Microsoft's Spin-Off Social Network Site Debuts

Wallop, the social-network startup spun out of Microsoft Research Labs earlier this year, has landed $10 million in venture capital funding it will use to compete with Facebook, Friendster, and MySpace.

The company launched the site Tuesday at the DEMOfall 2006 conference in San Diego with a handful of investors. Backing the project are 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.

In development for four years, Wallop is different than most social networking sites. First, Wallop created an "invitation-only social experience" where people can only sign up for the service if an existing member invites them.

Second, the company plans to sell graphics and other features created by Web developers people can use to decorate their personal profile pages, similar to virtual worlds, such as Second Life and Weblo, or massive multiplayer online games (MMOG) World of Warcraft or Knight Online.

Finally, Wallop is based on Flash. The pages look great, and the interface more inviting and interactive than other HTML-based sites, according to Aaron Fulkerson, co-founder and chief operating officer at MindTouch Inc., which presents its collaboration tool, DekiBox, at DEMOfall 2006, too. MindTouch provides wiki software and appliances for both open communities and businesses.

Fulkerson first became aware of Wallop in 2003, while working for six months at Microsoft with MindTouch Co-Founder and President Steve Bjorg. "They have a brilliant user interface," Fulkerson said. "They're using ActionScript, rather than Adobe Flex, writing all the plumbing themselves, from the ground up."

Perhaps that's the strategy behind the developers' network. Developers who can code in Flash or ActionScript can create widgets, or "Mods," and sell them to other users in the site to spruce up the social network pages. The sellers, or Modders, get 70 percent of the revenue, the remaining goes to Wallop.

Wallop also created a "Wallop Modder Network" for developers who want to create Mods. The central resource provides tools and information about creating, uploading and selling Mods in the Wallop marketplace.

On the WMN site, developers will find examples of how to convert existing and new Flash content into Mods, an extensive Wallop API for ActionScript developers, an online forum where Modders exchange ideas and collaborate, and more resources.