H-A-B-B-O Spells Success for Finnish Company

In 2000 the Helsinki based Sulake Corporation launched Habbo Hotel (think Second Life for young adults). Eight short years later, Habbo has become "the world's largest online community for teens." I'm not sure how many competitors there are in the market for virtual teen communities, but this past June Sulake issued a press release announcing their 100 millionth registered user. Obviously gaining such a large a public of impressionable teens has elevated Sulake to the status of a lucrative gateway for companies such as Disney, Viacom, and World Wrestling Entertainment to reach out to potential customers (or at least the parents of potential customers). Suluke has become rather skilled at pushing advertising partners during special contests and events such at the current High School Musical 2 Dance Competition. For the current contest, teens can enter to win Disney's High School Musical 2 on DVD, and even if they don't win (or enter the contest at all for that matter) they can still get free promotional materials and generate buzz for the upcoming release. In addition Sulake often has celebrities come "visit" the hotel to promote their projects and appeal to the cool factor which Habbo would otherwise lack (and arguably still does even with a special guest visit from Dylan and Cole Sprouse).



The concept of Habbo Hotel is very simple. Simply put, it a web client that gives users access to a series of chat rooms navigated by using customizable avatars. You can explore various "public rooms," many of which have large billboards directly linking to partner sites. In addition, you can purchase credits (which equate to twenty cents each but can only be bought in bulk) to further customize your avatar or furnish your own personal room with pixelated furniture ranging in price from one credit to twenty five credits. The "rooms" are just an artifice for the numerous advertisements and promotions that teens are bombarded with whenever they enter Habbo Hotel and I'm quite sure that most of them are oblivious to the fact that Habbo is structured in such a way that Sulake either makes money from advertising or by selling proprietary credits. There are free mini-games that you can play on the site, but at the end of the day, Habbo seems a lot less about games and more about making money.

Sulake has started to capitalize on its immensely popular marketing tool by incorporating Web 2.0 elements such as tags, server-side interest groups, and even fully-customizable profiles (MySpace for your avatar). The marketing team at Sulake is definitely adapting their image to appeal to the Web 2.0 generation. In February, Sulake inked a deal with the William Morris Agency in order to increase brand awareness in the United States by creating more cross-marketing promotional opportunities. I'm not going get into whether or not it is ethical for Sulake to market their products or partner products so aggressively towards children, however, I found it interesting how advertising and marketing potential have changed Habbo over the years. The main page once featured no advertising at all, but by heading over to the Internet Archive you can see how Habbo's increased popularity has lead to a significant increase in the amount of advertising. This trend of increased advertising is a commonplace when websites become popular, however, I doubt the increased number of ads has much to do with Sulake's server fees.