Gamers Score a Deal
Ian Mount

(FORTUNE Small Business) - The problem with multiplayer online videogames is that you inevitably get fragged by some obnoxious 14-year-old. Xfire helps fed-up gamers find their friends online and play with them. Mike Cassidy - a 43-year-old serial entrepreneur - and Dennis Fong, 29, created the Menlo Park, Calif., company in 2003. Today Xfire boasts one million active users, each of whom spends an average 91 hours a month using the service.

In April, Viacom - wanting its MTV Networks group to tap into that rabid audience - paid $102 million for Xfire, which made less than $10 million in advertising revenue last year. Jeff Kinderman, of Tucson's Oracle Capital Advisors, says the price is rich but fair: "This is not about profits but about capturing market space." Cassidy and Fong, who will stay with Xfire, agree. The deal "gives us almost unlimited resources," Fong says. Top of page

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