At Monday’s session of the TechCrunch 50 start-up conference, one idea particularly caught our eye: Companies that help you make money from your social-networking connections.
Josh Lowensohn/Flickr
At the TechCrunch 50 conference in San Francisco
TechCrunch 50 participants present their ideas to a panel of experts. One of the most popular presentations at Monday afternoon’s panel came from Udorse, a New York start-up backed by Founders Fund, which allows you to turn the photos that you upload to Facebook and elsewhere into “endorsements” for the products, places and things shown in them.
Think of Udorse as affiliate marketing for the common man. You sign up for the service and start tagging photos in Facebook with endorsements. If you endorse a product from a brand that works with Udorse, it will share a percentage of the revenue from the clicks made by your friends. The company launched on Monday with partner agreements from Armani Exchange and American Apparel.
(Google has invested in a company called Piaxazza that offers a similar picture-tagging technology, though it is more for publishers than for social-network users.)
Another start-up, called RefMob, offers a slightly different take on making endorsements to your friends. RefMob focuses on helping you broadcast — again, via Facebook — referral programs to your friends. These referral programs are the kinds of bonuses you often get via junk mail and email from banks, Netflix and other companies if you convince a friend to sign up. If you share a referral deal with your friends through RefMob, and one of your friends buys in, RefMob automatically shares the bonus with both of you. The company launched on Monday and hasn’t yet announced what companies it has on board, but it says it’s getting as much interest from local businesses like dentists as from big brands.
In marketing, creating word-of-mouth endorsements from trusted friends is considered the holy grail. But can online friendships and commerce mix? Google VP Marissa Mayer said she “really loved” the idea behind Udorse, and that she figured this would be a way for social networks to make money.
But at least one of the experts on the panel raised concerns with the idea. Tony Hsieh, CEO of online retailer Zappos, said the idea behind Udorse was “a little weird” — especially for one person to get paid for his friends to dress like him. As for RefMob, he said it seems like an “unnatural friend behavior” to formalize these sorts of referral programs.
In chats with this blog on the conference “demo pit” floor, both companies said that they’re not just about making money from your friends. Rather, they’re providing people ways to monetize information about their lifestyles that they’re already sharing online. RefMob said you’re not necessarily endorsing a product by passing along a discount to your friends — you’re just letting your friends know about a good deal that’s out there. And Udorse emphasized that people won’t just use the software to flack products from the company’s partner brands —
they’ll also use it promote a friend’s new fashion line or gallery exhibit.
Source: http://blogs.wsj.com/digits/2009/09/15/how-to-profit-off-your-online-friends/
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