Microsoft Launches Wallop, the Pretty Social Network

Microsoft has just launched Wallop, previously a semi-forgotten Microsoft Research “sandbox” social network and photo sharing project, it has VC funding already,

Wallop, the social networking startup that was spun out of Microsoft Research Labs earlier this year, has landed $10 million in venture capital that it will use to create a new competitor to MySpace, Friendster and Facebook.

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.

They say it completely integrates everything into one platform, photo sharing, music sharing, blogging and everything else we have become accustomed to. Wallop will not have advertising on the WebPages, they are planning on selling “mods”, which are games, animated backgrounds, slide shows and videos that they can integrate into their webpage. They will be selling these from 99 cents to $4 dollars.

From Michael Arrington of Techcrunch

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.

Marketplace functionality is still being built, but Wallop says they will have the ability for sellers to create auction sales for one of a kind items, limited edition sales, etc. in the near future.

Invited users will be given five invitations each that can be used to invite others into Wallop. More invitations will be given to users based on how active they are in the service. Look for the service to leave beta and open to the general public in early 2007.

Looks interesting and I think this business model could work, if they can attract the users, most of which will probably pay for the mods to improve their WebPages instead of trying to do it themselves. How do they get them there in the overcrowded social network scene is the main question.

Liz Gannes from GigaOM says,

CEO Karl Jacob contends “the problem with social networking today is not that you don’t have enough friends, it’s that you have too many friends.” On Wallop, you can precisely group your friends and decide what they see. You can also format a public page for non-members to see.

This attention to privacy and relationships makes Wallop a lot like Facebook. Additionally, Wallop aggregates recent activity on the site into a stream, much like Facebook’s controversial News Feeds.

Wallop is also much more open to modification from outsiders than Facebook. Feeds from sites like Flickr or TypePad are fair game for profiles, users can upload and stream music, and of course pictures. But the company has fallen behind established networks in the mobile space, with no phone version at launch.

Sounds really good, but is it way to late? The thing with Myspace is, can they continue to keep the users they have and not let them get pulled to sites like Wallop or Facebook. As their userbase grows older, only time will tell.

Posted by Jimmy Daniels September 2006

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