Game On: hi5 Brings In WildTangent Founder Alex St. John As President, CTO

Another big management change for social network hi5: The company has hired Alex St. John, founder and former CEO of casual gamer WildTangent, as its new president and CTO.

St. John (pictured) joins as hi5 continues to try to transform into a “social entertainment” company that generates profits by getting its users to spend money on games and virtual goods — instead of being just another money-losing social network. CEO Bill Gossman admitted as much in an interview with VentureBeat.

St. John stepped down from the top spot at WildTangent about a year ago; VentureBeat says he gave up his board seat (he’d continued to serve as chairman) four months ago. He founded the company in 1998.

WildTangent raised over $100 million in funding from backers like WPP, Greylock and Hercules Technology Growth Capital; distribution deals with companies like HP got its Orb platform installed on millions of PCs, helping it grow into one of the most prominent casual games companies — partly because it controlled its own game development, publishing and distribution. WildTangent was also successful at gaining widespread adoption of Wild Coins, its virtual currency.

Before WildTangent, St. John was one of the first game evangelists at Microsoft (NSDQ: MSFT), so bringing him in is a sign that hi5 has real faith in its potential to make money from online gaming. The company cut a deal with RealNetworks (NSDQ: RNWK) to sell downloadable games — including “core” titles like GTA: San Andreas, not just casual games — in July, and started focusing on virtual goods in April.

We’ve seen indie companies like Zynga and Playfish build strong businesses by tapping into the power of social networks; hi5 has 60 million of its own registered users, so developing games especially for them (complete with in-game ads and virtual goods) makes smart business sense. Too bad MySpace didn’t get him first … the company could definitely use a firestarter like St. John to fuel its own foray into online gaming.