“Can I ask u what yr body’s like” = Pool’s closed

There may be a long list of things online community managers fear. But probably nothing tops the prospect that children are being systematically preyed upon by pedophiles under their watch and… the media found out about it before the moderators did. If it’s an online community that specifically targets children, you have the makings of a royal internet disaster.

Habbo Hotel, a graphics-based, isometric-style chat system, has been around for quite a while – your correspondent remembers seeing it for the first time in 2001/2002, when it required a massive download of the Macromedia Shockwave plugin to run. While it wasn’t initially targeted at children, its growing young user population was soon seen as an opportunity by Sulake (the Finland-based parent company) and thus the Habbo Hotel directed its efforts towards a very young demographic. Those are very risky waters to sail, but Sulake thought it had it covered, with a big investment in active site moderation to make the product a safe, healthy online environment for children.

Fast forward to today. UK’s Channel 4 publishes a shocking report of widespread inappropriate contacts between users. While at first look it looked like the old “the internets is an evil place” moral panic story, there’s a substantial amount of evidence showing  that, in the best case, Sulake’s moderators are asleep at the wheel. In the worst case, Sulake is making money out of a “children’s brothel”, to use a soundbite from the Channel 4 story. Not willing to hang around to find out which is which, the VC firm Balderton dumped its investment in Sulake, a substantial 13.5% stake in the company. One would be hard pressed to think of a harshest wake up call than this.

Sulake acted quickly by taking the radical step of muting the whole site, a decision Paul LaFontaine, Sulake’s CEO, announced via Twitter. This was soon followed by a long post on the company’s blog, describing the situation, detailing the response and covering a little ass.

So what have we learned today, boys and girls? While the story is still developing and this will probably get worse for Sulake before it gets better (if it ever does), it is pretty clear that no level of precaution is unwarranted when a company is making money off the explosive mix of children and the internet. And if you can’t stomach the occasional PR disaster, complete with your name and the word “pedophilia” written on the same sentence, perhaps you should take W.C. Fields advice and “never work with animals or children.”