Social Networking: A Link To Like Minds

Not all dot-com dreams died when the Internet stock bubble burst.

Amazon.com, the king of the dot-com era, is keeping some of them alive in 2005 inside a small office on Capitol Hill.

Light floods into a sparse whitewashed room above a yoga studio, where former Amazon director Josh Petersen and his cohorts sit around a large table plugging away on laptops. This is home to the Robot Co-op, a tiny company owned by the online retail giant.

The seven-member group has created a Web community based on sharing personal goals and dreams with a worldwide audience.

Its Web site, 43 Things.com (www.43things.com), invites people to list their goals and get information from other people who have done those things or want to. The free service has attracted a global following of 12,000 people in two months.

43 Things is part of growing wave of online social networking, encompassing Web logs, as well as Friendster, LinkedIn and other sites that form virtual communities. Go online to find a date, a plumber or someone halfway around the world who shares the same passion for belly-dancing.

Like their dot-com predecessors, the social-networking companies have generated plenty of hype and millions of dollars in venture capital. The field is getting crowded with services vying for attention, from Friendster and Google's Orkut to MySpace, tribe.net, craigslist and local startup Judy's Book. As people spend more time online, developers are inventing new ways for them to connect with each other.

Big companies' interest

No one can say for sure where this trend is heading, but Internet giants like Google, Amazon and Yahoo! are taking a keen interest.

One factor lending support to the business model is the sea change in advertising. Printed ads aimed at a general audience are being replaced by online ads targeted down to the smallest personal detail. If a company like Amazon knows that Julie in Tacoma wants to learn to make Greek food, it can send her cookbook recommendations or an ad for a local cooking class.

The technology is constantly evolving, too. Compared with earlier sites such as Friendster or LinkedIn, what's different about 43 Things is that you don't need to search for people with the same interests. The software finds them for you.

The same concept is behind the photo-sharing service Flickr and Web bookmark-sharing site del.icio.us.

People are matched based on the same key words or tags they use to express a goal, such as "lose 10 pounds." After the first person posts a new goal on the site, every other person with that goal is added to the group, creating instant networks.

Advertising on the site also works through matching key words, so that it can be automatically targeted to specific goals. A company might buy a Google ad to promote its teeth-whitening formula, and that ad appears on all the 43 Things Web pages where someone has listed a goal of "whiten my teeth."

The process means most of the site's 44,000 pages feature targeted ads, all without a single sales representative. 43 Things had paid advertisements from the first day it appeared, Jan. 1.

A similar process serves up Google text ads based on key words in Google searches.

"If we make the site useful to people, that model will work out just like it does for Google," Petersen said.

12,000 registered

Since the site went live, more than 12,000 people in 900 cities have registered and shared their goals, from the most mundane to the most bizarre. Among the throngs seeking to lose weight or visit foreign lands are three who want to take a bath in champagne and six hoping to learn how to raise just one eyebrow.

Some Seattle residents have started a bike-riding club and organized a gathering of neighbors in the Central District, while the site linked two people in Quebec and Beijing who decided to practice English together using Internet telephony.

John Hornbaker of Seattle has used the site to share his experiences using the iPod and climbing Mount Rainier.

"It was interesting and fun, seeing what all these other people wanted to do," he said. But he didn't receive much in the way of feedback. After a while, his interest started to diminish as he became busy with other activities. Hornbaker's not sure how much time and effort it takes to get something worthwhile out of it.

Social-networking sites need a certain critical mass to realize potential benefits and generate significant revenue, said Mark Mahaney, an analyst with American Technology Research.

"Whoever has the largest network has a real advantage over other players," he said. "It tells me if there really is a business opportunity here, you better build it quick and fast."

Amazon roots

The idea behind 43 Things has roots in Amazon's personalization feature, automatically suggesting new products based on what customers order. Petersen, the Robot Co-op's chief executive, and others helped create that feature at Amazon in the late 1990s.

Five sobering years since those halcyon days of the Internet boom, their new company retains some of that time's Utopian ideals.

But while the creators of 43 Things proclaim a desire to change the world, they don't want to live like robots to do it. Typical office hours are from 10 a.m. to 6 p.m., and employees have salaries that pay the mortgage, generous health benefits and unlimited time off for personal goals, which is the whole point of their new venture.

"A lot of startups have a very rough path before they succeed," said Petersen, 33. "We wanted to have a humane work environment from the start. We didn't want to ask our families to take on risk or take on partners who push for a return on investment in two years."

Unlike many startups today, this one faces no particular pressure to make money just yet.

"A lot of people came up with some lousy ideas because they were trying to make money and left a lot of good ideas behind," Petersen said.

Petersen said he and partner Daniel Spils, 36, began working on the project in Spils' basement last summer, after Petersen took a paternity leave from his search-technology job at Microsoft. Petersen had left Amazon in 2002, and Spils left later the same year to focus on playing music as the keyboardist for Seattle band Maktub. They made pitches to several other investors before settling on Amazon in the fall.

Petersen had worked with Amazon Chief Executive Jeff Bezos while creating the personalization technology, and a verbal agreement with Bezos in September set the Robot Co-op deal in motion.

"No one can say we know exactly where this is going," Petersen said. "That's a path they were comfortable with."

Amazon won't disclose the size of its investment or what it might demand of the robots later.

"We're not discussing the details around the strategy there or speculating on the future of the company," said Amazon.com public-relations manager Drew Herdener. "We don't discuss our investment strategies."

Company potential

Clearly, social networking has the potential to be a game-changing phenomenon, and Amazon wants a hand in it. As sole owner of the Robot Co-op, Amazon owns any technology the team develops, Petersen said. Although Amazon does have seats on the company's board, the co-op has autonomy in its daily operations, he said.

"We built it," Petersen said. "We're in charge."

The Amazon investment caused a bit of a stir when it was reported last month in Salon.com, the online magazine. Some users said the co-op should have notified people earlier. But traffic to the 43 Things Web site tripled in three days as a result of the publicity.

Petersen and Spils, the chief operating officer, said they have no specific obligation to share information with Amazon and wouldn't compromise their users' trust.

"The worst conspiracy theories bother us," Petersen said. "You can't make a site like this by abusing your users."

43 Things' privacy policy states that the company may collect and share with partners the information that users provide, including names, e-mail addresses, physical addresses, phone numbers, ages and genders.

So far, users don't seem to mind sharing personal information with the world, and many post their photos and links to their own blogs.

Such information could be a marketer's dream. Because the goals are so specific, the ads are better targeted, Spils said. About three-fourths of the 44,000 goals listed on the site feature text ads automatically generated by Google on the side of the page.

The group that wanted to learn how to raise one eyebrow, for example, is shown an ad for "shaping perfect eyebrows" from an online beauty guide.

The robots share their own lives through links to their personal blogs, and the Web site gets plenty of help from visitors. When Petersen wants some suggestions from users, he posts a goal such as "explore how 43 Things can promote online learning." Soon people as far away as Quebec, Australia and New Zealand chime in with ideas.

The goal-obsessed robots use index cards to scrawl ideas or features they want to work on and sort them by priority. Each week, goals are taped to the wall with the time estimated to finish and the actual time each task took. A stack of 50 index cards lists features they are considering, including adding a link on 43 Things pages to Amazon's Wish Lists.

For now, Amazon is giving the robots the luxury of time. "We're totally free right now," Spils said. "We don't check in."

Howard Winwood

Goto http://www.directmatches.com/hwinwood and look at the first of it's kind social networking company with a pay plan attached to it.