Microsoft Social Networking Technology Spawns Startup

Apr 26, 2006 (01:04 PM EDT)

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Microsoft Corp. on Wednesday said it has spun out its new social-networking technology to create a startup called Wallop Inc., set to launch later this year.

Wallop, based in Silicon Valley, Calif., is led by entrepreneur Karl Jacob, who has launched three other companies in the last dozen years, including Dimension X, which he sold to Microsoft. Wallop is backed by venture capitalist Bay Partners.

The success of MySpace, recently bought by News Corp. for $580 million, has inspired many people to seek gold in social networking. Recent entries include TagWorld, Imeem and Varsity World.

In a joint release with Microsoft, Wallop was scarce on details of how it expects to differentiate itself in a crowded market, other than saying it has tapped Frog Design Inc. "to conceive a next-generation user interface enabling people to express themselves like never before." Wallop officials were not immediately available for comment.

The company also said the site would depart from the friend-of-a-friend model common to many social networks, using instead a "unique set of algorithms that respond to social interactions to automatically build and maintain a person's social network."

The technology was made available through Microsoft IP Ventures, which was launched in May 2005 in order to more quickly funnel into the marketplace innovations from the company's multi-billion-dollar research and development labs. Financial details of the Wallop deal were not disclosed.