FanDuel (by HubDub) is launched exclusively thru TechCrunch UK, which is, of course, upbeat on its future. Heres a more critical take.

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HubDub is a huge success in term of Internet popularity (pageviews, time spent on the site, etc.). However, HubDub has no business model, other than trying to get bought up by some bigger fish. Which is why Nigel Eccles and his smart team have devised a social fantasy sport game, FanDuel. Its business model (allowed under the Unlawful Internet Gambling Enforcement Act of 2006) is simple: you pay to play. –-&gt- $$$

The problem with FanDuel‘-s simple business model (selling social gaming services over the Internet) is that, unlike HubDub (which is free to play), there won’-t be free publicity generated on the Web —-other than the TechCrunch UK post. Just because you have a business model does not mean that you have a marketing strategy.

The best marketing strategy you can have on the Internet is a dual one:

  1. Give away content, software, or means for people to connect with each other-
  2. Sell something else (to the same people or to other people).

Since FanDuel won’-t be free, it won’-t generate any buzz on the Web. [UPDATE: See Nigel Eccles's comment, just below.]

Nigel Eccles is proud of the fact that his team crafted FanDuel in a matter of weeks. But have they thought long enough about marketing strategy?

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Addendum:

The FanDuel press release:

SHAKING UP THE FANTASY SPORTS INDUSTRY

New Fantasy Sports Game Lets You Play Today, Win Today

There are at least 20 million of us playing fantasy sports every year and yet in recent years it has seen very little innovation. For many, one of the major problems with fantasy sports is the huge time-commitment involved –- when you play fantasy, you have to play for the whole season – no breaks, no holidays, no excuses. However, in this era of Facebook and Twitter, people want instant gratification.

This issue is tackled head on by FanDuel.com, a new fantasy sports game which launches today. FanDuel.com lets us play and win in a day instead of waiting the whole season. Players can draft a new team at any time, and pitch it head-to-head against an opponent – a friend, or another FanDuel player – for real money. The player whose team has the most fantasy points at the end of the day’s games wins the cash prize. It’s purely fantasy baseball right now, but the fantasy football game will launch with the start of the football season.

Clever integration with sites like Facebook means that picking opponents is slick, as is bragging about your wins. This is a first for the fantasy sports industry which has been dominated by the big players such as Yahoo, CBS and ESPN for too long.

The game is a competitive draft rather than salary cap – making it much more challenging. However unlike traditional competitive draft both players don’t have to draft at the same time. The way it works is one player drafts their first pick and a back-up for each position. They then order their draft and submit their roster. When they are matched with another user (a friend or another FanDuel user) the system works through each player’s draft in priority order. You get an email telling you and your opponent’s final roster and then you can watch the live stats on both fantasy teams update in real-time as the games progress.

Online social gaming is already well developed but the daily fantasy sports market is quite new. Nigel Eccles, CEO of the company behind FanDuel, admits, “After playing Mafia Wars and other social games on Facebook, going back to playing traditional fantasy sports on CBS felt like going back in time. We felt we could build something faster, more social and exciting.”

Thanks to the fantasy sports carve out of the 2006 Unlawful Internet Gaming Act [Unlawful Internet Gambling Enforcement Act of 2006], FanDuel.com is perfectly legal to play in the US – something that the team behind FanDuel have been very careful to adhere to. FanDuel offers free and paid entry games with users able to enter $5, $10 and $25 competitions.

http://www.fanduel.com/

How the Tampa Bay Rays went from $7.00 to $750.00 on yoonew.com.

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No one epitomizes the success you can have on the yoonew exchange like the Tampa Bay Rays. The Rays, were a ball club who finished in last place last season in the AL East for the 3rd straight year. Playing in the same division with the World Champion Red Sox and former dynasty New York Yankees always provided prognosticators an easy pre-season prediction for the Rays: last place. The outlook was never rosy for the Rays despite their young talent because of the financial disparity between them and the teams who held court at the top of their division.

Entering this season, Las Vegas sportsbooks had the Rays as a 200-1 futures bet to win the World Series. Seven months later, the Rays are now in the World Series and bettors who even invested $10.00 in them can walk away with a cool $2000.00. Vegas sportsbook’-s will be in for a cold winter if the Rays manage to pull off a World Series victory against the Phillies and possibly become the greatest baseball story of all-time. There’-s already been talk out of Vegas that they’-ll never open a team at those odds again.

But, on the yoonew exchange it was a totally different story. yoonew.com is the “-Stock Market for Sports Tickets.”- A futures site where fans can get tickets for the big events like the Super Bowl, Stanley Cup, NBA Finals, World Series, UEFA Finals, Final Four, and BCS National Title at prices much lower than face value. On yoonew, you can also buy a “-Team Fantasy Seat”- or “-Matchup Fantasy Seat”- on a team and as they progress in the season, the initial value of your futures stock could increase and you can either sell it for a profit, hold on to them hoping it continues increasing, or hope your team makes it to the big game to receive your free ticket.

The initial IPO for Rays 2008 World Series ticket futures was $7.50 before the season started. When yoonew began making markets for the team in June when they looked like a real threat, there were asks at 18.50. Looking back, It was a steal for anyone on the exchange. Plenty of traders appeared to be saying: “-Why not the Rays?”- They had nowhere to go but “-UP,”- especially with the excessive amounts of young talent they had entering the season and the early season struggles of the Sox and Yanks.

Before we delve deeper into explaining the meteoric rise of the Rays, let’-s take a month by month look at the Rays and how yoonew users who bought this season were happy to hold on to them.

Take a look at the chart below and the month by month breakdown which was originally analyzed on yoonewverse.com:

Month by month Rays breakdown:

March Pre-Season (Market launch):$7.50
April: $7.50 (14-12 record)
May: $15.00 (33-22 record)
June: $217.07 (49-33 record)
July: $161.68 (62-45 record)
August: $342.44 (83-52 record)
September: $394.10 (97-65 record)
Up 3-1 on the Red Sox: $1050.00
Up 3-2 on the Red Sox: $750.00
Tied 3-3 with the Red Sox: $650.00
Clinch ALCS Title: $750.00

There are obviously two sides to every trade and it won’-t always be as profitable as the Rays. For example, take the story that Bigleaguestew.com wrote on yoonew and the Chicago Cubs market and how it completely dropped from nearly $4000.00 to a stunning $2.00.

Plenty of yoonew users invested in the Rays in mid-May when the Rays swept the Los Angeles Angels and then won 3 out of 4 against the same team who beat up on them for years, the Yankees, in a division battle that sent a clear message: “-We are here to stay.”- As the season progressed, the Rays continued to make believers out of their doubters. On the season, the biggest increase the Rays made month to month was from May to June when they increased +134% on the exchange.

As the summer ended and the Fall classic was weeks away, fans and sports futures traders began registering on the site and buying the Rays as an investment they felt was profitable. Rays fans also saw the potential World Series berth waiting in the wings and got in on them as well. Plenty of traders cashed out with their $300 and $400.00 in profit. You even had die-hard Rays fans who cashed out because of the need for extra cash in these down economic times and said they’-d take their chances with the Rays on sale for tickets.

Now, flash forward past the division title, home-field advantage, and ALCS title, the Rays are now in the World Series playing the Phillies for the ultimate prize. Of course, there were other yoonew users from across the country who bought in early and kept their tickets for the World Series at prices in the $50’-s and $100’-s while a ticket on the open market cost above $300.00 at this point in time. A huge savings for them and the yoonew mission was complete – which is to give fans a chance to land tickets under face value to the hard to get games.

By: Claudio E. Cabrera