Finally, a Revenue Model for Social Networking with the Launch of SmallPlanet.net

LOS ANGELES--(BUSINESS WIRE)--March 17, 2004--SmallPlanet.net, inc., www.smallplanet.net, has launched a social networking application that answers the question of how a "Friend of Friend Network" (FOFN) can make money. What's more, the company believes that the patent application it has filed for its business model will give it a significant advantage in this increasingly competitive Internet sector.

With the early popularity of FOFN's like Sixdegrees.com and Friendster, and the entry of major players Microsoft and Google, social networking sites have become the hot topic with venture capitalists and Internet watchers, but the question of how to make money with the application has gone largely unanswered ... until now.

"Strength in Numbers"

Small Planet's answer, like most good answers, is simple: collective bargaining. If you're going to facilitate users' ability to gather together in large interconnected networks, then the next logical step is to help users leverage the power of those networks.

Members vote for what they want discounts on (e.g. car & health insurance, travel packages, cell phone rates, gym memberships). Small Planet then negotiates from carriers and vendors wholesale group rates that its members would otherwise not have access to on their own, and earns a fee only when it saves its customers money.

What AARP provides to retired persons, and USAA to military family members in terms of high value benefits and discounts through group purchasing and collective negotiation, Small Planet extends to the 18-35 market that just as sorely needs better access to health insurance, affordable car insurance, and fair credit card deals. Small Planet is using social networking technology as the vehicle that will bring collective purchasing opportunities to a wider audience, and in so doing is creating the first robust and sustainable FOFN business model for the consumer market.

Early Success

The idea seems to be a popular one; the site has reached well over 1,000 registered members within one week of its March 10th launch. Based on its early success, the company has already begun executing deals with various discounting partners, and hopes to soon provide bargains on all of the products and services voted on or suggested by members, ranging from cheap insurance to discounted rates at local golf courses. As numbers grow, the company plans to enable users to form buying groups for everything from cell phones to digital cameras.

In addition to discounting, Small Planet is building a populist community where its members can share ideas and have more "voice" through a section that encourages group participation in "community outreach" events. The site also promotes Moblogs, a blogging feature where members can share first hand information about news and events with the group by uploading photos and video from their handhelds. Small Planet is an invite only site. In order to build a higher quality network than is possible with open registration, the company has decided that it would be better for each new member to be invited in by an existing one, even if that means lower near term growth rates.

Small Planet was founded by three friends: Diego Reyes and Gabriel Weinert, classmates at UCLA's Anderson Business School, together with CEO Hunter Heaney. Mr. Heaney previously served as Chairman and CEO of Los Angeles based MXG Media, Inc. (a former portfolio company of Barry Diller's USAi/Interactive Corp.), which he founded in 1997. The company has assembled a Board of Directors comprised of executives from various industry leading companies such as United Online (NetZero) and AON Insurance to help execute its strategy.

SmallPlanet.net, inc.
5482 Wilshire Blvd.
Suite 105
Los Angeles, CA 90036
Tel [phone]
Fax [phone]
www.smallplanet.net