New Facebook application enables Facebook’s 250 million users to easily find new friends with common interests in any city on Earth.

LONDON, September 14, 2009 – WorldFriends, one of the world’s leading international social networking services, today announced that it has launched the WorldFriends Facebook application. The WorldFriends application enables any Facebook user to find new friends with common interests from WorldFriends’ more than 2 million registered members from 200+ different countries including 140,000 language teachers, browse more than 1 million photos uploaded by members, and share travel advice and tips. With the recent launch of its Trips and Cities feature, WorldFriends is one of the easiest ways to find new friends in any city in the world. To try the WorldFriends application in Facebook visit: http://apps.facebook.com/worldpenpals/

“This new WorldFriends application represents ‘pen pals 2.0′ for the Facebook generation. Although I’m old enough to have actually had a pen-and-paper-based pen pal when I was young, I think this WorldFriends application is a hundred times better, faster and more gratifying than what we used to do with stamps and envelopes. In addition, one of the unique characteristics of the WorldFriends community is its cross-culture and cross-border nature and we are delighted to open it to Facebook users so that they can meet new friends from foreign cultures and thus help to increase world harmony,” said Dominic Penaloza, founder and CEO of WorldFriends.

Screenshot of the WorldFriends application in Facebook

About WorldFriends
WorldFriends is the world’s leading multi-lingual travel and language exchange community. WorldFriends offers people a high quality environment in which to enjoy ‘internationally minded’ socializing, and to meet new friends with common interests, especially in the areas of travel, culture and language learning. WorldFriends Networks aims to promote global harmony by easing language barriers and culture barriers, resulting in greater cross-culture communication. Over 2 million people from 237 countries, including more than 140,000 language teachers, have registered as WorldFriends members, and use WorldFriends to meet new friends in cities they travel to, to find language exchange partners, penpals and teachers, and to meet other internationally-minded people. WorldFriends already offers service in five languages: Japanese, English, Simplified Chinese, Traditional Chinese, and Korean.
For more information please visit http://www.worldfriends.tv/.

Press Contacts:
WorldFriends Networks
Sho Shimoda
Tel. +852 8198 2334
press@meta4-group.com

New trip & cities feature makes it easier for travelers to find new friends in any city on Earth, and easier for locals to meet new friends who are visiting.

SHANGHAI, July 29, 2009 – WorldFriends Networks, one of the world’s leading international social networking services, today announced that it has launched Trips & Cities – a new feature that enables users to input and share their journeys, follow friends’ adventures and make new friends with people at past and future travel destinations.

In just 14 days after Trips & Cities was launched, WorldFriends users have already logged over 2,000 different trips, demonstrating how Trips & Cities opens up an exciting new dimension of utility and growth for WorldFriends.

Trips & Cities allows users to input their travel destinations and route onto an interactive map that can then be used to connect with friends, other travelers and locals interested in meeting up or sharing information about a particular site or region. The feature also includes new city pages for every city on the planet, allowing users to connect with local residents and other travelers in the region, solicit advice from previous travelers, and get the latest in local news.

In summary, Trips & Cities is a one-stop online solution for users’ social traveling frustrations. The feature, with its mapping application and city/regional pages, helps users connect with locals and learn about the hippest local spots and hangouts, arrange to meet up with friends and fellow travelers in the area, and when their trip is done, keep track of friends’ travels and immediately begin planning their own next adventure!

“Since WorldFriends’ inception, so many members have written thank you notes to WorldFriends for helping them find great new friends during travels to new places. With this new Trips feature, we make it easier than ever for both sides to meet. We’re very excited to see 2,000 trips in the first two weeks; this encourages us to keep expanding the travel dimension of WorldFriends,” said Dominic Penaloza, founder and CEO of WorldFriends.

About WorldFriends Networks

WorldFriends Networks is the world’s leading multi-lingual travel and language exchange community. WorldFriends Networks offers people a high quality environment in which to enjoy ‘internationally minded’ socializing, and to meet new friends with common interests, especially in the areas of travel, culture and language learning. WorldFriends Networks aims to promote global harmony by easing language barriers and culture barriers, resulting in greater cross-culture communication. Over 2 million people from 237 countries, including more than 130,000 language teachers, have registered as WorldFriends Networks members, and use WorldFriends Networks to meet new friends in cities they travel to, to find language exchange partners, penpals and teachers, and to meet other internationally-minded people. WorldFriends Networks already offers service in five languages: Japanese, English, Simplified Chinese, Traditional Chinese, and Korean.
For more information please visit http://www.worldfriendsnetworks.com/.

To experience Trips & Cities please visit http://www.worldfriends.tv/.

Press Contacts:
WorldFriends Networks
Sho Shimoda
Tel. +852 8198 2334
press@meta4-group.com

By Julie Meyer on Tuesday, 14th July 2009
WORLDFriends is coming to London. WorldFriends is one of the world’s largest cross-culture online communities with 2m members from 230 countries. It offers people a high quality environment in which to enjoy “internationally minded” socialising and meeting new friends with common interests, especially in the areas of travel, culture and language learning.

Ever since Disney acquired Club Penguin, a subscription-based children’s social network for $700m in August 2007, the smart money has known that social networks would move towards paid-for memberships. Well, not entirely. The “freemium” business model has been in vogue since Skype, which Ariadne Capital advised in 2003 and 2004, came on to the scene with “free calls on the web”, and a paid-for upgrade for further services. One can register for free with WorldFriends, but if you want to send or receive messages to and from other members, then you pay.

The internet allows an entrepreneur to enter a market with a free offering as the costs of doing so are low. Most entrepreneurs will maintain a free offering of their basic service forever. But that doesn’t mean that the entire user experience will be free. That’s the whole point of freemium. Free gets you to a place where you can ask to get paid. But if you don’t start with free on the Internet, most companies will never get paid.

For the past several fiscal years, 10 per cent of WorldFriends’ existing revenue has come from Europe (despite no direct marketing or European distribution partnership base). It also provides white label social internet services to an international network of 200 plus integrated distribution partnerships.

Techcrunch, a leading internet blog, recently recognised WorldFriends as a unique blend of Facebook.com (ie old friends) and Match.com (ie new friends) and compared WorldFriends’ business model with that of Linked-In and Xing.com, valuable virally-growing subscription businesses. The WorldFriends’ per user economics are amongst the highest in the world. The average WorldFriends member makes 17 “world friends” and for that they pay $100 and stay subscribed for 6.5 months.

Nick Paine, WorldFriends’ executive chairman is based in London, and co-founded internet dating site Lavalife.com which he sold to NASDAQ-listed Vertrue Corp for $120m in 2004.

A first closing of $0.7m was completed on 5 June 2009 from the Succzs Europe Investment Fund and existing shareholders. Watch for many more niche social networks [not fewer] where you will want to pay for highly targeted contacts in your interest areas.

Julie Meyer is CEO of Ariadne Capital. World Friends is a portfolio company of Ariadne Capital.

By Mark Leftly on Sunday, 12 July 2009
Julie Meyer, star of the online version of Dragons’ Den, is advising WorldFriends, the social network site that is a big hit in Asia, on its push into Europe.

Ariadne Capital, the investment and advisory firm run by Ms Meyer, is raising €1.5m to set up a London office for WorldFriends this autumn.

The UK team will look to secure distribution deals, such as partnerships with media sites. These sites would have a link to WorldFriends, which has 2m registered users in 237 countries. Ms Meyer is also raising a £20m fund called Ariadne Capital Entrepreneurs. The fund, which should be raised by early autumn, will seek to invest £500,000 to £1m in start-ups.

WorldFriends Mixes Facebook With Match.com (And Dares Charging Subscription Fees)
by Serkan Toto on November 1, 2008

WorldFriends, a social network with a focus on connecting internationally-minded people, was established as early as 2003 but has flown under the radar of the American blogosphere since then. The Tokyo- and Shanghai-based site, which now has nearly 2 million users from all over the world, did a soft (re)launch last week, mainly enhancing a number of networking features.

WorldFriends is walking a fine line between being a platform for dating, language exchange and making international friends. At first sight, WorldFriends actually looks much like a heavily internationalized version of your average dating site. The profile page, for example, features a member slide show (showing only female users if that is what you said you are interested in when signing up), a “New photos”-container (again girls only) and an “Your Ideal Match”-list.

But WorldFriends CEO Dominic Penaloza says the focus lies on cross-cultural networking, finding international penpals, getting travel tips and learning foreign languages (yeah, right). The site, which is available in English, Japanese, Korean and Chinese, boasts over 110,000 language teachers among its registered members. About 65% of total message traffic between members is cross-border.

Perhaps WorldFriends’ most interesting aspect is the business model, which isn’t solely based upon selling advertising space. The site charges users via three different kinds of upgrades that essentially enables members to interact with each other in various modes. For example, users have to pay $24.95 per month to be able to initiate contact (emails, instant messages, voice chat or video chat) to all members (initiating contact with friends and friends of friends is free of charge). It costs $244.95 a year to be able to initiate contact with all members and enable all members to initiate contact with you free of charge. By way of comparison, business network LinkedIn charges $199.95 a year for its so-called Business and $500 for its Business Plus premium accounts. Premium members of Germany’s business platform Xing have to pay about $90 annually.

Penaloza says about 4% of WorldFriends members are paying for services, which certainly helped the site to reach profitability 3 years after launch. Currently the company is particularly active in Japan, where 33% of paid members are from. Penaloza says his price system is fair, particularly considering the $25 to $80 people in this country have to pay for a 60-minute English lesson.

Consequently WorldFriends runs an office in Tokyo, which in July, almost unnoticed by Asian media, managed to close a significant partnership deal: Yahoo Japan agreed to become the first partner worldwide to adopt the new WorldFriends API (the site already has secured partnerships with over 200 websites, mostly through white label partnerships). Registered users of Nippon’s biggest web company can log into WorldFriends via their Yahoo Japan IDs and subscribe by using the Yahoo Japan Wallet payment service.

New application programming interface (API) enables website partners to create, design and host their own social Internet services and earn recurring user subscription revenue, with full access to WorldFriends Networks’ global partnership network and user base. The first partner to use the API is Yahoo Japan Corporation.

TOKYO, July 30, 2008 – WorldFriends Networks, one of the world’s leading social Internet services, today announced that it has launched its application programming interface (API). The API enables third party website developers to create their own social Internet services using their own brand, while leveraging WorldFriends Networks’ critical mass of registered users and enjoying a new revenue stream from WorldFriends Networks’ proven recurring user subscription fee revenue.

 
In a separate announcement today, WorldFriends Networks announced the launch of a new partnership and service with Yahoo Japan Corporation, Japan’s dominant Internet company. Users can easily register for and login to WorldFriends by using their already existing Yahoo! Japan IDs. The Yahoo! Japan Wallet payment service is also integrated into the service to ensure safe and convenient access.
 

The WorldFriends Networks API represents an important historic ‘first’ for the social Internet industry. WorldFriends Networks is the first social Internet service to enable third parties to create their own social applications with proven, built-in end-user subscription fee revenues. For example, a partner could use the WorldFriends Networks API to build a service using their own brand and own custom-made GUI, features, and site map. From the first day of launch end-users will have access to the entire member base of WorldFriends Networks, ensuring a quality user experience that end-users have proven they are willing to pay for.

“This new API is a major leap forward for WorldFriends Networks, and perhaps the entire social Internet industry. This provides another powerful way for WorldFriends Networks to grow, providing users with more opportunities to socialize and enjoy themselves online,” said Dominic Penaloza, CEO and founder, WorldFriends Networks.

“With this new API, partner developers can enjoy tremendous flexibility in designing and branding their own applications that is proven to create additional engagement, pageviews and visits to their websites,” said Jim Yao, Technology Director, WorldFriends Networks.

“WorldFriends Networks already benefits from over 300 integrated partnerships within our network, including “white label” partnerships using the partner’s brand as well as “WorldFriends-branded” partnerships. This new API opens up a powerful new paradigm for partnerships, delivering major new benefits to our business partners who are demanding much more control over the 3rd party applications they integrate on their sites,” said Michael Haffner, VP International Business Development, WorldFriends Networks.

About WorldFriends Networks

WorldFriends Networks is the world’s leading multi-lingual language exchange and travel community. WorldFriends Networks offers people a high quality environment in which to enjoy ‘internationally minded’ socializing, and to meet new friends with common interests, especially in the areas of travel, culture and language learning. WorldFriends Networks aims to promote global harmony by easing language barriers and culture barriers, resulting in greater cross-culture communication.

Over 1.5 million people from 237 countries, including more than 70,000 language teachers, have registered as WorldFriends Networks members, and use WorldFriends Networks to meet new friends in cities they travel to, to find language exchange partners, penpals and teachers, and to meet other internationally-minded people. WorldFriends Networks already offers service in five languages: Japanese, English, Simplified Chinese, Traditional Chinese, and Korean.

For more information please visit http://www.worldfriendsnetworks.com/.

Press Contacts:
WorldFriends Networks
Yves Bennaim
Tel. +852 8198 2334
press@meta4-group.com

Partners to increase Japan’s participation in the global village, enabling Japanese Internet users to easily find new language exchange partners, penpals and travel community.

TOKYO, July 30, 2008 – Today, Yahoo! Japan, Japan’s biggest Internet company, and WorldFriends Networks, the world’s leading multi-lingual language exchange and travel community, announce a partnership and launch WorldFriends to Yahoo! Japan users. The service can be accessed directly at http://worldfriends.stepup.yahoo.co.jp.

WorldFriends enables users to improve their language skills in various languages by easily finding language exchange partners and pen pals worldwide. Users can also find new international friends with common interests in travel, hobbies, and culture exchange since WorldFriends Networks already has over 1.5 million registered members living in 237 different countries including Japan, the United States, United Kingdom, Canada, Australia, China, and Korea. Among the 1.5 million registered members are over 70,000 language teachers, so users can enjoy convenient access to a wide variety of teachers from any location, at any time of the day.

Users can register for free, and create a personal webpage describing themselves including their preferences for language exchange, travel, music, hobbies, and other personal interests. Members can visit personal webpages, send messages to each other, do voice or video chat, and browse over 700,000 photos posted by other members. Users can easily register for and login to WorldFriends by using their already existing Yahoo! Japan IDs. The Yahoo! Wallet payment service is also integrated into the service to ensure safe and convenient access.

Japan spends over JPY 800 billion per year on learning English, including one-to-one language lessons. Learning Chinese and Korean languages is increasingly popular in Japan. Yet, consumers may not be so satisfied with their results from language conversation schools, CDROMs, or books. The service offers a brand new way to get results in improving language skills. Users can easily find native speakers of the relevant language at any time of day or night online and use the built-in voice and video chat to do online language exchange.

WorldFriends Networks today also announced the launch of its new Application Programming Interface (API) that enables next-generation integration between WorldFriends Networks and website partners. Yahoo! Japan is using the new API to integrate with WorldFriends Networks.

“Yahoo! Japan and WorldFriends Networks are both dedicated to providing a quality user experience. We believe that today’s launch represents the completion of a new type of bridge between Japan and the rest of the world,” said Dominic Penaloza, CEO of WorldFriends Networks. “WorldFriends Networks is very pleased to be partnering with Yahoo! Japan, the dominant Internet player. This partnership will reach significantly more people in Japan, giving all members more opportunities to connect within the global village.”

About Yahoo Japan Corporation

Since commencing business operations in 1996, Yahoo Japan Corporation and its consolidated subsidiaries and affiliates (the Group) has established an overwhelmingly dominant position in the Japanese Internet market on a triple foundation of brand power, technological prowess, and an ever-expanding user base. Guided by its mission of supplying all the services that users want, anytime and anywhere, the Group currently provides more than 100 types of services in the Japanese Internet market. According to a NetView AMS JP survey conducted in May 2008 by Nielsen Online, the Yahoo! Japan portal site boasts viewing rates of 88.2％ from the home and 92.9％ from the office.

For more information please visit http://www.yahoo.co.jp.

About WorldFriends Networks

WorldFriends Networks is the world’s leading multi-lingual language exchange and travel community. WorldFriends Networks offers people a high quality environment in which to enjoy ‘internationally minded’ socializing, and to meet new friends with common interests, especially in the areas of travel, culture and language learning. WorldFriends Networks aims to promote global harmony by lowering language barriers and culture barriers, resulting in greater cross-culture understanding and communication. Over 1.5 million people from 237 countries, including more than 70,000 language teachers, have registered as WorldFriends members, and use WorldFriends to meet new friends in cities where they travel, to find language exchange partners, penpals and teachers, and to meet other internationally-minded people. WorldFriends already offers user-interfaces in five languages: Japanese, English, Simplified Chinese, Traditional Chinese, and Korean.

For more information please visit http://www.worldfriendsnetworks.com.

Press Contact:
WorldFriends Networks
Yves Bennaim
Tel. +852 8198 2334
press@meta4-group.com

SNS – You can Enjoy International Exchange at Home

Many people want to be friends with other people around the world! Now that dream can come true easily through the Internet. If you are interested in skiing, just click ”ski enthusiasts,” and you will see a list of ski enthusiasts by region, with photos. In order to take advantage of this site, you are required to create an Internet profile, however your privacy will be protected and no registration fee is charged.

Once you become a member of the site, you can enjoy exchanging e-mails and chatting with other members. The site system is being developed and promoted by Meta4 Group K.K. The company was launched in 2000 by Dominic PENALOZA, so it is still a young company. However, it has already attracted approximately 1.5 million members and about 40,000 more people join every month. At this stage, it has grown into an enterprise that has the world’s largest member network.

Their offices are located in Shanghai, Hong Kong and Tokyo, with 42 staff in total. Penaloza is a Canadian who has Chinese grandparents who have immigrated to the Philippines. Due to this, he has grown up with more than one language and culture. He expected that Japan would be the country that has the greatest demand for the English language, and with that in mind, he started creating a mail-magazine for learners of English as a type of advertising media in Hong Kong in 2000.

Later, he launched an international exchange party in Japan that became so popular that all the tickets sold out whenever the party held. Looking at the situation in Japan where every foreigner is surrounded by approximately five Japanese, he observed that many Japanese are very eager to learn English and do not hesitate to pay a lot of money to go to language schools.

After considering the situation further, Penaloza concluded that more and more people would join the network if he created a website, and also that it is more enjoyable to learn a language through communication. So, as a matter of course, the online international exchange site “WorldFriends Networks” was created in 2003. In the world of SNS (Social Network Services) people all over the world can start new friendships.

At present the site uses four languages: Japanese, English, Chinese and Korean. The site will enable you to practice a foreign language and find friends with the same interests from among the members who come from 22 countries. Japanese make up the biggest group of users with 350000 members, followed by Americans and Chinese. Among female Japanese users, those aged between 25 and 26 form the biggest group and which interestingly, place emphasis on language study and travel. Of course, the group also has older members. More than 360000 e-mails are exchanged among members each month.

“Sometimes some users misunderstand the purpose of our site and think it is simply a dating site. However, we are focusing on international exchange as a means of learning foreign language and exchanging information. Recently, due to the influence of Japanese manga animation, the number of foreigners who want to learn Japanese language has been increasing. We are very pleased about this,” says Business Development and Marketing Director HARADA Ken.

In the three years since they started the WorldFriends business, the company went into the black. Three years on, management is planning to increase the number of Japanese users to one million, and to add Arabic to the existing four languages. They hope the site may make it possible to help enemies become friends by adding a language used in the violence-prone Middle East. “People using our site will be able to experience excitement they do not feel in their daily lives. And it would make us happy to be able to contribute to world peace,” Harada says.

Meta4-Group K.K. is entering into tie ups with many companies in order to spread this network. In the Hiragana Times website, their service is installed as “Hiragana Times Friends” and many people are currently using it. SNS is expected to continue to expand on the wave of globalization and IT systems.

Dominic Penaloza, Meta4 Group CEO
Transcending the language barrier with the help of the Internet

Relying on strong conviction and tireless energy, after surviving the original Dotcom crash, the creator of the WorldFriends multi-lingual social networking service made the business profitable within three years.

Dominic Penaloza at his Shanghai office, holding a giant match symbolizing the ‘match making’ bridge between people (of common interests.)

Dominic Penaloza Jr., born in February, 1970 in Toronto, Canada, 37 years old. Graduated from the University of Western Ontario in Canada with an Honors Business Administration degree. After graduation he worked in Hong Kong as an investment banker at Smith Barney Inc. (now part of Citigroup) and private equity investment company PAMA Group. In January, 2000 he founded HungryForWords and assumed the role of CEO. He moved from Hong Kong to Shanghai in 2005.

A unique online service named WorldFriends is attracting people’s attention. From its main office in Shanghai, WorldFriends achieved profitability three years after its launch. It now has 1.5 million registered members from all over the world and mainly from Asia. Japan is the source of 70% of WorldFriends’ earnings. WorldFriends is an Internet social networking service (SNS) operating in four languages: English, Japanese, Chinese and Korean.

Dominic Penaloza is the founder and CEO of WorldFriends. Early in 2000, he started started Meta4 Group, the company that operates WorldFriends, and a few short months after launch the Dotcom bubble burst, leaving him to struggle to keep the company growing within the difficult business environment. Penaloza seems to be Asian but looks somehow exotic and tall at nearly 180cm, wears smart casual clothes and speaks native English. Anyone might guess he is an overseas Chinese, but perhaps few would correctly guess his origins. So, we directly asked him. He started to tell us with a shy smile “well, it’s a bit complicated”. He was born in 1970 in Toronto, Canada. Penaloza’s grandparents are from Fujian, China; they moved to the Philippines before World War II and changed their surname to a Filipino name. His parents emigrated from the Philippines to Canada in the 1960s. This is how a Canadian entrepreneur with a Chinese face and Filipino surname was born. He was born and raised in Canada, where English and French are the official languages, and lived there until he graduated from university. French was a mandatory subject in school, (but although he spoke English with friends,) the language he first spoke with his parents was ‘Hokkien,’ Fujian’s Minnan dialect. When visiting the Philippines over the summer holidays, his relatives spoke to him in Cebuano and Tagalog. Mandarin and Cantonese were added after he started to work in Hong Kong. “My whole life has been a series of cross-cultural situations, feeling at home everywhere, yet nowhere, at the same time. I always tried my best to overcome cultural and language barriers. WorldFriends was born from my own experiences,” says Penaloza.

Becoming Friends with Native Foreigners

Although the Internet is a global communications technology without borders and geographic boundaries, surprisingly few companies have truly exploited this to provide a robust international service to users of different nationalities and languages. For example, the users of Japan’s largest SNS, Mixi, are almost entirely Japanese people. The world’s largest SNS, Myspace, does provide multi-lingual services in languages including English, Spanish, and Japanese, but each site is managed as a ‘national silo’ and there is little inter-mingling of the various sub-communities. In contrast, Penaloza’s vision is that due to the pace of globalization, the global village is becoming reality and the emerging ‘global culture’ is already larger than most people realize. Despite the trend in creating mono-lingual SNSs, Penaloza created an online community where users of different nationalities and languages can enjoy chatting with each other, and find friends. With the quadrilingual WorldFriends service, users can find other users who match with their interests from all over the world. For example, a user could set a requirement such as as men in their 20s who speak English and live in Japan, and get plenty of search results. However, WorldFriends does not provide a translation service. Penaloza developed the service as the best place to experience ‘social learning,’ the ideal way to improve foreign language ability, appealing to anybody who has an interest in learning foreign languages and new cultures. The most effective and fun way to learn a new language is to become friends with native speakers of that language. However, in reality, it’s difficult to find frequent opportunities to socialize with such people. In fact, unless you work in the company where you deal with foreigners on a daily basis, such chances are rare and finding them requires a lot of effort and expense. Some of the readers may have browsed through the classifieds section in exchange program booklets, looking for a penpal, or posted an advertisement with hopes in finding one. As a person who had lived in seven different countries, Penaloza had the insight that the real world demand for cross-culture friendship and language exchange far exceeded the supply, and believed that a big business could be built by bridging the demand-supply imbalance using the Internet.

WorldFriends was launched in July 2003 and its member base of internationally-minded people steadily grew. Penaloza devised a flexible distribution platform by partnering with websites for Japanese and other Asians who study English and websites that introduce Japan and other Asian countries to Westerners.

“WorldFriends has tremendous growth potential, and 1.5 million members is just the beginning. With the acceleration of globalization, 10 million is very achievable.” says Penaloza.

Since profitability is just as important as growth in the member base, Penaloza initially focused on the Japan market. While English is the most studied language all over the world, in Asia demand for learning English is very high. Asian people are willing to spend significant amounts on English learning to boost their career prospects. The reason he decided to focus on the Japanese market was that Japan is Asia’s largest market for English learning.

“I was inspired by the fact that millions of Japanese people take private English courses and pay tens of thousands of yen every month. I was sure that people would be interested in brand new ways and opportunities to learn English using the Internet, (especially if it would be more fun and effective, yet less expensive, compared to English conversation school or study abroad.)” says Penaloza.

WorldFriends reached profitability in July last year. WorldFriends’ revenue comes from member subscription fees and about 4% of all members purchase premium service subscriptions. Registering, creating profile, and searching the member base are all free of charge. But in order to initiate communication with another member, you need to be a “VIP” service subscriber. There is another kind of paid membership, “Open Club”. With Open Club, users cannot initiate contact with others, but anyone can contact Open Club members free of charge, including regular members. There are many people in Japan and China who want to study English, but feel embarrassed to send poorly written messages to native English speakers. Open Club is designed for such people who want others to initiate the contact. “I am also Asian, I have experienced the embarrassment and challenges of learning languages and cultures myself, and so I understand users’ feelings.” says Penaloza.

Winning the hearts and minds of Japanese people who study English.

Subscription fees are different based on the market, currency and length of subscription. A 3-month VIP subscription is 7000 yen and a 3-month Open Club subscription is 7500 yen. It is not cheap compared to general online services; however, 70% of revenue comes from Japan.

Penaloza found an untouched market in the Internet space which was blocked by the language barrier. Even after identifying a need demanded by consumers, it is not easy to make it a successful business, especially a complex need such as international friendship, culture exchange and language exchange. Partnering with many distribution partner websites from various countries whose business practices, and languages are different, and providing a service that is attractive to a very diverse group of users is a large operational challenge. Penaloza won hearts and minds of Japanese who study English and got his business on track.

WorldFriends operates from three offices in Shanghai, Tokyo and Hong Kong and one of its competitive strengths is its “international DNA” provided by the melting pot of its internationally-minded staff from China, Japan, Canada, Switzerland, and several other countries. The business got on track due to Penaloza’s personality and capability.

“Dom has excellent skills in picking what is necessary and unnecessary from the many ideas from our employees and decide which direction the company should go,” praised Ken Harada who joined WorldFriends as business development director after starting up various Internet companies in Japan such as DoubleClick Japan.

“Dom has excellent skills in accurately understanding the important points, even if the subject of discussion is outside of his field. He is a responsive boss, thus employees feel inspired to work hard,” said Jim Yao, WorldFriends’ IT director in Shanghai who has extensive experience in technology management and development in both USA and China at IBM.

Penaloza’s grandfather was an entrepreneur who started his business trading spare parts with US forces in Philippines after the war. Later, he started a successful business importing ball bearings and roller bearings from Japan into the Philippines. Penaloza’s father is a serial entrepreneur who was a pioneer in opening up a series of shops and restaurants in the original Chinatown in Toronto. Penaloza started his first business venture early, when he was five years old. He opened a lemonade stand in front of his home in Toronto (photo, right).

First entrepreneurial venture at age five; a lemonade stand in Toronto

Penaloza was raised in an entrepreneurial family, and he experienced first-hand the ups and downs of entrepreneurial life. Penaloza’s father started businesses in the Philippines, the USA and China. Regardless of success of failure, building companies in foreign countries has been the daily life of the family for at least three generations. “Becoming an international entrepreneur was the natural choice for me. My grandfather was an entrepreneur, and my dad is an entrepreneur, even my grandmother and mother are entrepreneurs,” says Penaloza.

Penaloza majored in business administration and after graduation he headed to China for one year to help establish his father’s company in the market. He then became an investment banker with Smith Barney Inc.’s Hong Kong office in 1994. Later, he joined PAMA Group, a prominent pan-Asia private equity investment company, and worked on investment deals in across Asia including Japan and Greater China. It was an ideal training ground for Penaloza, whose goal was to become an entrepreneur.

Penaloza’s entrepreneurial turning point occurred in autumn 1999 when the whole world was focused on the so-called Internet bubble. Countless investment propositions had been sent to PAMA, but PAMA was very cautious and passed on all of them. However, one day Penaloza came across a business proposal that grabbed his attention. It was about permission email advertising, which he deemed to have profitable potential. PAMA passed on this one as well, but he kept it in his mind for future entrepreneurial plans.

Inspiration came suddenly. As a finance professional struggling to master Mandarin, Penaloza traveled with handmade flashcards with English on one side and Chinese on the other side for him to study new investment terminology. After accomplishing the IPO of a PAMA investee, he took a holiday in Italy, and when he was flipping through the flashcards at his hotel room, the idea suddenly bloomed in his mind; personalize the flashcards and send them daily free of charge inside emails, supported by advertisers who would pay to reach a white-collar, highly educated audience.

7 days test policy

“I can provide free education to help millions of people around the world who are trying to learn languages. It’s not just a substance-less dotcom, but can surely be a profitable business. This is the work I should pursue.” thought Penaloza.

He tendered his resignation at PAMA when he returned to Hong Kong and started to prepare for the business. Fortunately, Penaloza’s bosses and partners at PAMA agreed to invest as individuals. The flashcard service was named “HungryForWords.com” and launched in February 2000. However, the happiness and thrill of launching the business was short-lived, as the Internet bubble was burst a few months after the launch. His hope for further financing was extinguished and he faced near bankruptcy. Penaloza reduced the scope of the business and skated on thin ice towards profitability and financial self-sufficiency. Two years later, HungryForWords.com became profitable, but investors were still not interested in Internet businesses. But Penaloza never gave up and established WorldFriends, making use of his marketing know-how, business networks and a little excess cash from HungryForWords. In order to reduce operating costs and to move closer to a future major market, he moved the main office to Shanghai in 2005.

Mr. Makoto Yasuda, director of Li and Fung Ltd., the leading trading company in Hong Kong, a WorldFriends shareholder who was also Penaloza’s colleague at PAMA describes Penaloza, said “Dom has a tremendous drive to succeed and a huge spirit for challenge which are crucial for an entrepreneur, and also calmness and patience which are crucial for investors. If he was just an average entrepreneur, he might given up a long ago.”

In fact, it’s common for Overseas Chinese businessmen to give up on businesses at the first signs of challenge and look for a new business opportunity. However, Penaloza never gives up until he succeeds. The driving power to make WorldFriends become a profitable business was his daring spirit which survived years of hardship after the bubble burst.

Asked if he had ever thought of giving up, Penaloza replied “I have my own ‘7-day rule’. I consider myself an ‘ideas person’ and I think of new business ideas all the time, perhaps once per week on average. I have many ideas about business opportunities, but after examining the ideas from various angles, I still feel strongly about few of them after seven days. Only HungryForWords and WorldFriends passed the test. I was so sure of the success, so I never thought of giving up at all.”

(Shinji Tahara, Nikkei Beijing branch)

Let there be light

Editor’s note:

Based on the complete implementation of the five criteria for selecting a BOCOG Olympic torchbearer, Lenovo Group along with China Daily has launched the “Lenovo-sponsored Olympic torchbearer nominee selection among foreigners living in China” program to seek out people who embody the Olympic spirit of constant exploration and striving for excellence and who have made contributions to the building of a harmonious society.

Starting on September 7 and concluding at the end of October this year, this campaign will select eight foreign torchbearers, providing foreigners living in China with an opportunity to participate in the Beijing 2008 Olympic.

In order to attract more public attention to the selection campaign and better spread the spirit of the Olympic movement, The Olympian is highlighting some of the candidates’ stories during the selection process.

Dominic Penaloza
Nationality: Canadian
Birthday: 1970/02/12

I am the founder and CEO of WorldFriends.tv, a website with over 1.3 million members from 200 different countries. I was born and raised in Toronto, Canada and I am ethnically Chinese-Filipino. I have lived in Shanghai, Toronto, Hong Kong, Manila, Sydney, Jakarta, Nanning and Xiamen.

If I am given the honor of being an Olympic torchbearer, every step I run will be with the passionate Olympic spirit, representing both foreigners and Chinese in China who are internationally-minded and want to “be global”. Each step will represent striving for a harmonious society, and for international friendship.

I love China. I first arrived in China at the age of 23 in 1993 and lived in Nanning and Xiamen. I did not speak and Chinese when I arrived and I found that learning Mandarin is like snowboarding. It’s very easy to get started, but difficult to master and easy to have an accident. My most embarrassing moment in China was when I was making a public speech at an inauguration ceremony and I said that the company’s warehouse was full of chun huo (idiots), when I was supposed to say cun huo,(inventory). Everybody in the crowd laughed-except me.

My Mandarin rapidly improved and I began making my own flashcards to help me remember my vocabulary. Language exchange became a lot of fun; never in my life had I felt like a rock star until I went to Chinese people so eager to learn English and “be global” especially at the English Corner in Nanning University where every Thursday night we would gather to shyly practice English conversation in the dark. In early 2000, the hunger to learn English that I witnessed in China inspired me to start my own business called HungryForWords.com, enabling Chinese and Japanese speakers to get their own personalized flashcards via email, providing language education free of charge.

Seven years later, I am living in Shanghai and still running the same company, which has launched my new website to promote international friendship. Every day, thousand of members are “meeting their neighbors in the global village”, for example, Japanese exchanging travel notes with Koreans, or Spaniards doing language exchange with Chinese.