HOT COMPANY PROFILE: Social network builder SocialGO

By Sarah Vizard

Wed Mar 31 2010, 14:24 PM

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Launched in 2009, SocialGO allows users to create their own social networking site either as a standalone service or integrated into an existing website. The service is currently browser-based and operated from dedicated servers so networks can be accessed from any computer. Company CEO Dominic Wheatley says his site aims to make building white-label social networks easier by enabling users to set up their network from templates without the need for software developers. SocialGO also offers network owners easy ways to generate their own revenue through member billing and has an open account registration API. Main competitor Ning , by comparison, has a closed API which means users must register with Ning before they can join any networks. Content ownership is a key issue, but SocialGO is coming late to the market and faces some stiff competition.

What makes SocialGO different to other social networking builders?

The core difference is that with us you set up a network and you own it. You own the members and you own the data content. If you want to pull that information out and put it on another platform you can do so.

We are also more focused on the professional market and monetisation tools. We want to give our users the option to charge members to be part of their network or for access to certain areas. A lot of our users are small companies and organisations so they should be able to set up shops around the network to sell their product or put up their own ads.

What is SocialGO's business model?

Our revenue generation is purely focused on users subscribing to our service, we have no ad income model. We charge around USD25 a month. Users can try before they buy, but it's a much slimmed-down service. We're old fashioned and think that you create a service and people either buy it or they don't. We believe that if our users create a site, and it's successful and has loads of members, they will gladly pay to get rid of intrusive ads. And if our users have a site which isn't very busy then there is nobody to look at ads so there is no income model from that.

Who are your competitors?

Really it is us and Ning involved in the do-it-yourself social network space. We both have sites where users can tap in, pick up a design and set themselves up in minutes. And we both have similar premium pricing plans. But I think we are more like business-grade Ning. So similar in terms of style of the product, what it does and functionality, but aiming at slightly different markets.

There are other services obviously which will create networks for businesses. But these are bespoke and expensive so we don't really see ourselves as competing with that. Equally services from the likes of Facebook, fan pages and things, you could argue are in the same space. But again I don't think it's quite the same. We want users to be able to put their network on their own site. You can't do that with Facebook.

What's the biggest challenge you currently face?

Simply awareness. We feel we're quite well set up from a technical standpoint and, though it's taken us the best part of three years to get here, we are making money and every month our income goes up so we have a nice steady graph. But awareness is what we need to draw in some bigger brands and increase our user numbers.

What is the hottest trend in digital media right now?

Companies having their own real estate online which they can control and moderate will be very important. What we had two years ago was everyone trying to use MySpace to promote themselves, last year it was all about having a Facebook page. The trouble is that companies were trying to apply social media as a business tool and the users weren't really listening. Alright they followed a fan page but they weren't paying attention to it. What companies need to do is interrupt the conversation, build their own networks with a social purpose and interest, and get people to come to them. That is the next big wave, permission-based marketing, where firms can market to their users directly.

VERDICT

The question of who owns the content on services such as SocialGO is a key battleground and SocialGO appears to be on the right side of it. Ning received huge criticism last year for changing its terms of service so it owned the user data and then taking members from every website that used the Ning software. SocialGO on the other hand allows network holders to own all their own content and move it to different platforms. CEO Wheatley describes his company as "the West, where people are able to come and go as they please" while portraying sites such as Ning as "more Soviet" where all the content belongs to the state not the individual. It's an interesting analogy, and touches on a key issue as social network creation hits the mass market.

However, SocialGO has come very late to the game and is trying to enter a market which is nearing saturation. Market leader Ning already has 41m users and 2m user-built networks. While it is likely that a number of those networks are "empty nests", SocialGo, which has "coming up to 10,000 networks", lags far behind.

If SocialGO wants to convince users to adopt one of its networks it is going to have to prove that not only does it offer better features, but it is worth the move if users already run a network on a rival service. Both will prove difficult to do and so upping its exposure and getting in some big brands will be important, as will adding new features such as mobile access, which Wheatley says the company is currently working on. Plus a business model based purely on subscriptions, while providing a more reliable revenue stream, seems to rule SocialGO out of an entire market of users who won't want to pay, but would put up with ads. While Wheatley may believe that users should pay for something if they want to use it, in reality the online audience is used to getting services for free.

SOCIALGO AT A GLANCE

CEO: Dominic Wheatley

HQ: London

Founded: July 2007

Commercial launch: March 2009

Number of employees: 30

Investors: Veddis Ventures

Funding to date: USD8m

COMPETITORS

> Ning

> Webjam

> KickApps