The $10M expression session
Do we need another catch-all social network? Well, looks like we're about to find out.
Wallop is the social networking startup that was spun out of Microsoft Research Labs earlier this year. They just landed $10 million in venture capital to compete with MySpace, Friendster and Facebook.
Here are some quotes from TechCrunch and Seattle PI and GMSV:
"After taking a long, hard look at social computing, it became clear that it is not simply about the technology, which has been limited and plagued with problems to date," Karl Jacob, Wallop's chief executive, said. "It’s about the trend of self-expression moving online."
Bill Tancer, Hitwise's general manager of research, is skeptical. "The key here is, there's going to be a tolerance issue for users in terms of how many social networks they have," he told the S.F. Chronicle. "It takes time to build up a profile and track the interchanges and manage those. From a consumer standpoint, there's a limit to how many will be viable."
Unlike the other social networks, Wallop CEO Karl Jacob says he has no plans to ever put advertising on the site. It just lessens the user experience, he says. Instead, Wallop wants a piece of the $3 trillion per year U.S. market for self expression items (clothes, furniture, beauty supplies, etc.). As sites like Cyworld have shown, people are willing to spend money for online expression items, too (Cyworld brings in a reported $300,000 per day in microtransactions to its users).
So Wallop has created a marketplace for “self expression” items on the site. Flash developers can create items and sell them to users. Music clips, animated widgets, artwork, avatars, clothing for avatars, etc. will all be for sale. Wallop handles payments and DRM, and takes 30% of the sale price. The rest goes to the seller.
Investors in the San Francisco company, which is presenting at the DEMOfall conference in San Diego this week, include Norwest Venture Partners, Bay Partners and Consor Capital. Microsoft also retains an equity stake in the company, which is led by former Microsoft Corp. employees Karl Jacob and Sean Kelly.
Technorati Tags: social.networks, wallop
Wednesday, September 27, 2006
Making money off expression items sounds like a challenge when other services would offer similar features for free. Advertising seems like a more realistic monetization strategy to me in this space.
# posted by Ed Kohler : 4:36 AM, September 30, 2006