Tagged: Four Years Profitable, Big Plans for hi5

Social network Tagged seems to have found a model that works — the company says that 2011 was its fourth consecutive profitable year, and that its revenue grew 35 percent to more than $43 million.

At the same time, Tagged became an aggressive buyer of other startups. It announced its first acquisition in April, of instant messaging client Digsby, followed by WeGame, Topicmarks, and hi5. The last deal, involving a social network that was struggling but still significant in its own right, is probably most notable, supposedly increasing Tagged’s registered user base from 100 million to 330 million.

As for what exactly Tagged plans to do with hi5, Tagged’s vice president of sales and marketing Steve Sarner says there are “big plans in the works,” and we can expect some more concrete announcements soon.

Some other stats: Tagged says, thanks again to the hi5 deal, it more than doubled the number of active users, to more than 20 million. The company has tripled its staff, from 48 to 172. And virtual currency revenue, which is its main business model, was up 60 percent.

Tagged also launched its own in-house development studio last year, Sarner says, because it found that the games that did the best achieved the company’s aims were built by Tagged itself. There are still a few games built by third parties on the network, but moving forward the company’s focus will be in-house.

Unlike the better-known social networks, Tagged focuses on what it calls “social discovery,” or, as Sarner describes it, “the meet new people space” (as opposed to connecting you online with your real world friends). Sarner argues that other companies are finally starting to catch on to the potential here.

“It’s interesting to see social discovery space, the meet new people space … we’re  surprised it’s taken so long for people to take notice of it,” Sarner says. “So we’re excited that we’re in the forefront of it. We’re by far the largest now, especially with bringing hi5 on.”