Five Stars for the Dot-Com Revival
SAN FRANCISCO-Call it the Grand Summit of the Internet Digerati. Or a geekfest worthy of Star Trek. The Web 2.0 conference, held last month in San Francisco, is an annual gathering of those hardy souls in Silicon Valley and beyond who are still convinced the dot-com era has legs. This second generation of Internet business is more interactive and user-generated-social networking, video sharing, wikis, and blogs.
Web dreamers know there's money to be made online again: MySpace and YouTube, America's two most popular Web 2.0 companies, recently sold for a combined $2 billion plus to Rupert Murdoch's News Corp. and Google, respectively. Yahoo!, Google, and eBay seem hungry for more. And venture capitalists are busy priming the pump, pouring $455 million into Web-based start-ups in the first three quarters of this year, over twice as much as in all of 2005.
What's going to be the next MySpace? At Web 2.0, U.S. News found five Internet companies poised to hit the big time:
Vox. An attempt to bring blogging to the masses, Vox is a Web refuge for those intimidated by the prospect of jumping into the ring with MySpace's 127 million users. Created by Six Apart, a small blogging-tools outfit based in San Francisco, the Vox service enables users to create their own private blogs-allowing them to control which parts of their sites they want their "friends" and "family" to see-complete with photo- and video-sharing features.
The inspiration for Vox came two years ago, when MySpace was beginning to draw huge numbers of visitors. Mena Trott and her husband, Ben, who cofounded Six Apart in 2002, felt the price of entry had gotten too high for would-be bloggers. "Trolls" left nasty comments on public sites; sharing photos with the world could be embarrassing. "Not everybody wants to be famous," says Mena Trott. "We thought, 'People will not want to be as public as they are now.'"
By creating a more private blogging space on the Web-where users can post pictures of their kids, say, knowing only relatives will see them-Vox seems to have tapped into a silent majority of sorts. In June, the site had 150 subscribers. By October, that number had jumped to 85,000-with most of those users between the ages of 25 and 45. Rupert, are you listening?
Ning. If Vox hopes to take blogging to the masses, Ning, which went live last year, is hoping to do the same for social networking. Backed by Netscape cofounder Marc Andreessen, the site allows users to build their own small social networking sites, complete with customizable, easy-to-design pages that include all the tools available on sites like YouTube, Flickr, and MySpace. Ning is already home to everything from a 24-7 video channel for classic hip-hop to a social network for motocross enthusiasts.
Cyworld. If nothing else, this South Korea-based mash-up of social networking, music- and video-sharing, and blogging is a reminder that the American Internet market isn't the only show around. According to Hyun-Oh Yoo, CEO of SK Communications, which owns Cyworld, the site now has 20 million users in South Korea, 40 percent of the country's population. Some 96 percent of 20-to-29-year-olds use the site "regularly," he says. And with 100,000 daily video uploads, Cyworld has more traffic than YouTube.
What makes Cyworld particularly interesting, though, is its revenue strategy. While most American Web companies depend on advertising-both Ning and Vox are counting on ads as their main source of revenue-Cyworld has a powerful E-commerce component. Since the service started in 1999, the site has sold 160 million songs, making it the second-biggest music store in the world behind iTunes. Its primary source of income, though, comes from $300,000 in daily sales of digital items used to decorate user Web pages. A U.S. version of the site appeared in beta this summer.
Sphere. The goal of this new blog-search technology, CEO Tony Conrad said during its launch demo, is to make the blogosphere "a little less geek oriented." The free service allows users to search across both blog and news pages to find information relevant to what they're reading on one of Sphere's partner sites-expanding the blogosphere "conversation," says Conrad, to the readers of mainstream media.
It works like this: When readers on a member site finish an article about, say, the Democrats' taking control of Congress, they come across a small "Sphere It!" button at the bottom of the page. When they click it, Sphere launches a search that uses the words in the story they just read to find contextually relevant articles in the blogosphere-bringing up a box onscreen with links, for example, to the commentary of a range of popular political blogs. This bridge between media sites and the blogosphere may not make bloggers any less geeky, of course, but it could provide a critical link between two fast-growing, but still separate, worlds on the Web.
Ether. The idea for Ether came to cofounder Scott Faber when he first encountered eBay in the late 1990s. The E-commerce giant had created the ultimate marketplace for products online: Global supply and demand curves met, as sellers and buyers found each other. But products were one thing, Faber thought. What about services? After all, from legal advice to healthcare to financial expertise, there is more to the economy than the exchange of tangible products.
With Ether, Faber may have the beginnings of an answer. Created by Ingenio, a pay-per-call Internet phone company based in San Francisco, Ether offers an online phone service for professional advice. A blogger who's an expert in fixing cars, for example, can add an "Ether" button to his site that will allow readers to call him. He can set his own rates-$10 for 30 minutes, say-and when a reader clicks the button, an Internet phone call is set up between the two. Before the connection is made, both parties must agree on a price; the transaction is then completed electronically. "Your phone will not ring unless you've been paid," says Faber. It may exist only on a small scale, but the services industry is on its way to a website near you.
This story appears in the December 18, 2006 print edition of U.S. News & World Report.