Diller's IAC Buys Zero Degrees
story.news.yahoo.com
Mon Mar 1,12:04 AM ET
By Eric Auchard and Peter Henderson
NEW YORK/LOS ANGELES (Reuters) - InterActiveCorp. (Nasdaq:IACI - news), media mogul Barry Diller's conglomerate of enterprises ranging from online dating to home loans, has agreed to acquire business networking site ZeroDegrees, the company said on Monday.
ZeroDegrees of Hollywood is one of more than a dozen start-ups that have been launched over the past year in the hope of cashing in on the trend popularized by dating site Friendster, which has drawn millions to seek connections via online social networks.
Friendster is the leading example of personal/dating sites, along with Tribe Networks and CraigsList. Last month, Google Inc. introduced Orkut, its own personal referral service.
In contrast, ZeroDegrees focuses on business contacts. Potential rivals include LinkedIn, Contact Networks, Socialtext, Spoke Software, Ryze, Visible Path and Eliyon.
These sites are versions of the concept of "Six Degrees of Separation," the title of a Broadway play and a movie that has become a phrase embedded in the popular culture and refers to the web of connections that tie together seemingly remote people via friends of friends and so on.
"IAC's acquisition of ZeroDegrees will bring more credibility to business networking," said Jas Dhillon, 43, the company's co-founder and chief executive.
Terms of the deal were not disclosed.
A HIT IN HOLLYWOOD
Thanks to its roots in Southern California, ZeroDegrees first caught on with entertainment executives and their counterparts in the defense and aerospace industry, he said. This contrasts with the technology industry focus of many other business networks.
"If you look at the competition, (most) are very heavily focused on Silicon Valley technology companies and the venture capital community," Dhillon said.
Some 218,000 people have signed up since the site for the service was introduced in August 2003. Business people looking to share their address books to make new contacts and executive recruiters seeking new hires are the site's biggest users.
ZeroDegrees hooks into a dozen of the most popular e-mail and address software programs, including Outlook, Lotus Notes, ACT! This integration reduces the fatigue of having to re-enter each contact in one's network, Dhillon said.
Users retain control of their personal information, preventing strangers from using the site as a way to ask for favors, a problem with some similar sites. "Your neighborhood contains only people you know," he said of how the site works.
NETWORKED ADDRESS BOOKS = RELATIONSHIPS
ZeroDegrees joins InterActiveCorp's stable of Internet networking sites such as Match.com for dating and eVite.com for party organizing. IAC also owns citysearch local directories, TicketMaster, Expedia Inc., HotWire and Hotels.com for travelers and home mortgage broker LendingTree.com.
While ZeroDegrees is IAC's first solely business-focused brand, it represents a natural extension of the parent company's travel-related sites, officials said.
The excitement over so-called social software sites has created a mini-replay of the dot-com boom as Silicon Valley venture capitalists have poured tens of millions of dollars into funding the most high-profile of these sites.
There's even talk of IPOs, despite the absence of proven business models for generating sales, and the fact that most sites caution they are still in preliminary testing mode.
Critics complain that relationship software has trouble keeping personal and professional ties distinct and that its features are more likely to end up being incorporated into other programs rather than survive as stand-alone businesses.
Dhillon believes that such relationship services will become a pervasive feature on the Internet.
"They will be a fundamental feature of existing software systems, whether we are talking about enterprise software or Web sites," he said.
Already, major players in the Internet industry are seeking to incorporate features of social networking into their sites, even as visionaries struggle to come up with open standards for sharing contact information across many different sites.
Dhillon says just one or two free-standing business networking sites can survive growing competition in the field.
FROM D.C. TO BANGALORE
The inspiration for ZeroDegrees came to Dhillon while he was working at a Washington, D.C., start-up that was looking to connect to a wider network of business contacts. The company was formed in January 2003 and launched its service by August.
"We wanted to link together the (Microsoft) Outlook databases of the people who cared about our success," he said -- in effect, creating a vast virtual organization of contacts, supporters, expertise and potential deals for the business.
The technology behind ZeroDegrees is supplied by partner ZenSutra Inc. of San Jose, California, the company that enabled ZeroDegrees to get up and running in a matter of months.
ZenSutra built the networking software and a Web plug-in that links into the desktop address books of Microsoft Outlook users with a team of developers at its Bangalore, India, research center, its chief executive, Yogesh Saini, said. (Additional reporting by Narayanan Madhavan in Bangalore and Lisa Baertlein in San Francisco) |
