Hangout Lets It All Hang Out, Wants to Become a 3-D, Interactive MySpace

9/8/08Follow @wroush

A Boston startup transposing MySpace-style teen social networking into a 3-D virtual environment is one of the companies making its public debut at this week’s TechCrunch50 conference in San Francisco. Executives from Hangout Industries, which has raised $6 million in venture funding from Polaris Ventures and Highland Capital Partners, went onstage at the conference today to demonstrate their service, Hangout.net, where each user receives a free, private virtual room that can be outfitted with virtual objects bearing real-world brands, such as Skullcandy headphones and Monster Energy drinks.

Hangout is currently in private beta testing, and expects to open to the general public later this fall, according to CEO Pano Anthos. As the name of the service suggests, the rooms are intended to function as impromptu meeting places for young people in the 16-24 age group. Members buy decorations for their spaces using a virtual currency, and designate friends not by linking to their profiles but by handing out the “keys” to their rooms (i.e., permission to enter).

These hangouts aren’t just static spaces—they’re virtual media rooms, with embedded players that link to content from the Web, such as Facebook photo albums, YouTube videos, and songs from music search engine SeeqPod. “On Hangout, teens interact with their friends as they do in the offline world—whether it be watching favorite videos on YouTube, listening to music, sharing Facebook photos, engaging with popular brands and products that they love, playing games or making music, or just chatting ‘in person’,” in the words of a company announcement released today.

Hangout Screen ShotWhile Hangout.net might sound similar on the surface to other online virtual worlds such as Second Life, There, and Google’s widely panned Lively, Anthos argues that it’s very different in scope and intent. “The model is not a world where you go out and explore,” he told Xconomy last week. “It’s about creating your space, expressing who you are physically through the kinds of objects and activities that surround your room, and engaging with your friends.”

It’s also about advertising through branded merchandise. And in that respect as well, Hangout.net is much more similar to MySpace—which offers members a range of brand-driven materials, including badges, background images, songs, videos, with which to personalize their profiles—than it is to other virtual worlds, which typically generate revenue through subscription fees. “Kids hate banner ads—they ignore them,” says Anthos. “Cool brands really love this idea of ‘emergent exposure’….Advertisers can’t wait to put their products in. But at the same time we’re careful to let the kids be the shoppers. This is entirely about an opt-in model where you decide what products, services, and media you want in your space.” For example, members can decorate their walls with a selection of posters from Art.com and Allposters.com, and dress their avatars in T-shirts based on designs from Threadless, a hip online clothes store.

But while all the marketing and branding going on inside Hangout may be reminiscent of MySpace, the new service has one big advantage over its 2-D predecessor: … Next Page »

Wade Roush is a contributing editor at Xconomy. Follow @wroush

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