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Microsoft’s Spin-Off Launching Social Networking Site Wallop; Gets $10 Million Second Round

Microsoft spin-off new social-networking company called Wallop, based on technology created in-house at MSFT, is launching its service today. Wallop, which is invite-only, is going for a better design through its use of Flash animation. It is also free of advertising and will make money by taking a share of sales of “mods” – modifications to users’ sites that help to personalize them – by Flash developers. The add-ons will initially cost somewhere between 99 cents and $4.
That means it is going for what Cyworld has done in Korea and what it is now trying to do in US, combining social networking with the commerce that is prevalent in virtual worlds.
After first-round funding of $3.6m from Bay Partners, it has raised second round worth $10 million, led by Norwest Venture Partners. Previous investors, Bay Partners and Consor Capital, also participated in this round.
Wallop is the first spinoff under an intellectual-property program called Microsoft IP Ventures that begun last May.
The ventures program has been tasked with combing through the company’s vast IP portfolio for technologies that could be commercially viable and then licensing those technologies out to start-ups, or incubating companies in-house. A former MSFT employee, 38-year-old serial entrepreneur Karl Jacob, is the CEO of the new firm. The research behind Wallop’s technologies began in 1999 when Microsoft began its research on social-networking. Those efforts were refined into the Wallop project inside Microsoft in 2002, and the Microsoft’s researchers have been tinkering with the product ever since.
More information about the service here and here in the releases.