MS' Social Networking Spinoff Launches

Microsoft spin-off Wallop launched its social networking service at the DEMOfall technology conference Tuesday, saying its unique business model is what sets itself apart from competing services like Facebook and MySpace.

Unlike other social networking services, Wallop is invite-only and will never include advertising. Instead, Wallop would make its money through the purchase of self-expression items that can be placed on the user's profile. Such items, online or off, generate $3 trillion in revenue per year.

The aim is to make this process as easy as possible. One-click customization replaces the HTML coding process that is necessary with sites like MySpace. In addition, users control who can see what on their profile, keeping personal information hidden from those they may not know as well.

Wallop also takes on a unique design: the service is entirely built on Flash, which provides a more application-like experience.

While some may scoff at the "exclusive" nature of Wallop, the company sees it as a positive. Not only does this make the site safer, it also gives a VIP-like feel to being a member of the site.

Initially, the site will be open to a limited number of beta testers, who would each be given five invites. Future invites would be based on who uses the site most, the company said. The site is expected to go public in early 2007.

"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," said Karl Jacob, CEO and founder of Wallop.

"It's about the trend of self-expression moving online, creating enormous demand for easy and limitless customization and an enlightened social experience where the user is in control," he continued.

In addition, users will be able to share music, pictures and commentary across the site. Wallop says all the digital rights management functionality would be controlled by the site. This would include the mods to site pages, where the company asks for a 30 percent cut.

Initial funding for the project has come from Norwest Venture Partners to the tune of $10 million USD. An additional $3 million in funding was previously raised from Bay Partners and Consor Capital.