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Ning, a company that lets anyone create a social network, is integrating with OpenSocial, the standards platform that makes it easier for any developer to write applications for Ning.

Other social networks, including MySpace, hi5, Bebo and Friendster, already use OpenSocial. This means that a developer can build an application on a single standard — OpenSocial — and have them easily work on any of these networks. Thousands of developers have used OpenSocial to build applications for these sites.

Ning had already offered access to developers through its own platform, but the move to OpenSocial may see a surge of new developer activity: Today, launch partners include nearly 30 applications, such as Box.net’s service for sharing large files.

Ning stays it has more than half a million social networks, about 65 percent of which were used in the last 30 days, according to the company. Ning doesn’t offer more detail on metrics such as monthly unique visitors or total registered users, but certainly there is some opportunity for developers.

Ning users who create networks will be able to offer apps to their respective users through customized versions of application directories, featuring OpenSocial applications.

Ning is considering integration with Facebook’s platform. Facebook, however, has been internally debating how to fully open its platform; in the meantime, Ning has focused on OpenSocial integration.

Groupsites, a white-label social network product somewhat similar to well-known competitor Ning, has relaunched. Like Ning, its allows users to create their own networks, but focuses more on collaboration and productivity than leisure and casual connections.

Groupsites gives you sites that feature a drag & drop modular experience (similar to products like Netvibes or Pageflakes, where you can move widgets around your screen: see screenshot below) and allows you to pull in information from external websites. Groupsites’ managers can embed videos, photos and widgets directly into their site as one of the draggable modules.

Users can also now export Groupsites modules or widgets — such as the shared calendar — into a blog, website, or another social network.

This is a competitive field. Aside from Ning, there are up to 75 other players by one count, and so Groupsites has its work cut out for it. Groupsite is focusing on offering a nice interface. It provides the standard set of tools to allow groups to communicate, share, and network, by integrating discussion boards, group blogging, member profiles, relationship sharing, and e-mail blast capability. Its focus on productivity becomes evident in its collaboration tools, including shared calendaring, file storage, and media sharing.

In some ways, Groupsites is to Ning what Facebook is to MySpace:

While Facebook was always thought to have a much cleaner interface than MySpace (Facebook’s old user interface featured drag & drop profiles), MySpace was known more for being able to customize style sheets and backgrounds with glitter and other assortments. Likewise, the difference between Groupsites and Ning is clear after using the software for a few minutes.

Groupsites is a product of Collective X, which was founded by serial entrepreneur Clarence Wooten. In the few years since the Columbia, MD startup got started, CollectiveX has made do on $1.25 million in seed investing. Its traction is fair; there are 17,000 groups actively using the platform, and the site has more than 100,000 registered users, says Wooten, who sold his previous startup, ImageCafe for $23 million to Verisign seven months after launch.

The business model is very similar to Ning — CollectiveX sells advertising against its free users’ accounts, and sells premium features a la carte: for payments of $9 per month admins can gain more control over group permissions, enhance network security with 128-bit SSL encryption, increase storage capacity to 3 gigabytes, statistics and domain mapping, custom branding, ad removal, and even replace ads with their own advertising.

Only 20 percent of Groupsites’ groups are public, because most of its users –ranging from mothers’ groups, book clubs, college campus groups, corporate intranets, and large non-profits — prefer private group sites. CollectiveX’s biggest customers include The Nature Conservancy, American Chemistry Society, Fannie Mae, and Accenture.

With the launch of HoffSpace, I believe that social networking sites have truly achieved their potential. No, it’s not a groundbreaking new initiative from Facebook, nor is it a new site that brings together the best of Facebook, MySpace, LinkedIn and more. It’s way cooler — a social network for fans of global superstar David Hasselhoff (best known for his starring roles in the TV shows Knight Rider and Baywatch) apparently built using create-your-own-social-network platform Ning.

I say it’s about time. I mean, not only are there a bunch of social networking sites out there, there also dozens of companies that want to help you build your own social network — most famously Ning, which is supposedly valued at half a billion dollars. Why shouldn’t the Hoff get into the act? He already has a fan page on Facebook, not to mention several YouTube hits and a Causes page to help him stay sober.

HoffSpace will be a place for Hasselhoff fans to share their love for the Hoff, see exclusive videos and photos and ask him for help. In his post introducing the network, Hasselhoff says:

I realized that while two people from two entirely different countries and backgrounds may seem to have nothing in common, the only thing they might have in common is me. … So I decided to start a network where people from across the world might come together and get a conversation started over me.

HoffSpace has more than 13,000 members already, more than any of the social networks promoted on Ning’s front page. And in case you’ve forgotten what gives Hasselhoff such universal appeal, here’s a reminder.

Relatively few people have the time and skill to sit down and hand code a community-based website. Even fewer actually want to. Webjam is a service that simplifies that process greatly. However, there are plenty of other services out there like the well-funded Ning and Soceeo. But as Webjam cofounder and chief executive Yann Motte told us, “people have learned to do all this stuff [build sites with online tools] the past few years, the key question is: ‘What the hell to do now?’”

The answer, as he explained, lies beyond building sites simply for the entertainment value. It lies in building communities with a purpose. Webjam feels it’s the service best poised to do that because it has a great set of tools to help users build their sites. The best of these tools rise to the top thanks to the wisdom of the crowds.

You see, Webjam makes it simple for anything that is on a Webjam-powered site to be replicated with one click. (Assuming it’s not some piece of proprietary work that the original author does not want you copying.) By tracking what modules and widgets are copied most often, Webjam creates a directory for the best of these, much like news site Digg promotes its most popular stories to its front page.

In fact, Motte calls the widget popularity function a kind of “Digg on steroids” because it isn’t simply about voting on what features are best, it’s about which ones are actually getting used and shared the most. The fact that you can see various ones in use on different sites and cherry-pick the best is a very nice feature.

Motte believes that there is a rising trend on the web towards openly sharing things by default rather than having everything locked down. As he explained, “if you run the local football team and make a site, you’re happy to have another site take it over [meaning its look and feel].”

One thing that Webjam is particularly proud of and another way it helps differentiate itself from Ning is that the average time spent on a Webjam site is significantly higher than it is on a Ning site, according to data from Compete. Motte thinks that this reflects Webjam’s attention toward helping create sites that communities want and the service’s ease in layering on different ways to interact on these sites.

But it really comes down to how easy it is to build a solid site from scratch. Ning looks a little nicer from a user interface (UI) perspective, but Webjam’s site-building tools are more intuitive. This is especially true when you visit other Webjam sites and see something you like and can simply grab it for your own site.

That being said, Webjam has a long way to go before it will catch Ning in both hype and, more importantly, usage. Ning had over 8 million visits in June of this year, according to Compete. In that same month, Webjam had just around 80,000. Year over year both are growing, but impressively (given its size), Ning is growing even faster than Webjam still. Did I also mention Ning’s valuation is now north of a half billion dollars?

Right now Webjam is still a relatively small company based out of the UK. It hopes to open an office in San Francisco, Calif. before year’s end.

In terms of making money, Webjam offers a premium version of the site builder that lets users do things such as take control of their own advertisements and use their own domain names. In September, the company will launch Webjam Branded Service offering, a fee-based business-to-business-to-consumer (B2B2C) service. This is what it’s called when a business sells a service or product to a consumer using another business as an intermediary.

Webjam raised a $2 million first round last year. Earlier this month it extended that round a further $1.9 million, led by original investor I-Source. It is said to be working on a larger second round.

A while back, I finished reading Sarah Lacy’s book on Web 2.0’s rise in Silicon Valley, “Once You’re Lucky, Twice You’re Good.” I let my thoughts percolate on it until I saw the New York Times review of the book by tech journalist Katie Hafner. The NY Times reviewer was critical and Lacy herself feels like it was more like a review of herself than her book. Some of the criticism of the book is fair, some not.

Lacy herself has proven to be a lightening rod for personal attacks. Her cover story in 2006 of Digg and the Web 2.0 phenomenon, unfortunately headlined “How This Kid Made $60 Million In 18 Months,” was criticized because it was full of hype. She also brought the term “Twitter Mob” into fashion when she interviewed Mark Zuckerberg on stage at South by Southwest and ran into hostile remarks generated via live group Twitter posts. These events got so much attention that I can sympathize with Lacy’s view that people often criticize her, rather than her content.

By contrast, reviews of “Groundswell,” the Web 2.0 book by Charlene Li and Josh Bernoff, haven’t triggered nearly as much animosity. Both books were released about the same time in May. Interestingly, it is “Groundswell” that still has a decent ranking on BarnesandNoble.com, (2,586), while Lacy’s book has dropped in bestseller rankings to 37,724. (As an author myself, I admit to being overly obsessed with book rankings). I’ve met Lacy once, but really don’t know her personally.

Lacy’s book is not just a chronicle of the growth of usage for Facebook and the dollar signs in the eyes of the valley’s hottest stars who created the participatory web, commonly known as Web 2.0. It gets behind the curtains and peers into who these people are.

I thought its basic argument behind the book was good. I remember the “nuclear winter” of 2001 after the September 11 attacks and the gloom that pervaded Silicon Valley. There was only one group of people who were optimistic at that time, and, accurate or not, Lacy credits them for saving Silicon Valley and inspiring Web 2.0. Collectively, they were known as the PayPal mafia. It was the entrepreneurs such as Max Levchin and Peter Thiel. They were young Turks who got rich from PayPal’s IPO and subsequent sale to eBay. They were perhaps the last of a long line of lucky entrepreneurs who cashed in on the first Internet boom, just before the weak economy led a lot of people to write off technology investing.

While everyone else collectively backed off, Thiel and Levchin put their newfound wealth to work. They started new companies and invested in others, planting the seeds for an eventual spring for Silicon Valley. If it weren’t for such people, the valley might indeed have remained to afraid to try again. There is a certain amount of truth to this, and a certain amount of fiction. But Lacy captures the motivation behind these people well. Marc Andreessen, for instance, is motivated by his early association with Jim Clark, the only entrepreneur to found three billion-dollar start-ups in Silicon Valley. Andreessen, who cashed in big with Netscape and Opsware, is now working on the social networking platform company, Ning. That represents his attempt to prove wrong the naysayers who say he was just at the right place at the right time.

It might seem like the companies profiled in the book are randomly selected. But Andreessen and the other entrepreneurs highlighted share a common DNA: they want to become serial entrepreneurs because they’re addicted to the start-up life. It is what distinguishes the PayPal mafia and the others in the book who aren’t just sitting on the sidelines with their new economy riches.

It’s open for debate whether the personal details in the book about these entrepreneurs are really new or enlightening. Matt Marshall and Eric Eldon both know these details because they’ve paid attention to this space for a lot longer than I have. I am more distant from the day-to-day reporting of the social web, and so I have a more charitable view of the streamlined and anecdote-heavy stories that Lacy has put into the book. As such, I think general readers will find them interesting. These are the nuggets that I found the most interesting about the characters at the center of the social networking craze:

– Slide’s biggest competitive advantage over rival RockYou in the widget war: Max Levchin, co-founder of PayPal and CEO of Slide, has cheated death a few times. Doctors told his mother that the sickly boy wouldn’t live past three because of chronic bronchitis and chronic asthma. His mother saved him from drowning in the Black Sea at age 9. When his family fled Kiev, Ukraine, and the radioactive clouds of Chernobyl, Max had to leave behind a radioactive shoe. Nowadays, Levchin sleeps a couple of hours a night. Hence, the magazine cover: don’t bet against Max.

– Kevin Rose started Digg, the news story recommendation site, with his savings of $10,000. Rose hoped that one day he could pay his rent with the site. He split up with his girlfriend over the nutty idea. In past negotiations, Digg’s purchase price has been pegged at around $150 million, with Kevin’s share estimated at $60 million. In 2007, Marvel Comics released a comic book about Captain America. In a crowd of people, there’s a kid with shaggy hair and a Digg T-shirt. This story, part of the Business Week cover, got a lot of criticism because the story seemed to exaggerate the importance of Digg and the wealth of its founders.

– Evan Williams sold Blogger to Google. Then he left Google. Before starting Twitter, Evan Williams had a business called Odeo. It wasn’t working. He told the board he was shutting it down. But he didn’t just walk away from it. He proceeded to pay the investors their money back. Valleywag wrote, “Nice guys finish last.”

– Mark Zuckerberg’s sister Randi produced a cheeky music video with a reference to Facebook turning down Yahoo to go public. People interpreted the YouTube video as a sign that Zuckerberg’s company was about to go public. She had to pull the video down.

– Marc Andreessen’s favorite eatery is Hobee’s in Palo Alto. He eats there so much that two Hobee’s employees once fought over who could nominate him for customer of the year.

– In May 2007, at Facebook’s F8 conference in San Francisco, Zuckerberg took the stage in front of thousands. Then 23, he wasn’t used to big crowds and was continually wiping his sweaty palms on his jeans. He wore his signature flip-flops and his parents, sister and girlfriend were there to watch him. He stockpiled a bunch of the Adidas brand flip-flops because they discontinued the model.

– Jay Adelson of Digg attended Allen & Co.’s exclusive Sun Valley Media Conference in 2007. When Sumner Redstone, chairman of Viacom, approached, Adelson thought he was going to get an offer for his company. Instead, Redstone asked him what time it was. That was a come-down. But at the same event, Bill Gates told Adelson that he loved Digg. Digg also had negotiations with CurrentTV about an acquisition and Rose marveled at being on the opposite end of the table talking with CurrentTV chairman Al Gore, the Nobel prize winner.

– YouTube’s co-founder Chad Hurley is married to Jim Clark’s daughter. Clark is the only entrepreneur in Silicon Valley history who has created three companies that hit billion-dollar valuations: Silicon Graphics, Netscape, and Healtheon. It’s like Old Money meets New Money.

– A peak inside the world of Peter Thiel, co-founder of PayPal and president of $3 billion hedge fund Clarium Capital Management: A Fourth of July party on the rooftop of his 4,000-square-foot San Francisco home, with a view of the Crissy Field fireworks. Valet parking and shuttles transport guests to the home, where they dine on four-star food from Ozumo Sushi amid a bunch of book shelves and chess boards.

– When Max Levchin proposed to his fiance, he gave her a 3.14 carat diamond ring. She responded, “Pi?”

Maybe you’ll like these details. Maybe they’re dull. But the best argument that Lacy can make about the importance of her book is that she was here, reporting in Silicon Valley, through the boom, the bust, and the recent recovery. As such, she has the perspective to understand and explain some of the currents that drive the cycles of innovation in a region that is once again, despite the rise of India and China, the center of worldwide attention. Lacy’s book has the perspective to explain the crazy events of our day, like why 1,100 people showed up on Friday night to attend the panel and party staged by TechCrunch.

updated
Lithium Technologies, which builds and operates social networks for enterprises, has raised $12 million in venture capital today.

The company’s clients include Dell, AT&T, Sony PlayStation, Univision, and PayPal — all businesses with large user communities and heavy customer service and product support needs. Lithium’s community sites are designed to help these clients streamline the interaction with their customers and improve brand loyalty. To get an idea of how the sites function, take a look at the one Lithium designed for Dell. With features such as Dell forums where customers can engage with each other to answer support questions and share tips, the main point is to build brand loyalty in a two-way conversation with consumers.

The idea is to use best practices to stir up people like Jeff Stenski, a Dell customer who has voluntarily spent the equivalent of 141 days of his time over the years and posted more than 22,000 answers to technical support questions on Dell’s community web site. Stenski’s answers have been viewed more than a million times, saving Dell more than $1 million, according to Lithium. That prompted Forrester Research analysts Charlene Li and Josh Bernoff to call out Lithium in their social networking book, “Groundswell: Winning in a World Transformed by Social Technologies.”

A number of startups have moved to deliver similar social networking communities to the enterprise market. Marc Andreessen’s Ning social-networking platform can be used to build enterprise communities. Liveworld, Igloo, HiveLive and KickApps also promise companies that they can build thriving social networks. But Lithium has attempted to set itself apart by using game-like motivators such as leaderboards, rewards, reputations and profiles.

We mentioned the trend of using game-like features in non-game applications in our earlier story about Funware. In the Dell IdeaStorm voting, the most-frequent contributors can get “iSquared powers,” meaning they get ten times the voting power of other community members when it comes to selecting which of the IdeaStorm product ideas are the best.

“We’re managing sites for companies that collectively get a billion page views a month,” said chief executive Lyle Fong. “Our job is to get those one percent of users who are hardcore fans and turn them into the company’s biggest evangelists.”

Lyle Fong, by the way, is the brother of Dennis “Thresh” Fong, a professional video game player who won a Ferrari at age 20 when he was crowned the world’s best.

The boyish-looking Fong brothers of Los Altos are legendary in video games. Dennis dropped out of UC Berkeley to play video games for a living. He picked up honors as the world’s best “Doom” and “Quake” player. He was one of the first people to actually make video gaming a profession, winning big cash prizes and the Ferrari.

Dennis co-founded another company, GX Media, with Lyle. At first, they were selling gaming computers out of a dorm room. In 1997, they founded Gamers.com, a site that offered news and community forums for hardcore gamers, as well as game fan site FiringSquad.com, started with their other brother, Bryant. They raised $11 million in venture financing from CMGI in 1999 and lived the good life. Gamers.com even threw a party at the Playboy Mansion during an E3 show.

In 2001, Ziff-Davis bought Gamers.com and GX Media spun out Lithium Technologies under Lyle. Dennis went on to found Xfire, an instant-messenger service for gamers which was purchased by Viacom’s MTV for $102 million. Dennis is now head of the startup Raptr, a gamers social networking client.

Lithium is based in Emeryville, Calif. This second round of funding was led by Benchmark Capital. The cash will help the company expand its marketing and product development as it faces new kinds of competitors. The company previously raised a $9 million round from Shasta Ventures and Emergence Capital Partners in 2007.

White label social networking platforms is a crowded field. Already out there is Wetpaint, Grou.ps and of course, the $560 million-valued Ning, among others. That’s not deterring a new entry, Soceeo, from launching a vertical-driven network creation tool. In fact, the company openly acknowledges its competitors but believes there is more than enough room for one more player.

Soceeo, which is a play on the word “socio” (as in socio-economic), aims to be a social network creation tool that is so easy to set up and use that “my grandma could do it,” says co-founder Emile Cambry Jr. Cambry, along with fellow co-founder Joseph Curralli Jr. believe tight integration, along with simple customization and management will help their product stand out.

With this alpha release of the product, Soceeo will give users one gigabyte of storage space and the ability to make public or private networks. Within these networks, users will have the ability to share files, send e-mails (both inside and outside the network), use discussion boards and create robust profiles with adjustable privacy settings.

Network operators will also be able to run there own banner ads while keeping 100 percent of the money made off of them. In the next iteration the plan is to allow any network creator to charge users to create accounts if they wish to go that route to make money as well.

In testing out the alpha version of Soceeo, its strengths are speed and straight-forwardness. The banner along the top is clearly labeled with sections for “My Profile”, “Media”, “Calendar” and “Blogs” along with other sections which can be customized. These make it very easy to find what you’re looking for. The user interface isn’t going to “wow” anyone, but this is still an alpha release.

As with most of these white label social network creators, the goal is to make it easy to create a community for just about anything by anyone. Say I wanted to create a Colin Farrell community (as in the screenshot below), I could set one up in a matter of minutes.

The same is true for some of its competitors, which is why Soceeo is pointing to more advanced capabilities that will be available in its next iteration such as an API platform that will allow for even more customization and flexibility. There will also be more applications specifically tailored to specific verticals such as the ability to sell ringtones, apparel and mp3s for musicians for example.

Soceeo is based of out Chicago, IL and is entirely self-funded for the time-being.

update: Be sure to check out Cambry’s video comment in the comments section as well. He explains a bit more of his thoughts and plans for the service. A great use of a video comment.

I spent four days this week at the Web 2.0 Expo at the Moscone West convention center in San Francisco. Here is a summary of the scene, including photos and my impressions of the show.

I attended the RockYou/Clearspring/Mixercast reception on Tuesday night at Bong Su, a trendy new Vietnamese restaurant. Three companies sponsored the party and so it made the Web 2.0 froth seem a little less excessive, since they can split the bill. There I met RockYou founder Lance Tokuda and enjoyed some fancy fried rice.

On Wednesday, Tim O’Reilly, the head of show organizer O’Reilly, kicked off the conference with a plea for innovation even in the midst of tough economic times.

“If you follow the headlines, you might as well stay home,” O’Reilly (left) said as he opened the speeches on Wednesday. He praised the Internet as the ultimate platform and its ability to create a revolution in human augmentation. That means that, with the web at our fingertips, we won’t have to remember much. He also told the Web 2.0 denizens to harness the collective intelligence of the web. He suggested we rise above the level of the single device and think about making software work across everything.

Go after the hard problems, he implored. “Do you think we’re really done yet?” We’re at the beginning, he said. And he cited a poem by Rainer Maria Rilke, “The Man Watching,” which O’Reilly said he read to his father on his death bed. It’s about how you can grow by being defeated by those who are greater than you are.

That led to the conversation with wunderkind Max Levchin, the CEO of Slide, an event which we used to introduce our live blogging. Eric Eldon caught up with Levchin afterward for a Q&A. The talk inevitably led to “how do you make money?” question that every Web 2.0 company has to grapple with. Levchin made a rare admission for a CEO. He said he was “extremely uncomfortable” being in front of the crowd and was happy that all he could see out there in the audience was a bunch of bright lights. You see, CEOs are just like the rest of us. Except they have a lot more zeroes in their checkbooks.

I was back bright and early the next morning to listen to John Battelle try to get Marc Andreessen to talk trash about Microsoft. But Andreessen (at left in image) was fairly diplomatic, saying only that he was happy there were “counter weights” to Microsoft such as Google. He was happy, he said, that the original ideas of the Netscape Navigator have survived (like the “back” button on browsers) and that something of Netscape lives on in Mozilla’s Firefox browser. He, like Levchin, has a company, the social networking platform Ning, in the $500 million valuation club. If Ning keeps going, it could become Andreessen’s third big start-up home run.

Read the rest of this entry »

(This is a continuation of live blogging from the Web 2.0 Expo at the Moscone West convention center in San Francisco) On the second day of the Web 2.0 keynotes, John Battelle of Federated Media is interviewing Internet wunderkind Marc Andreessen, the CEO of Ning, a maker of social networking platforms. He is, of course, the man behind the original Mosaic web browser and (once upon a time) wildly popular Netscape Navigator browser.

Andreessen recently raised $60 million for Ning, giving the company (which lets people build their own social networks) a valuation of over $500 million.

Battelle noted that the cable companies and other media companies have all piled into the Internet now.

“The good news is the future for most forms of entertainment is now the Internet,” Andreessen said. “By and large, the media companies are still unprepared, which is ironic given how much time they have had to prepare. Newspapers are in absolute freefall from a business standpoint.”

Netscape, he recalled from his own experience at the early browser company, launched several businesses. Free browsers, fee-based versions, and web tools. It took off like a rocket, had a great initial public offering, and then Microsoft came into the browser market. Andreessen noted, “And they used my code from the University of Illinois.” He got a laugh out of that. The company had to sell out to AOL in 1998, largely as a failure. The browser turned into Mozilla, which turned into Firefox and it’s now gaining traction as the alternative to Internet Explorer.

What might have been, Battelle asked? If there was one big surprise, Andreessen said, it was how many early ideas have lasted, like Javascript. Even the “back” and “forward” buttons on browsers and “bookmarks.”

“The surprising has been the persistence of the ideas and the persistence of the browser even as a separate piece of software,” he said.

Before Ning, Andreessen had founded Opsware, which makes it easier for corporations to run their computer networks. He scored again, after scoring with the Netscape IPO, when Hewlett-Packard agreed last year to buy Opsware for $1.6 billion.

Battelle notes that Andreessen blogs and opines. He asked Andreessen to opine on Microsoft. “Wonderful company,” Andreessen quipped. Microsoft has been arguing that it’s not the “bad guy” anymore and that Google is the one to worry about. Is it defanged, Battelle asked. Andreessen said Microsoft is still very powerful but there are certainly a lot of “counterweights” to Microsoft. “There are new kinds of companies,” he said. The landscape is splintered and diverse. He thinks the Yahoo deal would add a lot to Microsoft and both would also be good separate. It’s sad that Yahoo would go away but it is part of the natural evolution.

“Are there opportunities for a lot of new companies?” Andreessen said. “Yes. The underbrush of the valley keeps on growing.”

Battelle congratulated Andreessen on his funding, which Batelle said was uncovered by a “blogger.” That would be Anthony Ha of VentureBeat. Writing afterward on his own blog, Andreessen said it’s nice to have money for the coming “nuclear winter.” He said he meant the financial woes in the stock market, which can cause a spiral down.

Ning, a platform for setting up new social networks, is adding 1,500 networks a day and millions of users. “We built Ning to be a general-purpose, programmable platform,” he said.

Regarding Google’s challenge to Facebook, OpenSocial, Andreessen said Facebook did an amazing thing of rolling out the social-networking platform for third-part applications to run it. We are at the early days of understanding the implications for advertising, he said. That spurred OpenSocial, he said. Facebook is Read the rest of this entry »

Updated

Make-your-own-social-network company Ning has raised a $60 million fourth round of funding.

Co-founder Marc Andreessen, who also founded Netscape, says the funding came at a whopping $500 million pre-money valuation. That’s almost three times the Palo Alto, Calif. startup’s $170 million valuation  back in July, when it raised a $44 million third round. Even back then, Ning was something of a poster child for huge (and, some argued, overinflated) Web 2.0 valuations. With the economic downturn, we thought the days of such valuations were over, but it looks like we were wrong.

It’s not clear what Ning, which allows you to create and customize your own social network, is going to do with all this cash, since social network companies don’t usually need a lot of capital. On the other hand, its traffic has been growing like crazy — between February of 2007 and 2008, traffic increased by 4,803 percent, to 4 million visits. And Randy Befumo, research director at previous Ning investor Legg Mason Opportunity Trust, has said the company needs money to build the infrastructure for growth.

(In the latter article, we argue that Ning’s numbers — particularly the fact that 115,000 social networks were created using its platform — aren’t necessarily as meaningful as the site’s usage.)

You can read Fast Company’s new in-depth profile of Ning here.

Update: Marc Andreessen just emailed us. Here’s what he said:

The valuation was $500M pre-money, about $560M post-money.

The size of the round was the money we have raised minus a fee to Allen & Company. About $60M net.

We raised the money to enable us to keep scaling given our accelerating growth (over 230,000 networks on Ning now, growing at over 1,000 per day) and to make sure we have plenty of firepower to survive the oncoming nuclear winter. At current growth rates, we don’t need it to get to cash flow positive, but having lived through the last crunch, it’s good to be conservative with these things.

1. Niche social networks grow, market leaders level off
2. Startup employees headed to big companies?
3. Stage6 had a lot of would-be investors, still has at least one
4. Sprint’s fate unclear
5. Sandvine, a company that helped Comcast block BitTorrent traffic, facing trouble
6. Chatterous: Message all of your friends at once

Niche social networks grow, market leaders level off — Web metrics service Compete reports that leading social networks MySpace and Facebook saw traffic plateau in the US between January and February, with smaller sites growing fast. One must be cautious about interpreting monthly numbers — large networks have seen seasonal dips in the past, and obviously no social network can grow forever (our coverage). Regardless, the largest, fast-growing social network is high school social network MyYearbook, which has grown 284 percent since February of last year, to more than 20 million visits this past month.

A host of Silicon Valley companies also have reason to be happy. Business network LinkedIn grew 729 percent to more than 11 million visits. White-label social network provider Ning, which we’ve previously questioned the potential of, is doing well for itself, having grown 4,803 percent to nearly four million visits. Likewise, messaging service Twitter, which generally keeps a tight lid on its internal numbers, grew 4,368 percent to more than four million visits.

But the fastest-growing site of them all is Fubar, an online bar and happy hour — and not a dating site, as its founders made clear to us last year (see comments). It grew to 3,272,217 percent to more than 6.5 million visits last month. Cheers!

Startup employees headed to big companies? — The Wall Street Journal puts together some evidence — and more speculation — that there’s “a new flight to safety [at big companies] among tech-industry workers as the economy struggles.”

Stage6 had a lot of would-be investors, still has at least one — The aftershocks of DivX’s decision to close popular online video site Stage6 are continuing. Today, Greg Sandoval reports that MySpace cofounder-turned-investor Brad Greenspan still has an offer on the table, even though Stage6’s core team has quit and the site has all but shut down. We’ve also spoken with a number of investors who said they would have been interested in funding Stage6 if it was spun out — as was DivX’s original plan. As of today, the site’s front page features a final message about the closure in a rather bizarre-looking format. The site has otherwise been wiped clean, except for a message at the bottom of the homepage (pictured) encouraging Stage6 users to go to Veoh, another online video site.

Sprint’s fate unclear — A host of rumors are circling the company. One is that T-Mobile is looking to buy it. Another is that Nextel will be spun off. More here.

Sandvine, a company that helped Comcast block BitTorrent traffic, facing trouble — Last year, Comcast tried to selectively slow down sites and services that use a lot of bandwidth, in order to prevent peer-to-peer file-sharing. It used network management software provided by Sandvine. Comcast’s actions got it in trouble with the FCC (our coverage). Now, not surprisingly, the market for Sandvine’s software is withering, TorrentFreak reports.

Chatterous: Message all of your friends at once — Chatterous lets you send a single message to friends across SMS, IM and email. Mashable has the details on this Y Combinator-backed company.

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Ning, a service that lets users create their own social networks, has passed a new milestone: Users have created more than 115,000 social networks, the company said.

But Ning’s efforts to build a real audience and retain it faces some serious challenges, and it’s not clear how it will ever get big enough to justify the massive $44 million investment it received earlier this year, which gave it a $214 million post-money valuation.

First, here’s what Ning does: Ning allows anyone without technical knowledge to design and build a social network and features full page customization and built-in widgets for photos and videos. Social networks on Ning include “Ask a Ninja”, a social network built around a ninja character and “Fingerstache,” a social network for users who make a mustache by drawing on their finger and putting their finger under their nose.

Ning’s challenges come in three areas: First, users of any particular social network built on Ning can’t share their data across different Ning social networks, negating the advantages of network effects. This means that each social network on Ning has to grow an audience to start from scratch. (From Ning’s perspective, separate data gives social network creators more control). Second, if any social network actually becomes popular, there’s a good chance that it will migrate off Ning because independence affords more flexibility and control. Third, alternative platforms, like Facebook, offer far greater reach. Build an application on Facebook and you can market yourself to Facebook’s 53 million active users. Even if Ning allows for data sharing across Ning users, it has a fraction the active user base of many social networks.

The number of social networks on Ning continues to grow quickly. Since the announcement on November 1st, the company says the number of social networks on Ning has grown past 122,000. On Ning’s blog, the company has kept tabs on the latest count of social networks created on Ning here (there are least nine other posts on the subject, including here, here and here).

Typical measures of a website’s popularity are page views, active users, time spent on site and login frequency. The number of social networks might matter, if only it meant users were active. But for Ning, that’s questionable because there aren’t many unique visitors per social network and it will be hard for Ning to grow at the lightning fast pace it expects.

Ning’s actual web traffic is somewhat of a mystery. Panel estimates do not accurately estimate traffic because Ning offers a white labeled service and other features that are not accounted for in panel estimates, according to the company. But Bianchini declined to share company data for Ning’s traffic measured in unique visitors or page views. That leaves panel estimates. The panel estimates of unique visitors per month vary widely. According to Comscore, Ning attracted 793,000 unique visitors in the US in September, a ratio of only 7.8 visitors per social network created. According to Quantcast, Ning attracted 158,000 unique visitors in the US.

By comparison, Facebook has 55,000 regional, work-related, collegiate, and high school networks. Facebook has 964 active users per network. MySpace is just one giant network. From Ning’s perspective, the comparison isn’t meaningful because Ning is designed to let many users create social networks. In contrast, Facebook creates networks based on real world organizations. Still, Ning’s low ratio of visitors per social network suggests Ning traffic might be spread thin.

According to Bianchini, Ning’s page views are growing 10 percent each week. She said 40-50 percent of Ning’s traffic is outside the US, numbers that aren’t accounted for by Comscore’s and Quantcast’s estimates.

Bianchini said Ning, a Palo Alto company, can develop into a major player. She said: “We’re doubling our size every 2-3 months and we only need to double another 10-15 times to become a top site.” Doubling 10 or 15 times would multiply traffic by a factor of 1,024 or 32,768. But many websites given that traffic multiplier would become a top site, so can Ning really make it? Consider this: A site with only 2 million page views (Ning probably serves many more page views than this) at that growth rate would grow to as much as 65.5 billion page views per month in as little as two and a half years. By comparison, Facebook serves over 65 billion page views per month. If you think it sounds far-fetched that Ning would grow that fast, you’re not alone.

Ning grew only 11 percent from last December to this past March, but then it doubled from March to September, according to Comscore data. The reason for the growth is that Ning launched “Your Own Social Network for Anything,” according to the company. Granted, Ning is still in early stages of ramping up traffic, but traffic growth is still choppy. Expecting Ning’s traffic to double every two or three months for the next few years is brave, to say the least.

[Update: Bianchini says internet history shows users prefer openness, demonstrated by the departure of early internet users from AOL’s walled garden, to launch their own websites. Bianchini’s vision is that masses of users will migrate to Ning because Ning offers that freedom for building social networks.]

Expectations for Ning are high, at least for its investors. Ning’s early backer was Netscape co-founder Marc Andreessen. In June, Legg Mason Capital Management invested $44 million at a $170 million pre-money valuation, a stunning figure, especially because Ning is still a young company. Legg also invested in Zillow, which we recently reported may be in trouble.

Why does Ning need all that money? Randy Befumo, Legg’s director of research, said, “I think that starting Web 2.0 is easy, but scaling it is much more complex. Scale ultimately involves infrastructure and people to make that infrastructure work, who are not free. Further, you can start great apps, but if you want to monetize, you need systems and staff. We see our investments as allowing good ideas to scale and also allowing people to begin monetizing good concepts.”

But with questionable traffic growth for Ning, what needs scaling? Buying more servers and hiring new employees doesn’t necessarily make Ning’s product more compelling to users. Trumpeting the number of social networks created on Ning seems to mask underlying questions about the utility of Ning’s service and whether it can grow into a substantial business.

[Disclosure: Doug Sherrets owns a small number of Facebook shares.]

Playboy, the granddaddy of porn, is trying to penetrate college campuses — and this is no special edition magazine featuring nude students.

Copying Facebook’s early playbook, it is launching a social network called PlayboyU that only people with .edu addresses can sign up for.

Notably, for Playboy, it says it won’t feature nudes. Instead, it will try to get students to network with each other without the rest of society getting involved. The site’s splash page (the page you first land on when you get there) still manages to be highly suggestive.

From what we understand, the .edu restriction implies professors and university staff could also join — again, like Facebook in its early days.

Playboy is using Ning’s build-your-own-social-network software, and will also include school-themed pages, event listings, polls, a syndication outlet for college media organizations and other typical social networking features that it hopes will appeal to students.

Competitors in the suggestive/soft-porn networking market include Zivity, which we covered last week. Also worth noting: Facebook and Myspace grew in part because it gave students an easy way to browse pictures of hot members of their peer group.

Playboy has been extending its empire from its storied magazine, not just to web sites but to venues like its new, popular nightclub in Las Vegas. The company is focused on cutting edge tech across all its properties.

For example, I recently heard a story about its Vegas club rejecting one person for past bad behavior. According to my source, the club used digital imaging video technology to immediately spot the person standing in line, instantly compare him against its video database of black-listed people and deny him entrance by the time he got to the door.

Perhaps it will integrate this face-matching technology to give PlayboyU members VIP access to its clubs.

Here’s the latest action (updated):

Airborne mash-up: lawn chair travels 193 miles –Oregon resident Kent Couch tried to fly to Idaho last weekend — in an apparatus made out of his lawn chair carried by 105 large helium balloons. He carried instruments to measure altitude and speed, and also a parachute. He didn’t make it, though. (Image courtesy of AP)

More adult supervision at Facebook — Chamath Palihapitiya, a former AOL executive turned venture capital investor at the Mayfield Fund, will be joining the company as VP of product marketing and operations. Known for helping to turn around AOL’s instant-messaging division, his job now will include helping the company to figure out how to make more money.

Rumors have emerged that Facebook wants to public, and so filling out senior ranks is important. Facebook now says it has 30 million active users. It is reportedly making $30 million annually from $150 in revenue. We’ve heard a big portion of this comes from Microsoft payments for banner ads on the site. Palihapitiya caused controversy earlier this year, when he commented in a French video about a “white male circle of insiders” running Silicon Valley (our coverage here). Facebook also recently hired a new chief financial officer, Mike Sheridan, formerly CFO of video game publisher IGN Entertainment Inc.

MSN search engine market share actually grows — After steady decline, it has grown of late, driven by online games like Chicktionary, Compete reports; analyst Steve Willis has the full explanation:

A good portion of the additional Live searches are coming from the Live Search Club, where you can apparently play games for points which you can redeem for fine Microsoft products. All of the games involve using Live’s search engine - to get the points, you have to search with Live.

Google brings Map mashups to its platform — Tomorrow, Google brings Map mashups of data from external sites like Zvents and ChicagoCrime.org to its own platform, Mashable reports.

Index Ventures and 3i launch Seedcamp in Europe — Details are here. Entrepreneurs apply with their “big ideas” before August 12 and the top 20 will be chosen to spend a week in London with industry professionals (VCs, lawyers, marketers, HR people, etc), and from there, the top 5 winners will be announced and they’ll receive 50,000 euros in funding and continued mentorship to get their businesses started.

Nielsen/NetRatings, a leading online-measurement service, scraps rankings based on page views — Instead, it will begin tracking how long visitors spend on Web sites. The move comes as page views lose their value in expressing a site’s importance. Many sites, such as Friendster, have boosted page views with simple networking features. Others, such as those using online video and new technologies such as Ajax, reduce page views.

AOL releases new test version of myAOL — It offers new personalized tools such as myPage, a personal dashboard offering access to content and applications from AOL and other sites; Mgnet, which lets users find new sites and information based on personal preferences; and Favorites, a feed reader that combines user feeds and bookmarks in one place.

Users of TiVo can order movies from Amazon.com directly from their TVs — Details here.

Intel Corp. invests $218.5 million in virtualization software maker VMware – The investment will give Intel ownership of about 2.5 percent of VMware’s outstanding shares after VMware completes its initial public offering. Details here.

Will the video start-ups ever stop coming? — United Talent Agency and advertising start-up Spot Runner have jointly created a company called 60Frames Entertainment to finance and distribute original professional videos online. 60Frames, of Los Angeles, has raised $3.5 million in funding from investors including Tudor Investment Corp. and the Pilot Group, and says it wants to provide higher quality videos than YouTube. Its videos will run a few minutes and cost “in the thousands, not hundreds of thousands” of dollars to produce, the NYT reports.

Talking of video sites, Revision3, another one, finally gets CEO — Recently departed PC World editor Jim Louderback will become CEO at video site Revision3, replacing interim chief exec, Jay Adelson NewTeeVee’s Liz Gannes reports.

Sequoia Capital, which recently invested in video site, Funny Or Die, now says there’s too much content — Roelof Botha, the Sequoia Capital partner who also invested in YouTube and Joost — video companies that only help to propagate more content — now says there’s so much information out there that it is overwhelming, and so you need humans to help (thus Sequoia has invested in Jason Calacanis’ human-assisted search engine, Mahalo). See video below, conducted by WSJ’s Kara Swisher (RSS readers will have to go to site):