Cover Story

COVER STORY

Mark Surfas of Critical Mass Drives Massive Hits and Money to His Site on the World Wide Web

Interview With Mark Surfas, President of Critical Mass Communications

by Don Hamilton

We all know that some people play games on the Internet at work. We also know that a lot more play at home at night. But who runs these things and, more importantly, how do they make money? Mark Surfas, president of Critical Mass, has so many hits on his site that he should be black and blue. Instead, he's green with money! WWWiz visited Mark for an insider's view of the business of Internet gaming.

WWWiz: What is it that you guys do?

M.S.: Critical Mass operates a variety of gaming-related Web sites. Planet Quake is our flagship site. We now have a total of about 10 sites. Each one focuses on a particular niche. Planet Quake focuses on the game Planet Quake, which is an immensely popular Internet multi-player game. We have GameGirlz, which focuses on women playing games, HexenWorld, which focuses on the game Hexen, and on and on and on. Whenever a game comes out that looks like it's going to be popular, we do a grass roots effort to bring together people who are focused on the game and want to develop Web content for it. We host it here, we sell the ads. In some cases we share revenues, and in some we don't. It's a very grass roots community effort. It's been immensely successful. Last week Planet Quake was listed by Hot 100 as number-four game site, and number 67 site on the entire Net in terms of traffic. It's basically pumping out a steady five megabits all day and all night.

WWWiz: How do you get paid?

M.S.: Ad sales. If you don't get paid, you are excess. We do our own ad sales here. Planet Quake is extremely well known now. When we started there were a lot of publishers that weren't aware of us and our model. Now they approach us on a regular basis. We just finished a large ad run for Saga Soft. We didn't even have to work on it. They just called up and said they wanted to run half a million over two weeks, and that was all. It was that easy.

WWWiz: Do you count the click-throughs?

M.S.: We don't sell click-throughs. We use a publishing model. A lot of our pages have banners on them. Every time a banner is displayed we get paid.

WWWiz: Some banners just don't draw attention, like any other form of bad advertising. It's sometimes the sign of a desperate company that they will count click-throughs when they don't have control of the draw a banner will have.

M.S.: Yes. The click-through model is dangerous. We don't use it.

WWWiz: What do you charge for a banner?

M.S.: It depends. It depends on how close you want to focus the niches. Going rates range from $25 to $35 per thousand. At that rate, we can make a profit and stay in business. IDG just signed an agreement to sell our ads for us. Our inventory is so large now, we either have to develop a large internal sales force or we have to outsource. Our inventory right now is moving quickly to the 10 million per month rate.

WWWiz: Does that mean that you have 10 million page views?

M.S.: We used to have a lot more than that, but we don't have ads on all our pages. We have 10 million banner views each month.

WWWiz: Are you making money?

M.S.: Yes, we are. We're focused on something new. We have some technologies that are converging right now. We're in a marketplace that no one else is driving, or mining, I should say. That is, multi-player games on the Internet. Three thing are coming together now. One is high-end PCs now are in the affordability group of just about anybody. You can get MP 2, like I have, for about $2000. It's no longer a $5000 outlay for a machine to play games. Games themselves are becoming much more attractive. Games like Quake and Quake II. They're very involving now, much more so than 15 years ago when you had groups like Ultima, which was a text-based game. Back when you said to the computer, "I am looking at the wall," and the computer came back and said, "You see nothing." So now when you play you almost feel like you're in the game yourself. Now you have the availability of cheap bandwidth and the ability to play people across the world.

WWWiz: Do you host the multi-player games?

M.S.: What we do is we take advantage of the fact that a lot of people with T1 and other high-speed connections are willing to host the game. We do host some games here but, getting back to Quake, there are around 1,500 Quake servers across the country available to you on the Internet. For players it's a much bigger win than any commercial gaming service. For example, if you sign up with MPlayer you go out through your ISP to MPlayer back in, say, Fremont, California, or wherever they happen to be, and you connect to their service. You may be making 16 hops to get there. Your lag time or ping-to may be 400 milliseconds (ms) at that point. Who knows? To play a game on a system this slow is an iffy proposition. If your ISP hosts games, you might have a lag time of 100 ms and your game experience will be a lot better. It's a very grass-roots effort and many of the game companies are producing game servers that any Joe can run. The revolution started with Doom and really picked up with Quake, and now it's standard in the industry that when you produce a game and it's multi-player, you produce a server that anybody can run for free. Due to that, communities spring up like wildfire and we have become the largest of these grass-roots groups. Without the ability of Joe Average to run a server, we would be nowhere.

WWWiz: So you run game servers here?

M.S.: At any given time we are running five or six servers here. Our business revolves around two things. One is these gaming sites, and the other is a software called GameSpy ( http://gamespy.com/ ). GameSpy is a revolutionary piece of software that allows you to seek out and find game servers on the Net. You might say that GameSpy is sort of the Yahoo! of game servers. It lets you load up lists of game servers we supply, and it lets you ping those game servers, and it will deliver back to you a list of who's playing, what game are they playing, and what is your ping to that server…is it close, is it far? Last month GameSpy was installed on over 600,000 PCs. I suspect we will hit 750,000 by the end of February, if not sooner. GameSpy is kind of a revolution in online gaming itself.

WWWiz: How and when did you start this?

M.S.: Planet Quake was launched, I believe, in October of '96 after a few months of gestation. It has grown at least 20% per month ever since. Planet Quake was so successful that we decided to form a team and begin to look for other niches, and spin off the same type of communities.

WWWiz: Who owns the business?

M.S.: I do.

WWWiz: What kind of ad revenue do you generate?

M.S.: The potential ad revenue depends. If I have 10 million ads, and I keep half for my own promotional purposes, and I sell five million at the lower end of the spectrum at $20 per 1,000, gross revenues will be $100,000 a month. That's the potential of anybody trying to get into this kind of publishing business. You can't just have 100,000 page views and just sell ads. You have to have a certain volume before you can seriously sell ads, because you're going to be trying to fulfill for a number of people in a number of different ways. Your inventory has got to be quite large. Between software sales and ad banners right now I would say our revenue in December was around $120,000. Games by themselves this year is going to be several hundred percent, no question about it.

WWWiz: How do you demonstrate the number of banner views, or do you do that?

M.S.: The ad server tracks that. I have an ad server. There is a certain amount of infrastructure that it takes to get a content business going. You have to have the content, the pipe and the servers. One of the little-known niches of the business today is ad servers. One of the little-known facts is that the decent ad servers really are not even for sale. They are for rent. If you're looking for a real ad server, you're looking at spending $100,000. Prices are coming down. But it has been extremely difficult to gather data because it has all been very closely held. I would recommend if someone was going to do this that they hook up with someone that has an ad server in place and knows the ins and outs of dealing with insertion orders from people looking to advertise. We already have that expertise set up.

WWWiz: What does your provider, Intelnet, do for you?

M.S.: Provide bandwidth.

WWWiz: So they don't provide any servers or server applications?

M.S.: No. We have here, with Planet Quake, Critical Mass and GameSpy, 12 servers altogether.

WWWiz: What kind of servers do you use?

M.S.: Everything is Intel-based. Ninety percent of it is Windows NT. We have some UNIX.

WWWiz: Where do you see your business going?

M.S.: We see ourselves becoming the major player in online games through content and in terms of providing game play through GameSpy, and something we call the GameSpy server alliance, which is, through our software and our ability to provide game content, we think we can take any ISP and differentiate them from other ISPs by giving them the ability to be a game service. We provide the software and the user interface, and Joe's ISP can start advertising to their users that we've got X game servers up and provide great game play and you should be signed up with us.

This is pretty bold, but we think we're going to kick most of the commercial game services in the ass. We've been in the online gaming conference and we've been talking with them. They have a very different model. Online gaming services have massive infrastructure that was predicated on the situation before the Internet happened, before there was all you could eat for $20. They sunk a tremendous amount of money into the centralized system, and many of them built out these networks that you would dial into, so they have that carrying cost as well.

WWWiz: So they are AOLs and you are the Earthlink?

M.S.: In a manner of speaking, I would say so, but it doesn't cost us anything. Earthlink has to pay for their existing system and we ride on others'. We sell our software which you don't have to buy, but last month we had 5,000 registrations of GameSpy. For a shareware product, that's not bad.

WWWiz: How much is it?

M.S.: Twenty dollars for a lifetime registration. I think the number of registrations will continue or grow over the next few months. GameSpy is going to dominate online gaming. A number of game publishers have already incorporated GameSpy in their materials.

WWWiz: Who wrote GameSpy?

M.S.: GameSpy was written by three programmers scattered around the country, and we are the owner and publisher.

WWWiz: What is it written in?

M.S.: C++

WWWiz: So are you using Java or moving that way?

M.S.: We are doing some Java and we are moving with some of the software support companies that are moving that way. The main focus with Java is going to be to allow us to put these modules inside of games so you don't have to leave your game; you just start the game and you're already in GameSpy, searching for a server. That will be our piece of it.

With the installed base that we have, we are now a force to be reckoned with. In terms of marketing, if a game publisher will support GameSpy we will support them and get the word out that they have a game. It's one of the hardest things that a publisher faces these days. Certainly the small game companies have tremendous problems with that. They sign up with large publishers and get small royalty rates in hopes of getting distribution.

I think that the niche publishing era is here. You don't have the problems of print media with all its costs, and you have an extremely rabid fan base and your costs are low. Seems like a winning proposition.

WWWiz: What background do you have that gave you the skills to start this business?

M.S.: I was in the computer network business about 13 years ago in a business that I co-founded. We sold and installed Novell networks. I have always been keenly interested in telecommunications. With my first computer I became fascinated with modems and communications. I bought two modems for the one computer. I spent my first weekend with my computer trying to make the modems communicate with each other. I don't remember what the point was, but I spent the entire weekend in my room without eating or sleeping; I was just completely fascinated. Eventually I did it and I was just beside myself.

WWWiz: When was the first time you played a game on the network?

M.S.: First one was early Novell. They had a game called Snipes. It was a little ASCII game and basically you and your buddies cruised along in a maze and tried to shoot each other. That must have been in 1987, and it was intended to test the robustness of the network. For some reason, it really stressed out a Novell network; I loved that, so I played it all the time. I went on to a series of odd jobs; being an online manager before being online was cool. I worked for the California Association of Realtors to set up a bulletin board system for them back in the dark ages. We tried to get realtors to use the communication technology. That would have been about 1991. Before that, I was a network manager for Grubb and Ellis, a large real estate company. I was also the online communication director for Coldwell Banker.

When I left Coldwell Banker, I started Critical Mass. The Web was exploding and we did a lot of consulting. We were one of the early Web-based companies. Maximized Online was an early leader as well.

We were hired by a company to build an online casino. When Internet gambling was still very, very new we were hired by a company in Monaco to go there and build a casino online. We did that. They now operate gambling servers in Russia, Monaco and a couple of other places. We finished that in March of '96. Unfortunately the people involved in that were pretty odious. We made a hell of a lot of money but we didn't have much fun.

Somehow I got involved in writing books. I just got this the other day. The book is Internet HTML and it's been translated to Korean. My flagship book was called Running a Perfect Web Site.I became this kind of guru for running Web servers on Windows and Windows NT. Everyone else was on UNIX and I didn't know anything about UNIX, so I needed to be on NT. So I wrote a few books for Macmillan and developed a reputation. I was heavily addicted to any game you could play on your local area network but, of course, the Holy Grail was the Internet. It wasn't until Quake came out that any game on the Internet was fun. It played well across the Internet and you could set up a dedicated server and anybody could hook up to it if you wanted them to. It was freedom to do anything you wanted to. I was in the process of writing a book for O'Reilly, and at the same time my addiction to gaming was so strong I told them I wasn't going to write the book; I was going to start a site called Planet Quake.

We discovered that you didn't need a lot of graphics or Java; all you needed was good content and people would come to the site by the thousands. We were smart enough to build a brand. We could sit around and build Web pages all day long or we could help other people get people to their pages. We focused on Quake, and set up six servers and invited other people writing about Planet Quake to be hosted on our site. At this time, I think we host 200 Quake-related sites. There are a million things you can do with Quake. You can program it, you can add graphics, modify it, make your own levels, all sorts of things. We became sort of a content aggregator.

WWWiz: How many people work on your Web site?

M.S.: We have two to three hundred around the county. Their reward is that they're well know in the community.

WWWiz: How did you fund the company?

M.S.: It was self-funded. We used the money from the consulting income. We were brains by the pound. It was exciting at first, when the Web was still exciting, it was still unknown, and who knew what you were going to do next? "Hey, come look at this page! There's a calculator on it!" It was really great but we quickly grew bored as did most Web publishers, I think, who were entrepreneurial, rather than business-minded.