| Andrej Sokolow |
San Francisco (dpa) – There are worse ways to draw in customers than promising to be different from Facebook.
For online network Ello, it’s working great.
Ello reports 30,000 users an hour seeking to join.
What’s not clear is how the new online community plans to stay in business without advertisements.
“You are not a product,” promises founder and boss Paul Budnitz, taking a jab at the business model of other social networks, like Facebook.
The primary difference, of course, is the lack of ads, especially the kind that relies on analysing user data.
The promise to be the anti-Facebook has won the site a lot of media attention. Although it’s only possible to join if you get an invitation, Budnitz says Ello is getting bombarded with requests.
It’s even gotten the dubious honour of an online attack … the kind of treatment usually reserved for the big guns.
Whatever is happening, it seems to be working.
Invitations are presently being resold on eBay.
But it’s unclear how many users Ello has now signed up. The bigger question is how it’s going to be funded.
So far, its only income are small fees for activating some specific services.
But those can’t be enough to cover costs. One fact that has raised eyebrows is the list of groups investing in Ello, a detail it had not released itself.
The list includes venture capital group FreshTracks, which has sunk US$435,000 into the network.
That’s practically a deal breaker for online activists like Aral Balkan, who say that these companies rely on a business model of rapidly multiplying their investment.
“When you take venture capital, it is not a matter of if you’re going to sell your users. You already have. It’s called an exit plan,” Balkan wrote on his blog.
There have been multiple attempts to create an independent alternative to Facebook over the years. One was Diaspora, put together by four students after raising US$200,000 on crowd-funding site Kickstarter.
However, because Diaspora is intentionally decentralised, it’s impossible to say how many people are on the network.
According to some estimates, the number might be as low as 23,000 active users a month.
By comparison, Facebook had 1.3 billion users at last count, helping it rake in cash with its use of personalised advertising, which also appears on mobile devices.
That helped the company bring in US$2.9 billion of revenue last quarter, with US$791 million of profit.