RockYou, the big purveyor of social net apps and widgets, has raised a tiny $1 million round from Doll Capital Management to tide itself over while figuring out its next move, according to VentureBeat. The company chose not to comment on the report. Why the small round? Evidently RockYou is at something of a crossroads, as it weighs whether to raise a monster round a la Slide, or perhaps sell out at a lower valuation. Matt Marshall at VentureBeat has been all over the company lately, laying out its challenge in a post last week. The short of it: the company is fiercely competitive with Slide, and it may need to match its rival’s war-chest to stay competitive; but by taking a big amount, execution risk is heightened significantly.
Meanwhile, FT offers up a variation on the ever-popular ‘social nets aren’t making much money’ article. This time it’s widget makers on social nets aren’t making much money. Slide CEO Max Levchin told FT that only two or three companies have revenue “in the high single to low double-digit millions [of dollars]”. The head of Widgetbox, a portal of widgets, puts total industry revenue at $40 million. Of course the big hope is that someone figures out the right model (it took Google (NSDQ: GOOG) a while to figure out its business model — heard that one before?) but in the meantime, it’s easy to see the risks these companies face with so much cash on the line.