs $1.5 million a month to run, but if they can't achieve that goal, then something needs to change.  

[[ .NK. ]]

Reserved.  

[QuestionableMeatProducts]

I'd be more willing to believe they were in the red if they didn't keep bragging on their "careers" page that they have video games, catered lunches, and nerf fights all over the damn place.

granted, they stopped with the baseball team, but still. -_-

EDIT: Also, first non-NK Guild post. W00t.  

[[ .NK. ]]

Yamato1

I'd be more willing to believe they were in the red if they didn't keep bragging on their "careers" page that they have video games, catered lunches, and nerf fights all over the damn place.

granted, they stopped with the baseball team, but still. -_-

EDIT: Also, first non-NK Guild post. W00t.

Agreed. I'm all for fun work environments, but not if that fun environment is bringing the company down. They've made a lot of poor choices with their money, especially considering the fact that they're 'doing poorly'.

For example, going to the London convention. According to Alexa's page on Gaia, only 1.7% of their users are from the United Kingdom. And when you factor in that they still can't buy cash cards and can only buy things if they have Paypal, it seems like a bad idea to have gone there. I mean, imagine how much that would have cost. Doing it eventually might not be a bad idea, but doing it now? Bad move.

They may have stopped the Softball teams because they went out of season. I'm not sure - I didn't keep up with that. One was kind of silly, but two made me facepalm hard.

Don't forget the in-house masseuse!

And yes, I have a ton of posts in here. xD  

[PentagonBuddy]

Alright, I've been lurking just about everything in the SF for the past two months. I started doing some research of my own, and thought I'm contribute what might possibly be useful:

http://www.virtualworldsnews.com/2008/03/liveblogging--2.html

“For a one-month sponsorship, the company typically draws $100,000 to $200,000, but he says the company is beginning to see deals in the higher six figures.”

This is from March 11 of '08, so I admit it's probably outdated by changing earnings and expenses, but it offers some kind of insight on the potential money made from sponsors.  

[Andromeda Phoenix]

I've not much evidence for why I don't believe they're in the red, but it makes sense in my mind. In the red, for two years just about, seriously? Who the heck is Gaia trying to fool? No company allows themselves to be in the red for two years and let their customer service and quality drop.

Edit: If they're really in the red, they'd look so much better if they didn't look like they were so focused on money. That + the above = you look like you're not in the red. And since you can't really play Gaia if you're blind...appearances are everything here.  

[[ .NK. ]]

PentagonBuddy

Alright, I've been lurking just about everything in the SF for the past two months. I started doing some research of my own, and thought I'm contribute what might possibly be useful:

http://www.virtualworldsnews.com/2008/03/liveblogging--2.html

“For a one-month sponsorship, the company typically draws $100,000 to $200,000, but he says the company is beginning to see deals in the higher six figures.”

This is from March 11 of '08, so I admit it's probably outdated by changing earnings and expenses, but it offers some kind of insight on the potential money made from sponsors.

Holy s**t! That is insanely helpful, thank you so much! I'm going to edit this in right now before bed.  

[[ .NK. ]]

Andromeda Phoenix

I've not much evidence for why I don't believe they're in the red, but it makes sense in my mind. In the red, for two years just about, seriously? Who the heck is Gaia trying to fool? No company allows themselves to be in the red for two years and let their customer service and quality drop.

Edit: If they're really in the red, they'd look so much better if they didn't look like they were so focused on money. That + the above = you look like you're not in the red. And since you can't really play Gaia if you're blind...appearances are everything here.

Agreed on all fronts. I will never, ever again believe that they are in the red. There's no doubt in my mind that Gaia is actually quite profitable. And at the expense of their users, too.  

[O.T.L.]

Andromeda Phoenix

I've not much evidence for why I don't believe they're in the red, but it makes sense in my mind. In the red, for two years just about, seriously? Who the heck is Gaia trying to fool? No company allows themselves to be in the red for two years and let their customer service and quality drop.

Seriously. If they were in the red for that long (especially relative to how short a time the site's been around), how are they still operating? How are they paying for their offices and utilities? (Let alone their non-essential crap like lunches and massages.) Someone has to be paying those bills, and I don't see anyone giving Gaia loans or credit (especially nowadays, when loans and credit are much harder to come by) when they can't show that they can make a profit. So how have they not shut down yet? (The answer, obviously, is that they're not in the red...)  

[Andromeda Phoenix]

It seems like they're using the "we're in the red" card to make more profit than they're making. I do remember when the cash shop first came out, one of the Devs did say something along the lines of, "well, i think we staff members deserve a bit more pocket money," or something like that. Now, wanting to make profit isn't bad. Attempting to make profit by trying to convince your users that you're in the red? That's bad. That's "how the heck do you sleep at night" bad.  

[O.T.L.]

Oh, and while I think of it, an answer to the inevitable counterargument:

Just because a company has layoffs, does NOT mean they're not making a profit. Often, it just means they're not making as MUCH of a profit as they'd like. (If you ever listen to financial news, you'll often hear a company's earnings "fell short of expectations". That doesn't mean (necessarily) that they took a loss; it just means they were projected to make a certain level of profit, and they failed to meet that goal. Layoffs under those circumstances are not uncommon, even if the company is overall still profitable.) (Also, layoffs could just mean that a division of the company did poorly, not the company as a whole. Gaia doesn't really seem to have separate divisions in that manner, though, at least from what I can see of their structure...)

(Sorry, I've seen a few too many of the "Gaia must be in the red, they had to lay off employees" posts, so I figured I'd answer them early... wink )  

[moonsmark]

O.T.L.

Oh, and while I think of it, an answer to the inevitable counterargument:

Just because a company has layoffs, does NOT mean they're not making a profit. Often, it just means they're not making as MUCH of a profit as they'd like. (If you ever listen to financial news, you'll often hear a company's earnings "fell short of expectations". That doesn't mean (necessarily) that they took a loss; it just means they were projected to make a certain level of profit, and they failed to meet that goal. Layoffs under those circumstances are not uncommon, even if the company is overall still profitable.) (Also, layoffs could just mean that a division of the company did poorly, not the company as a whole. Gaia doesn't really seem to have separate divisions in that manner, though, at least from what I can see of their structure...)

(Sorry, I've seen a few too many of the "Gaia must be in the red, they had to lay off employees" posts, so I figured I'd answer them early... wink )

i agree. i believe some of the gaia CEO's must be pocketing the 700,000. i think we should do some research on the head devs and CEOs. i suppose if they have itailan cars then we know where the money is. ninja  

[[ .NK. ]]

moonsmark

O.T.L.

Oh, and while I think of it, an answer to the inevitable counterargument:

Just because a company has layoffs, does NOT mean they're not making a profit. Often, it just means they're not making as MUCH of a profit as they'd like. (If you ever listen to financial news, you'll often hear a company's earnings "fell short of expectations". That doesn't mean (necessarily) that they took a loss; it just means they were projected to make a certain level of profit, and they failed to meet that goal. Layoffs under those circumstances are not uncommon, even if the company is overall still profitable.) (Also, layoffs could just mean that a division of the company did poorly, not the company as a whole. Gaia doesn't really seem to have separate divisions in that manner, though, at least from what I can see of their structure...)

(Sorry, I've seen a few too many of the "Gaia must be in the red, they had to lay off employees" posts, so I figured I'd answer them early... wink )

i agree. i believe some of the gaia CEO's must be pocketing the 700,000. i think we should do some research on the head devs and CEOs. i suppose if they have itailan cars then we know where the money is. ninja

Gaia only has one CEO, and that's Mr. Craig Sherman aka Fin. He was hired in 2006, before the cash shop was introduced.

I don't necessarily believe he's pocketing a lot of the excess, but I do think he's responsible for the cash shop (or at least the extremities Gaia is taking to get money), and I do think he was hired just to help Gaia be more profitable, based on what I've read about him in various articles.

The fact that Gaia so often plays the 'In the red' card makes me sick. Right around the time that they laid off several employees, Fin had projected a record month of profits (in December). And then they were laid off.

The number of users I saw say "Oh my gods...well you guys clearly need help, so I'm going to run out and buy some cash!" made me sick. Granted, Gaia didn't make them buy the cash, but damned if they don't encourage it.  

[the thief-G]

hi was just browsing and i tried a site to check the net worth its very intriguing thought you may be interested

Net Worth : $2.72 Million Last updated 8 Days ago
Daily Pageview : 1240135
Daily Ads Revenue : $3722.85

http://www.websiteoutlook.com/www.gaiaonline.com

so in a month there making 60,000 from random ads alone
eek
i don't think they are in the red do you?  

[jaggedbubbles]

According to Sherman, Gaia costs $25million a year to maintain, and they only make $1million a month.

Now, I can't seem to verify any of that, since they don't seem to be a publicly traded corporation (therefore no public financial statements). While this may have been true at one point in Gaia's online career, I sincerely doubt it's the case now. Until they go public (and have records of their tax filing at the SEC), I don't believe a word of it.