Social NOTworking

31 Comments

We have Google Envy… we have iPod envy… and we have MySpace envy. Barring Skype sales to eBay, MySpace has been the only really big ticket exit in the tech-land for a while, and its $500 million plus price tag has $-signs dancing in people’s eyes. That explains why not a day passes when we hear about a new social networking company stake its claim to be the next MySpace. (Update: Bill Gurley just emailed and reminded me that Ebay paid $634 million for Shopping.com, and EA paid $680 million for Jamdat, both larger than MySpace and both Benchmark companies.)

On Friday, John Cook wrote about Hyperboy, a Seattle-based start-up that is trying to do everything MySpace does and adding a liberal dose of mobile access to Hyperboy network. Brent Brookler, a three time entrepreneur having started MountainZone and Mobliss, when asked by Cook about MySpace, “I am not saying we are dissimilar. … But if we are going to compare to anyone else, we would say it is more Flickr-like — with all content types, not just photos.” Okay, just like a new hand lotion with different fragrance than Nivea! Gotcha!

Brookler, at least has some consumer Internet experience, but the news which convinced me that we were in Social Networking bubble popped on my feed reader last night, just before I went to sleep. Jeanette Symons, a life long telecom veteran who was co-founder and CTO of telecom-roll-up play, Zhone Technologies and CTO of Ascend Communications has a new start-up based in Emeryville, California, called Industrious Kid, and the first product of the company is Imbee.com, a safe social networking environment for kids. Industrious Kid has raised $6 million.

Telecom people doing social networks and consumer companies? I think there is a little consumer Internet insanity going on right now. People who have little or no handle on consumer are getting funded, or offering funding. Designing high-end switches and getting kids to switch from MySpace – two entirely different tasks. Anyway this insanity is understandable. WSJ has an article about start-ups getting showered by money, some getting unsolicited emails from VCs offering barrel loads of cash. The trend “absolutely harkens back to the bubble days” of 1999 and 2000, Tom Blaisdell, a general partner with DCM-Doll Capital Management, tells the WSJ. (sub.reqd) I let him have the final word on this.

PS: In case you were wondering when there will be a market top – look for a journalist quitting his job to start a social network!

Update: Tim Donovan of Industrious Kid and Brent Brookler have added their side of the story in the comments section.

31 Comments

jeff

Ken you might want to check your “trend” facts…According to Pew Research / Yankee Group:

25 million kids under the age of 13 access the Internet everyday. And more than 50% create their own content. If you had any kids (which I doubt you do) would you want them publishing on the internet for anyone to see? We need more sites like imbee where kids can “graduate online” / where they can begin to learn about communications or collaboration withoutn being put at risk.

If you want to do pet site that’s your call, but frankly I’m betting that there is a fairly large opportunity in providing “point of entry” sites for kids…

Ken Nickerson

Did you know that over half of the households and forty percent world wide have pets! That’s more households with pets than with kids (excluding goats). If kids can social network ala IMBEE, then theres a far greater market for pets.

So… after reading this story and the comments, I’ve decided to start http://www.MyPetSpace.com, where pets and their owners can come together and share experiences, pictures, videos and love.

I think IMBEE is on a trend here, and we’ll follow-up with a number of spin-offs like, MyHouseSpace, MyGardenSpace, MyAuraSpace…etc., as there’s virtually no limit to the potential of the social networking phenomena.

In order to differentiate ourselves, we’ll build all in Web 3.0, not that Web 2.0 hack job style, but pure Web 3.0 with some of the early Web 4.0 compliant specs.

This is going to be great.

Dave Yanofsky

Very interesting conversation going on here. As part of a new youth focused start up (Uth TV – uthtv.com), I also am amazed at how many players are entering into the social networking game, trying to become the next MySpace. Our aim is a little more modest – tap into the growing segment of youth who don’t necessarily want to go online to flirt but are more interested in sharing their original work, whether that’s a video, song, blog, or photo that they’ve created. There’s no doubt young people want to become ‘popular,’ whether in the school halls or on MySpace. Our bet is that there’s a good portion of them who want something more.

Markus

Pierre only the paranoid survive. I have enough money to never work again, and i have the only known algorithms to make this even profitable.

Unlike social networking, users life expectancy on a site like mine is 3 months, it will not be easy for someone to come in spending $4/member and take it over. Webdate spent 500k a month trying to be a free site before it crashed and burned, and true.com has spent over 70 million the last 2 years and gone nowhere.

I agree the media is finally starting to clue in, and there is going to be a big battle coming. I am just happy i have 5 times as much traffic as all the other free sites combined.

wag

anybody who believes that plentyo’fish site has hat 100M buyout offers might be interested in investing in my new startup, i’m creating a social networking site for pet food.

Pierre Bradshaw

What’s puzzling to me is that with all this buzz goign on around social networking, why has http://www.blackplanet.com been totally overlooked? They’ve had millions of members doing the same thing as Myspace since the 90’s. Only, they have effectively mastered the art of the upsell into paid dating subscriptions.

Oh, and one other thing, Markus, sell now. Don’t say I didn’t warn you. Within the next 12 months the market is going to be flooded with free dating sites that will each take a chunk out of a niche. Those chunks, while good for the sites, are not good for dreams of monopolies or huge marketshare.

Buzz is your friend, use it while you have it. In about one month it’s gonna be at a fever pitch for http://www.plentyoffish.com but that buzz is also going to give dozens of upstarts publicity as the media wakes up to the free dating market. This in turn will have the companies offering you big stacks ‘o cash now thinking about cheaper options. Those options are plentiful. “Spend 100 million over here on this buzzing site or spend 3 million over here plus 20 million in advertising for this scrappy upstart. Hmm…” It’s a no brainer. Sell now.

SD

I agree kids internet services are not a new concept but which ones have any traction amongst kids? The idea of a pbskids or a nick is great but I don’t see them providing what kids want.

In the 90’s it was as unlikely your 8-10 year old would have a cell phone as it was your teenager would be getting stalked on the internet. Times are changing and we have to face realities. Parents are scared stiff about what is happening on myspace. Maybe these first “kids” sites will fail maybe they won’t but as a concerned parent I feel I have to look for alternatives. Safe alternatives.

tim

Just because you’re a parent does not make you qualified to start a kids-focused company. It’s admirable, but not really that relevant compared to the experience of an educator or children’s media producer. Plus, you’re already shaking out VP titles? (V P = Doomed.)

You can’t just create a site for kids. If you’re at all serious, you have to segment by age group, which means at least 2 different sites, with age-appropriate functions and content. You also have to watch it like a hawk with real human moderators. This adds expense.

Second, kids already have a social network, it’s called school. If their friends aren’t involved; if the content everyone at school is talking about isn’t there — the kids won’t want to be there either. This is a big growth hurdle.

And revenue? Advertising to kids is a super-sticky business. There’s tons of government/private orgs waiting to pounce on your first misstep. Plus, your audience is going to be too small to really attract the big advertisers for a long time. So, you end up going the subscription route, which kills your growth rate (and any future hopes of attracting advertising).

My point is really that kids’ internet services are not a new concept (my comments come from my own experience with a children’s internet startup in the 90s). Lots of people have tried and failed. It’s way way harder than it looks.

SD

Have you looked at myspace? Parents should be very worried about what their children are either posting or are being exposed to. There are no controls as to what is or is not allowed. Sure they say there’s an age limit but reality is there’s not. For the younger child I think it’s important to provide a safe place for them to enjoy the internet experience. As you wouldn’t let them loose in Time Square to play when they are kids, you shouldn’t let them loose on myspace.

Concerned Mom

Well as the mother of three-8,14, and 17–I can tell you I think there is a REAL need for a site for kids. Yes, 5 is too young but trust me, by the time your child is 8, you’ll be looking for a place for them to go. And it is vital that our kids learn how to navigate and leverage the internet for their futures. The internet will be a huge part of every childs life as they grow and its better for them to figure out some of the do’s and don’ts in a safer envronment. I look forward to seeing what comes out of all these new comers. I want my kids to be able to express themselves and create content, but I want to be sure they can do it without negative ramifications–predators aside, who wants their kids ideas from pre-teen years following them through their lives.

Tim Donovan

While you think social networking for kids is “goofy”..the fact remains that kids want to copy their teenage and / or adult counter parts…and that social networking will most likely be a part of their everyday expirence when they get older.

Also, since MySpace has an “14 ” age requirement for it’s member population not to mention the fact that there is an enormous amount of adult oriented content being shared – where would you suggest kids go?

Our feeling is that we don’t foresee social networking disappearing any time soon – and we do see the age bell curve shifting back rapidly – that leaves us with the conclusion that there is a real market need.

This is confirmed by almost every parent with kids from 8-14 who are looking for destinations – blogging or otherwise – that are more “age appropriate” …we think we’ll be around longer than two years….

Markus

Why sell something for 10 to 20 times profit when you are growing faster then 10% a month? Besides once branded ads come out via adsense, ads rates will double to triple for major sites. Also my site isn’t anywhere near its monitization potential, i barely have any ads. Also the rumor that facebook is valuing its self at 2 billion and looking for funding gives me hope :)

Farhan Memon

Social networking for kids? I think this is the goofyest(sp?) idea.

I have a 5 year old and all he wants to do on the web, indeed all we let him do on the web, is go to pbskids.org.

I have a hard time thinking about how old a child would have to be to find some interest in social networking. 8 or 9 years old, most likely 10. So given that MySpace is probably capturing kids when they are 12, the useful life of Industrious Kid is mayber 2 years?

Doesn’t seem to me that one can build a business on that type of runway.

Jesse Kopelman

“I’ve had several $100 million buyout offers in the last few weeks.”

So, why are you turning them down Markus? The answer to that holds more interest to me than the original article . . .

PeteCashmore

I’m in total agreement with you Om. Personally, I think building the “flickr of everything” is just as misguided as building “the next MySpace”, but we’ll see. You really don’t need much (if any) funding to push one of these out the door, and frankly the business models are extremely weak.

Brent Brookler

Om,

Appreciate for the mention.

What you may have noticed from the article with John Cook was that ‘his’ first question dealt with competition with MySpace. We are NOT trying to be MySpace, but, right now, when any company mentions anything that has to do with social networking, comparisons to MySpace pop up.

We are focused on building a community and platform for viewing, managing and sharing all multimedia content types; video, photos, audio and text. We are building a converged experience where users can view, upload and be part of the community from their mobile phones.

The one part of the article that John Cook didn’t elaborate was the ‘socially focused mission’ that we are integrating into our for-profit business. There is a new emerging trend called Social Entreprenuership and we feel that the focus on the triple bottom line or ‘people, planet, and profits’ will be another differentiator for us. Come back and visit us in our Beta and beyond to learn how we are going to make a difference.

While I agree there are a lot of social networks coming online, I still believe that there will be a lot of winners. There will only be one MySpace and only one HyperMob and everyone can choose which communities to be a part of.

Brent Brookler
Founder/President
HyperMob

Lou Dobbs redux

Om Malik wrote:

PS: In case you were wondering when there will be a market top –
look for a journalist quitting his job to start a social network!

Surely, we will see Lou Dobbs quit his job at CNNfn again, to start MyKidsSpace.com (a take on Space.com) at the market top before he returns to CNN with is tail between his legs asking that he have his job back so long as its not “outsourced”!

A

So Mr. Brookler says they are like Flickr, and you say they are like MySpace… Does that mean you think Flickr is like MySpace? People don’t go to MySpace if they have a lot of photos to share. If Hyperboy is anything like Flickr, I don’t think they’ll need to worry about people wanting to share lots of photos/videos/music going to MySpace to do that, either.

Jay Small

“PS: In case you were wondering when there will be a market top – look for a journalist quitting his job to start a social network!”

Waitaminnit! We can quibble over the semantics of “citizen journalism” vs. “social network” … but isn’t that what Gillmor did? ;-)

Tim Donovan

Hi Om,

Thanks for including us in your blog.

So I have a few comments.

What we’re really talking about with Jeanette and the rest of our team, is the ability to parlay real skill sets over from one industry to another, in order to fill a very real market need – social networking destinations which are purpose built for a child’s user experience.

To my knowledge, MySpace or any of the other known open social networking spaces only cater to teenagers on up. Not kids.

Destinations like our first product, imbee.com, will allow kids to develop their online skill sets “organically” while hopefully minimizing some of the risks associated with the publishing of their personal content. Content that currently finds its way to the entire Internet population – a portion of which as less than best intentions for kids as confirmed in many of the negative press articles related to children and social networking.

Who better than someone like Jeanette, who besides being an extremely successful technologist is also a mother and that understands what’s missing in many of the social networking spaces where kids end up.

It really comes down to this….. Jeanette is recognizing the opportunity to fill a market need and has the technical knowledge and resources to deliver a superior product for kids.

Tim Donovan
Founder, Vice President of Marketing

Ab

Speaking of social networking, google and nike have come out with a new site for the football community, joga.com. Anybody got a chance to check it out?

Gopi

essentially running a hook-up site

MySpace is also the same, dont you think Om :)

Markus

What makes me different is that no other site this size has under 400 employees. (match.com lavalife and yahoo personals)

What i’ve done is automate the job of hundreds of people, and dropped the technology costs from 1 million/month to ~15k/month. Once all these other social networks/dating sites figure out what i’ve done these sites are going to go from barely profitable to making 10’s of millions a year in profit.

Om Malik

that doesn’t surprise me, even though you are essentially running a hook-up site. still, that makes me wanna pause…

Markus

The market has been going crazy lately. I’ve had several $100 million buyout offers in the last few weeks. not only is my company a single employee company but at 400 million pageviews/month and millions in revenue it is completely unique in todays world. That and its the first major site to be run by an AI

Ted

… you can be the first “OmSpace: A Place for Friends (of Om)”

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