Who says consumer websites are dead? Maybe you don’t need the ridiculous traffic of, say, Seattle-based Cheezburger Network (LOLcats) to survive on advertising revenues. Maybe user-generated content around a targeted niche, especially where there are purchasing decisions being made, can work well after all.

That’s the sense I got after talking with Tom Seery, the founder and president of Seattle-based RealSelf. Launched in 2006, RealSelf.com provides information about cosmetic treatments in an online community format that includes user reviews, doctor listings, and expert advice from cosmetic surgeons, dentists, and dermatologists. The treatments in question—a multibillion dollar market worldwide—run the gamut from nose jobs and tummy tucks to orthodontic braces and breast implants.

RealSelf is particularly interesting because it sits at the intersection of a number of fast-growing (but also challenging) areas for startups—social and community review sites, health 2.0, and ad-supported media sites. The company has gained some traction, growing 150 percent year over year in Web traffic; it now gets more than 700,000 unique visitors per month, Seery says. In terms of local startups with a similar strategy for capturing niches of Internet content (but these are not competitors), I’d mention Avvo, TeachStreet, Raveable, Redfin, Urbanspoon, and Zillow.

Like most promising startups, the story of RealSelf began with some important personal and business observations. Seery was a longtime employee of Bellevue, WA-based Expedia (NASDAQ: EXPE), and he saw the competing startup TripAdvisor plug away at hotel reviews and other user-generated ratings until 2004, when IAC (which then owned Expedia) had to buy it. “That was the ‘aha,’” Seery says. He thought, “Where else can we take this empowerment of consumers?”

Around the same time, Seery’s wife was researching a laser cosmetic treatment, and was having a hard time finding trustworthy reviews. So he thought, “Let’s create TripAdvisor for the cosmetic space.” The key adjustment he made was to introduce medical experts to the user community. The challenge there, as with most e-health sites like WebMD and Revolution Health, is that doctors are …Next Page »

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Say you’d like to look up an old friend from high school. You have no idea what happened to him after college, and you can’t find him on Facebook. But you do remember the address of his house down the street from your childhood home. What if there was a Web-based map where you could log on, locate your friend’s old house, and leave a virtual note for him to find?

That’s the scenario that Mark Sherman hopes millions of people will explore at ZoomAtlas, a new social mapping service going public today at O’Reilly Media’s Web 2.0 Expo in New York. Using the site’s tools, you can publicly annotate any location that has some personal meaning to you. That might mean leaving a note for someone, or it might mean reminiscing about the house where you grew up, or a school you attended, or even a restaurant where you had a good meal.

But Sherman, the president, CEO, and main funder of the Cambridge, MA-based startup, thinks finding long-lost acquaintances will be the most compelling use for the site. “There’s nothing on Facebook I’ve seen that allows you to reconnect on the micro level,” he says. “The closest thing you have is groups for school alumni—but that’s not the only place that people want to reconnect from.”

You can think of ZoomAtlas as a cross between Google Maps, Facebook, and Wikipedia, with user-generated missives and memories as the key ingredients that—in theory, at least—will make it more than just another mapping site.

Speaking of Wikipedia, Sherman says Ward Cunningham, the inventor of the first wiki, is a close friend and an advisor to the company. In a short essay posted on the site, Cunningham says ZoomAtlas is “a perfect example” of the collaborative philosophy behind wikis. “We can make an atlas of our world that shows what we know and love, not just what a satellite can see,” Cunningham writes. “We can weave our memories and impressions together using the computer’s ever improving graphics to make a collaborative picture from our eyes and minds and hearts in equal proportion.”

The first thing to try when you visit ZoomAtlas is typing in a specific street address—say, the house where you grew up. You’ll see a satellite image of the neighborhood, with small icons representing the location of each house. Each house icon can be edited in a number of ways: you can move it in case it’s not in the right location on the property, you can give it a different look to correspond to your memory of the place, you can write an article about that address (this is the most Wikipedia-like part), and you can attach short notes for others to find. Right now the maps are 2-D, but in the future, according to Sherman, you’ll be able to go inside houses and annotate individual rooms. “Users are empowered to help detail to the map to the point that every location on Earth, no matter how small, can be defined and have attributes assigned to it,” says Sherman.

But ZoomAtlas is more than just a map-based bulletin board where people can leave notes for long-lost friends, Sherman says. He hopes it will evolve into the locus for any online conversation linked to a place. “It’s a framework on which to allow discussion of locations, whether big or small,” he says. “If there were another Fort Hood incident, God forbid, you could …Next Page »

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It took about a year and a half before I could even begin to understand the I Can Has Cheezburger (or “LOLcats”) phenomenon online. The mundane yet bizarre cat pictures. The misspelled captions. The curious Internet-slang grammar. They were kind of funny, but mostly they were weird—and, at times, even a little annoying.

Yet millions of people flocked to these Web pages, submitting their own photos and captions and commenting on others. The Cheezburger Network, as the company behind it is now called (formerly Pet Holdings), has become a runaway success—an Internet sensation that has spawned a total of 26 humor sites, including FAIL Blog, GraphJam, Engrish Funny, and Emails From Crazy People. The original Cheezburger site hit 1 billion page views (10 billion cat images) earlier this month. And during the first half of 2009, the company raked in seven figures’ worth of revenue from advertising, licensing fees, and sales of merchandise, according to Time magazine.

So what’s its big secret? Why has the Cheezburger Network succeeded where so many other humor sites and blogs continue to toil in obscurity? It took me a while to realize it’s not about luck, or marketing, or the power of certain kinds of humor. There’s some good timing involved, sure, but mostly it’s about the drive and mentality of the company’s leader, Ben Huh.

Huh is often portrayed in the media as a jokester. Photos in articles show him wearing a funny hat or mask, surrounded by stuffed animals, or posing with a cheeseburger. That image is pretty far from the reality, as I understand from reading more about Huh and interviewing him recently. In a Q&A with Advertising Age earlier this week, for instance, Huh emphasized, “I am a business person.” And he shed some very interesting light on his approach to business: “We’ve gotten into situations where we’ve tried to acquire a blog for large sums of money, and they turned us down, and we’ve gone on to compete and we’ve won,” he said. “My final offer is, ‘If you do not do this, we will start a competitive blog, and we will not stop until we win.’”

Clearly, Huh has the killer instinct. He is deeply competitive, but not in an over-the-top way. He could turn out to be the Michael Jordan of consumer Internet startups, though we probably shouldn’t put him in the Hall of Fame just yet. Still, as a promising entrepreneur in his early 30s with a pretty big success already under his belt, his story—and his company’s strategy—is worth a closer look.

Huh first arrived in the Northwest in 2005 to work for Intava, an interactive media startup in Bellevue, WA. Before that, he had graduated from Northwestern University with a degree in journalism during the dot-com bubble. “They were handing out bonuses to college grads because we’d used the Internet once,” he jokes. Huh worked for a number of startups in the Chicago area, including his own Web analytics firm. “I made all the mistakes they say you’ll make,” he says. “I raised too little money, and spent all my time fundraising and not making a product for the market.”

By the time he landed in Seattle, Huh had made it a priority to always work for a company’s CEO, or at least have a dotted-line connection to them, in any job he took. “That was going to teach me more about running a company,” he says. “This is for my career, not for [any particular] job.” Huh had also learned from his previous startups to have a “huge focus on staying profitable.”

In 2007, he came across the I Can Has Cheezburger site, which had been started by a …Next Page »

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Raveable is a year-old Seattle-area startup that launched its hotel review summarization website in May. If there were a Raveable entry for Raveable itself, here’s what it might say:

Ranked 116 out of 340 tech startup websites in Seattle.

The good: Team is ambitious and knowledgeable; large market; useful technology; fun interface; customer focused; strong word of mouth.

The bad: Relatively new; pre-revenue company.

Best kept secret: Gaining attention from angel investors and VCs.

The idea of Raveable is to help leisure travelers quickly make sense of all the user reviews out there on the Web, and choose a hotel that’s right for them. So the company aggregates reviews from sites like TravelPost (Kayak), MyTravelGuide (Priceline), CitySearch, Yahoo Travel, and VirtualTourist, and provides a bullet-point analysis of the pros and cons of each hotel—for 55,000 establishments and counting in the U.S.

The company was founded by Philip Vaughn and Rafik Robeal, former Microsoft veterans with expertise in database applications, data synchronization, and mobile social networking. Raveable grew out of difficulties they’d each had in booking hotels quickly; they found they were sorting through dozens of reviews on multiple sites, without having a top-down view of how various hotels stack up against each other.

“We want to make it really easy to make a decision,” Vaughn says. “We were really frustrated by ‘Everything is 3.5 stars, everything is above average, everything is good.’”

The technology behind their approach is semantic analysis of text—an area that’s been in research for decades, but is increasingly being applied to Web search and corporate software. The goal is for the software to understand the meaning of sentences in user reviews—including the topic, the context, and the sentiment. So if reviews say the rooms are great, beds are comfortable, or parking is expensive, that’s pretty straightforward. But if they say the service could be faster, rooms get cold, the view is sick, or the place is in good need of repairs, say, the software relies on statistical models (trained and updated by the founders) to ascertain whether the sentiment is positive or negative.

Vaughn gives a sense of historical perspective, pointing out that Raveable fits into the trend …Next Page »

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It was a huge week for Hunch, the New York-based startup that’s experimenting with a new approach to answering life’s big and little questions—from “Which savings account should I use?” to “Which science fiction author would I like?” After more than two months in invitation-only preview mode, the site threw open its doors to the public on Monday, and doubled its user base in a single day to some 80,000 registered users.

An excited Caterina Fake, Hunch’s co-founder and chief product officer, told me, “There’s been a ton, a ton, a ton of activity” on Hunch since the public launch—including an unexpected number of users who are contributing to Hunch’s signature collection of questions or “topics.” As I explained in a column on Hunch back in April, each topic steers users toward concrete results after asking 10 or fewer multiple-choice questions. Designing topics—which take the form of decision trees, with each answer leading to a different set of possible outcomes—is fairly challenging, which is why Fake is pleasantly surprised to see as many as 20 percent of visitors trying their hands at it.

Fake, who’s famous as the co-founder of the photo-sharing service Flickr, calls Hunch a “collective knowledge system.” She thinks the high early participation rates can be attributed at least in part to the fact that audiences have been primed by similar online collections of user-generated advice and information, such as Yahoo Answers and Wikipedia.

But my bet is that Hunch is also tapping into something deeper—the fact that there are a lot of people who love giving advice. I’m talking about the congenitally opinionated; the people who, based on the scantiest information, seem to be able to supply definitive recommendations about where their acquaintances should shop or how they should dress or who they should marry. In other lives, these people might have been therapists, advice columnists, or astrologers—but now they can become topic authors on Hunch.

Actually, I’m being a bit tongue in cheek—in reality, as you can see from visiting Hunch and looking at the profiles of contributors, the service is attracting people for all sorts of different reasons. For now, according to Fake, the company isn’t too focused on making money—its staff of 10 is working mainly to make sure that it’s easy to build topics, and that users find useful answers.

While Hunch is based in New York, it’s practically an outpost of Boston, considering that General Catalyst Partners of Cambridge supplied most of its $2 million Series A funding. New York’s Bessemer Venture Partners, which has a Boston office, also participated. Then there’s the fact, in Fake’s words, that “We’re pretty much an MIT shop.” Co-founders Tom Pinckney and Matt Gattis, product designer Hugo Liu, and software engineer Peter Coles all have degrees from MIT. CEO and co-founder Chris Dixon and software engineer Will Gaybrick are from Harvard, which is close enough. And several of the Hunch principals worked together at SiteAdvisor, a Boston-based anti-spyware company acquired by McAfee in 2006. “I’m the only West Coasty type,” Fake says. [Correction 9:20 a.m. June 18, 2009: Polaris Venture Partners is not a Hunch funder, as this paragraph previously stated.]

I spoke at length with Fake on Tuesday. Here’s a condensed version of our conversation.

Xconomy: What’s the activity been like at Hunch this week?

Caterina Fake: Yesterday was obviously a huge day, because of the launch. We got a ton more contributions. We launched with 500 topics, and by the end of the preview period we had 2,500, and I’m going to venture a guess that we had roughly a bajillion added yesterday. We had roughly 40,000 members at the end of the trial period and that roughly doubled in one day yesterday.

X: What unexpected lessons have popped up since you opened up Hunch for preview in March?

CF: The main thing is that we didn’t anticipate we would have as many contributions as we got. That was huge, actually. We weren’t quite ready for the influx of topics, questions, and results. We had 20 percent of our users during the preview period turn out to be contributors. Usually, whenever you build a social media or collective knowledge system like this, like a Yelp or a Wikipedia or a Flickr, you get a different percentage of contributors, and our estimate was that less than 5 percent of Hunch users would become contributors, because [contributing] is fairly complex. It’s a different idea. And when I say 20 percent, I mean that 20 percent of people are contributing topics and questions, which is just a crazy number.

X: What do you think you’re doing with Hunch that draws people in and get them contributing?

CF: I think we’ve hit on something that is at large on the Internet today. We were well set up for this by previous sites such as Yahoo Answers and Wikipedia and the quizzes on Facebook. They’ve all set us up well for people understanding what we’re doing and accepting the idea that collective knowledge systems can be beneficial.

X: Do you think your 20 percent contribution rate will continue now that you’ve opened up Hunch to everyone?

CF: From my experience with Flickr and other products I’ve worked on, including Yahoo Answers, it tends to diminish over time. The contributors at the outset tend to be early adopters, people who …Next Page »

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Amazon.com wants your brain. Well, actually it wants your creative ideas for a television advertisement. The “Your Amazon Ad Contest” announced yesterday is giving customers of the Seattle, WA-based internet retail giant a chance to send in their own ads for the website. Two winners, one picked by Amazon and one voted on by people on the site, will win $10,000 in Amazon.com gift cards each. The ads will be shown in a to-be-announced movie festival and may end up on national television.

“User-generated content is the hallmark of Amazon from the very start,” said Steven Shure, the company’s vice president of global marketing, in an interview. He says he considers the contest an expansion of other opportunities customers have to add to the site—if a bit more formal than book reviews. “We believe customers know and care about Amazon,” he says.

It’s unclear how many and what quality of entries Amazon will receive by the July 17 deadline, which is why there is no guarantee that the ads will appear on TV. “We’re not going to air bad ads,” Shure says. If the same ad is picked by both the Amazon jury and the audience vote, its creator will receive the full $20,000—nothing to sneeze at, between Amazon’s constantly growing range of goods and the current economic climate. The prize money was picked as an “amount that would be meaningful to an individual,” Shure says.

Five finalists will be announced on August 24, and people will be able to vote for the audience prize winner until September 6, with the final winners revealed on September 21. (To submit an idea, go to www.amazon.com/yaac.)

Depending on the success of this contest, it may be repeated, Shure says. It also may be adapted for foreign markets, as a global outlook is the overall focus of Amazon’s marketing, he says. “If something works, we’ll keep trying it.”

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Seattle social-publishing startup Wetpaint announced it has formed a partnership with MSN Entertainment, a leading online network, to create more than two dozen fan sites that will start rolling out this quarter. Financial terms of the deal were not given. MSN Entertainment will use Wetpaint’s software to power social sites where fans can write content, share interests, and meet one another.

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This week’s column comes partly in the form of a digital cartoon. Click on the play button below to watch it. (Or if you’re reading this story via an RSS feed or e-mail newsletter, click this link to view the video—then come back here).

Clever, eh? Of course, it’s just fiction. I still have a job here at Xconomy—as far as I know. But if I ever lose it, maybe I’ll hitchhike to Montreal and apply for a position at Xtranormal, the startup that created the Web-based movie maker I used to create the video.

Xtranormal, which is funded by Cambridge’s Fairhaven Capital, was founded in 2006 and emerged from stealth mode about a year ago at the Demo 08 conference in San Diego. (You can watch vice president Paul Nightingale’s six-minute Demo presentation here). The basic idea—automated synchronization of synthesized speech with animated, 3-D avatars—has been around since the early 2000s. If you don’t remember the green-haired virtual newscaster Ananova, here’s a link to some archival video. But Xtranormal’s innovation has been to put the same technology into the hands of average Web users—letting them produce and direct their own little 3-D movies.

It’s a great idea that strikes the same chord as some other new consumer tools for creating and remixing digital media—Animoto, which assembles high-energy animated slide shows with musical backgrounds from your digital photos, being one of my current favorites. Xtranormal’s easy-to-use toolkit of commands and its endearing cartoon people give it the feel of a big Lego set for adults. I made the clip above in an hour or two just by choosing a backdrop, a couple of characters, and some basic camera angles and gestures from Xtranormal’s large menu of options, then writing some dialogue. The script doubles as an interactive storyboard; Xtranormal has developed a clever drag-and-drop interface for inserting pauses, facial expressions, and camera angle changes.

As Xtranormal puts it, “If you can type, you can make movies.” And there are people using Xtranormal in some pretty entertaining ways—for examples, check out Deadpan Inc., Howard and Leslie, and Rejected Jokes. To quote website Lifehacker, it’s “a seriously addictive sandbox for crafting miniature dramas, comedies, or whatever you can tell your little actors to do.”

Although Nightingale talked in his demo about using the tool to build business presentations or daily Web talk shows, I’m not convinced that the service, at least in its current form, has any serious business, educational, or media applications. Those may be coming down the road, as the company gives users access to tools for building customized avatars and laying in their own voice tracks rather than relying on the software’s speech synthesizer.

For now, Xtranormal is simply a heckuva lot of fun, which is enough for me. Better yet, it’s free, at least for now—though there are indications that this won’t last forever, and that Xtranormal plans eventually to sell credits that users can apply toward publishing movies.

Xtranormal’s About page calls the democratization of movie-making “a massive business opportunity,” and Nightingale talked at Demo about additional revenue possibilities for the company, such as interactive marketing—think exclusive worlds where content owners (say, Pepsi or Honda or Universal Studios) give visitors digitized movie characters or branded props from which to build their own movies.

But apparently, these types of marketing deals aren’t materializing quite fast enough. According to this report in the Vancouver, BC-based blog TechVibes, the company was forced to lay off 36 people, or about half of its staff, back in November. There have also been complaints from users about performance issues, including long waits for Xtranormal’s servers to show their previews and finished movies (though I didn’t experience that problem myself). And the downloadable version of the Xtranormal movie generator promised by Nightingtale last January is, so far, nowhere to be seen.

I hope the company gets through its current rough patch, because it’s developed a fun and intuitive tool that, with a few more features, could provide the palette for a new generation of home movies by creative amateurs. Given the graphics-processing power of today’s home computers, you shouldn’t have to be CGI professional or machinima hacker to produce nice-looking animations.

Of course, I’m not about to put down my writer’s pen. At least, not until an avatar pries it out of my cold, dead fingers.

(Addendum, 1/19/09: Talk about coincidences. Last night somebody from Xtranormal left the following comment over on the YouTube page for my Richard & Simon video: “Great stuff. Did you know that Simon & Richard are the product designers/managers for Xtranormal? Nuts. Nice write-up too. We are going through a rough patch, but we’re going to pull out of it and it’s gonna be FUN.”)

For a full list of my columns, check out the World Wide Wade Archive. You can also subscribe to the column via RSS or e-mail.

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It’s not just Facebook, MySpace, and Wikipedia anymore. A large number of social websites and wikis have become major players on the Web. Today’s launch of the Seattle-based cooking site Foodista.com is the latest example. But the top social sites of the year were dedicated to TV shows, social activism, gaming, smartphones, and education—in that order.

That’s according to a report out today from Seattle-based social publishing startup Wetpaint. Wetpaint compiled its stats based on the traffic and amount of user-generated content across the 1.2 million-odd social sites it hosts. The company has partnerships with major brands like Dell, HP, The Discovery Channel, Fox, Showtime, and T-Mobile, and those sites drive a fair bit of traffic.

You can read the report for the details, but here are the top category winners from the Wetpaint network:

—TV fansite: True Blood
—Activism: Join the Impact
—Gaming: Last Chaos
—Smartphone: T-Mobile Dash
—Just plain weird: Warrior Cats

“I am always fascinated by the topics that rocket to popularity in any given year,” said Ben Elowitz, co-founder and CEO of Wetpaint. (With the popularity of other sites like Dude Boobs and Chuck Norris Jokes, that’s putting it mildly indeed.)

No predictions for 2009 were given, but I’m guessing that TV and gaming sites won’t suffer too much in the recession…

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I didn’t think it was possible for a popular website like Urbanspoon to fly below the radar. But it has—at least for the past week. The two-year old Seattle startup, which provides local restaurant reviews and has more than a million users of its iPhone application every month, quietly unveiled new sites in every city across the country on Thanksgiving Day.

Over a choux pastry and latte at Le Fournil on Lake Union, Urbanspoon co-founder Ethan Lowry (who opted for a savory filled croissant) told me about the strategy. The launch was supposed to be low-key, so as to get feedback on the sites and improve them for greater consumption. The sites went live at midnight on Thankgiving morning, when things would be quiet. “We thought we’d kick the tires, and things would be calmer. Traffic always falls off on holidays, especially Thanksgiving,” Lowry says. “That turns out to be true on PCs, but not on iPhones. Thanksgiving was a huge day on the iPhone.”

At the same time, Urbanspoon added a feature whereby iPhone users can send in corrections to restaurant info like addresses, phone numbers, and dollar amounts. “Typically, we get a few hundred suggestions a day [on PCs],” Lowry says. “We come back from the long weekend, and there were 6,000 corrections.” The Urbanspoon team—all three of them, plus a few contractors—are still digging out.

It’s all part of a major expansion I wanted to ask Lowry about—how to manage the company’s growth, how to scale up, and so forth. But let me back up for a minute. Urbanspoon was in 71 major cities before—including food meccas like San Francisco, New York, and of course Seattle—and now it’s effectively everywhere in the U.S. (There’s even a site for my hometown of Urbana, IL, which convinced me it’s everywhere—Lowry suggested it should be called “Urbanaspoon” there.) The local sites give a combination of professional reviews and user-generated content, as well as restaurant information and an aggregate score, the percentage of people who like a given joint.

For the first 71 cities, Lowry says, “Our concept was to tap into existing content providers—critics, bloggers, users—and give them a reason to want to play in our world, but ourselves not have to establish field offices in every city. We’ve managed to keep the tools ahead of the need.” Those tools include a sophisticated software “indexer” that pulls in reviews from different sources and creates a rich database for each city.

But a different approach was needed for the latest expansion, because of the sheer …Next Page »

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Sometimes the best stories are the hardest to tell. This isn’t one of them. I’m not quite sure where to begin, but here goes. There is a startup in South Seattle called Bacon Salt. Maybe you’ve heard of it, maybe you haven’t. But the name says it all: Bacon Salt is a zero-calorie, vegetarian, kosher seasoning that makes everything taste like bacon.

Why is Xconomy writing about this? OK, a crucial aspect is how the company’s founders have used social media and the Internet to promote their product and grow their business. But I’m getting ahead of myself. Mostly it’s just a good tale of entrepreneurship. And the company has just released an interesting new product, which I’ll get to shortly.

The story goes back to January 2007, when Dave Lefkow and Justin Esch were working at Jobster.com, the Seattle-based office networking firm. A company speaking tour took them to Miami Beach, Florida. Late one night, at 1 or 2 a.m., they were having drinks at Wet Willie’s on Ocean Drive. Esch brought up the concept of Bacon Salt, which had occurred to him while he was attending a kosher wedding. Lefkow thought the product had to exist already. They Googled around on a BlackBerry and found nothing. So they bought the domain name right there and then.

For the next few months, they met after work to kick around ideas for getting the business started. They had to learn everything about “how to take a food product to market,” says Lefkow. How to get manufactured, how much material you need, how to package it, how to label it, how to get a product code, and so forth. At a wine and food expo, they met a shadowy advisor (who shall remain anonymous) who walked them through the ins and outs of the food industry. What they still needed was money to get started.

In May 2007, Lefkow won $5,000 from America’s Funniest Home Videos, thanks to his 3-year-old son hitting him in the face with a T-ball. That was their seed funding round. “A pretty standard formula. That’s Harvard Business School stuff there,” says Esch. At around the same time, Lefkow and Esch both left Jobster to focus on their new venture. They began trying to make Bacon Salt themselves, by pouring bacon fat over salt crystals. “It was totally disgusting,” says Esch.

So, with help from friends and family, they hooked up with food scientists and chefs and developed the taste profile they wanted to synthesize. It was more art than science. “The primary thing was taste,” says Lefkow. “We wanted the most delicious product possible.” (You might wonder why anyone would want to make everything taste like bacon, but that’s beside the point, as you’ll soon see.)

Lefkow and Esch launched Bacon Salt in July 2007, and with their Web expertise, immediately tapped into the social networking space to promote their product. They put up profiles on MySpace and Facebook, set up discussion groups, and friended all the people who said “I love bacon” on their own profiles—an astounding 37,000 on MySpace alone. They reached out to bacon bloggers and sent them samples of Bacon Salt to help spread the buzz. They’ve since gone on Twitter. “There’s a huge bacon subculture,” says Esch. “There’s love, and there’s fanaticism.”

And their product started selling. At last count, they’ve sold 600,000 jars of Bacon Salt to people in 50 countries and all 50 states. It is in 8,000 grocery stores across the U.S. They’ve done national TV and radio interviews, and they’re in the December issue of Maxim. Their 2007 revenue was …Next Page »

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Seattle-based Voyager Capital has been investing pretty aggressively in software and digital media startups up and down the West Coast, as we reported back in September. Today, one of its portfolio companies, Mountain View, CA-based Keystream, emerged from stealth mode to announce its new product, management team, and investors. Voyager Capital led a funding round for Keystream that closed earlier this year—the companies did not disclose the exact timing or amount—and angel investors participated as well.

Keystream has developed video-analysis software that automatically inserts ads into online video content. It works by identifying subject matter on the screen and then placing ads in selected blank spaces—the key is how to do that without getting in the way of the video and annoying viewers. The company was founded in 2004 by Schuyler Cullen and Edward Ratner, who have filed eight patents on the technology. Cullen is the chief executive, while Ratner is president of research and development; they are joined by vice president of business development John Varney, who was previously chief technology officer at the BBC.

Enrique Godreau, a managing director at Voyager Capital (and a hardcore tech guy himself), has joined Keystream’s board of advisors. In a statement, he said the company’s technology “is extremely unique and its application to intuitive online ad insertion pioneers an innovative and lucrative digital marketing solution.”

For now, it appears Keystream is targeting both advertisers and publishers. It will be interesting to see how many sites adopt this kind of ad technology, and whether viewers will put up with it.

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Mix one cup of Wikipedia with one cup of Google Maps, add a generous dollop of MIT-bred geekdom, and bake for about 14 months. Serves 600,000.

The confection in question is Povo.com, a user-editable online community directory that debuted in Boston last week. A project of Boston-based Arts Alliance Labs, a combination venture capital firm and technology platform company led by MIT Media Lab alum Mex Metral, Povo is essentially a giant, geographically organized blank slate: a template beckoning Boston residents to upload information, reviews, photos, and other content, block by city block.

It’s far from the first user-driven directory of geographically organized local information; other examples include Outside.in, Platial, and Wikimapia. Wikipedia itself has extensive user-generated and user-edited listings on places of interest (including a thorough article on Boston), and there are several services that make it easier to browse Wikipedia’s content by location, including Placeopedia and a new iPhone application called GeoPedia.

But Povo (the name is Portuguese for “people” or “folk”) is more stylish and inviting than a typical Wikipedia-style wiki. People who add information to Povo are recognized for their contributions on their profile pages, which could help encourage Bostonians to pitch in the free labor required to build the directory. (As with most user-generated sites, users aren’t paid for their material.) The site also has some unique features that may appeal to power users, including strangely beautiful “heat maps” that show the greatest concentrations of local resources such as brunch places or clubs with live music, and a simple Ruby-like scripting language that allows users to modify the functionality of the pages they create. And all of the site’s content is available under a Creative Commons license—meaning that heat maps and anything else you or others create on Povo can be embedded in outside blogs or other non-commercial sites.

Metral says the idea for Povo was born when his colleague at Arts Alliance Labs, Hasty Granbery, was walking down a street in San Francisco looking for a dry cleaner that could clean a suit in an hour. “That’s not something you can find in a typical local search,” says Metral. “You might find a dry cleaner in the same zip code, but not something two blocks away. And the search results won’t have details about whether they can do it in an hour.” But that’s exactly the type of detail residents are likely to possess—and if Metral and Granbery can get them to feed it into Povo, it could eventually become much richer than a typical local search site such as Yahoo Local. “The big differentiator over time is going to be the user-generated content and functionality” Metral says.

Metral has a bit of experience with the wisdom of crowds: in 1996, with Media Lab professor (and Xconomist) Pattie Maes, he co-founded Firefly Network, a pioneer in the area of collaborative filtering algorithms that matched people with others with similar tastes and directed them to music content they might like. In a $40 million deal just two years later, Firefly became part of Microsoft, where the technology evolved into Microsoft Passport. Metral went on to become CTO at PeoplePC, which bundled brand-name PCs with dialup Internet service for a $24.95 monthly payment; Earthlink bought PeoplePC in 2002 for about $10 million.

Arts Alliance, Metral’s current gig, funds an electric range of interactive media startups. It was an investor in Spinner (now part of AOL) and Atom Entertainment (now part of Viacom), and its current portfolio includes viral TV clip service BlinkBox, European DVD rental service LOVEFiLM, and mobile games and video distributor Player X. Povo is the first platform the company has decided to develop on its own.

Metral and Granbery have seeded the site with information from sources such as Boston city park directories and Starbucks’ online store finder. But in the end, Metral says, the site will only become useful if …Next Page »

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Cambridge, MA-based FlipKey, a directory of vacation rental unit listings and reviews, flipped the on switch today. The company, which is headed by two of the founders of Boston’s Compete, emerged from stealth mode at a Web Innovators Group meeting last November. The basic concept is to help vacationers locate rental properties in their target geographies and price ranges, and to provide reviews written by former guests at those properties. “A lack of information and consumer confidence often inhibits vacationers from selecting vacation rentals,” the company said in an announcement today. “FlipKey was created specifically to bridge this gap.”

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A 2001 New Yorker essay entitled “Absolute PowerPoint” contained the stunning claim that over 30 million PowerPoint presentations were being given every day. The article attributed this statistic to Microsoft; it did not say how the company gathered the data. But whatever the actual prevalence of PowerPoint in 2001, it’s surely even greater now, given that many more people own laptops today than seven years ago. In fact, PowerPoint has become such a universal medium that it wouldn’t be surprising to see great fields of PowerPoint presentations blooming on the Web, alongside other forms of user-generated content.

And that’s just what is happening. BrainShark of Waltham, MA, today officially opened the world’s first repository for ready-made business presentations, complete with audio narration. Some of the presentations are free; others cost $15 to $50. It’s like YouTube meets Amazon for PowerPoint.

BrainShark, a nine-year-old, 110-employee company that’s raised a total of $23 million in funding from the likes of Flagship Ventures, Ticonderoga Capital, SI Ventures, and Citizens Capital, is known mainly for software that allows users (mainly executives at the large companies that subscribe to the service) to upload PowerPoint presentations to a Web-based authoring tool, then record an audio track over the telephone. Customers or employees can then access the finished presentations online as part of marketing, training, or “e-learning” campaigns. Over 700 companies use the service, including more than a third of the Fortune 100, according to BrainShark CEO Joe Gustafson.

But the company recently realized that there might be demand for a PowerPoint exchange—somewhere a company’s HR executives could go, for example, to find a pre-made but customizable presentation on workplace sexual harassment reporting policies, rather than having to build one from scratch. PowerPoint has long included an “AutoContent Wizard” that provides templates for specific situations such as “Employee Orientation,” “Project Post-Mortem,” and even “Communicating Bad News.” And the New Yorker exaggerated only slightly in saying that these templates are “so close to finished presentations you barely need to do more than add your company logo.” But not even the wizards at Microsoft can think of every business scenario in advance. Enough of the business world’s collective wisdom is now embedded in PowerPoint files (and perhaps nowhere else) that BrainShark believes the time has come for a rich marketplace for presentations.

“A couple of things happened recently that caused us to go to market with a content network,” says Gustafson. “The first is we are just a big enough company now to expand into an additional line of business. Also, in the marketplace you’ve got a confluence of things: a greater interest in multimedia generated by YouTube; a greater interest in user-generated content with blogging and Wikipedia; and people are more and more comfortable accessing information online. And over the years we’ve had customers come to us and say, ‘We bought BrainShark to create our own proprietary content, but we’re often creating content that we could probably buy off the shelves, as long as we could customize 10 or 20 percent of it to fit our needs.’ So we think the whole e-learning market is ripe for being turned on its head.”

Here’s how it works—starting with BrainShark’s existing presentation-authoring process, as explained by Gustafson: “You give us your PowerPoint file and it’s automatically uploaded to our secure servers. We process it to our format, and then we come back to your screen with a telephone number that you dial and enter a secure password. The automated attendant says, ‘To start recording, press this key,’ and from then on your phone is in control over your PC browser. You see your first slide in front of you. Just like with voice mail, you add some dialogue to that slide. Then you press a key on go on to Slide 2. You can stop, listen, edit, delete, and re-record. When you hang up the phone, we process it, put the audio file together with the visuals, and combine it into a link to a regular URL. Anyone who goes to that URL can play back that content on any system from any browser.”

What’s new is the BrainShark Content Network. Say you’re an expert on Sarbanes-Oxley reporting regulations. After registering with BrainShark as an author (which involves some pre-screening, meaning the network isn’t strictly equivalent to YouTube and other user-generated content sites), you can …Next Page »

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What makes YouTube and other sites that aggregate user-generated content such a brilliant business proposition? It’s that users upload millions of videos, photos, and other content every week, creating mountains of inventory that the sites can sell to advertisers—and the sites don’t have to pay a rupee for any of it.

But there’s a company getting started in Boston that should shake YouTube and its ilk to their shoes. Traackr wants to give the generators of all this user-generated content a way to monitor how influential, and therefore how valuable, their content is becoming—and, someday, to make some money on it.

“We think there’s a market for influence, but it has not emerged yet because there is no currency for it; no one knows what it’s worth,” explains Traackr’s co-founder, Pierre-Loïc Assayag. “If you happen to be one of the power users on YouTube and Google is making tons of money on you through contextual advertising, or if you’re a book reviewer on Amazon and your review inspires 10,000 people to buy a particular book, you should be getting a cut. At Traackr, we are going to tell you that you are worth x amount compared to other users—and you can use that as a negotiating angle.”

Right now, all you’re likely to get if go knocking on YouTube’s door at the Googleplex in Mountain View and ask for a cut of their profits on your talking-cat video is a good laugh. But Traackr is just getting started.

The public beta version of the site launched two weeks ago, and right now, about all you can do is create a personal account and link it to your existing video-sharing accounts on YouTube, Revver, or Dailymotion; your photo-sharing account at Flickr; your music profile at Last.fm; or your blogs at Myspace or Vox. Once you’ve done that, Traackr goes to those sites and sucks in all the information it can about the way your content is being used. For example, it will tell you how many times each of your photos on Flickr has been viewed.

Traackr then distills all this information into several types of scores, two of which—”popularity” and “buzz”—are currently displayed on the site, in percentile form. “Popularity is how many people see your stuff; buzz is how many reactions you get to what you publish,” says Assayag. If your popularity rating is 48 (which is where mine settled after I linked my Traackr account to my Flickr photostream), that means your stuff gets more page views than 48 percent of other Traackr users. Or fewer pages views than 52 percent, depending on whether you’re a glass-half-full or glass-half-empty person.

Assayag says the company is working on rolling out two additional measures—”reach,” which a measure of how often your content is passed on, and “perceived quality,” which is a measure of, well, quality. The four quantities together will give Traackr users a way to measure their own success on the Web—and, Assayag hopes, a feedback mechanism that they can use to increase that success.

“Many users are just not aware of what makes them successful,” he says. “They know they are good at something, but they don’t know why. When you show them ways to measure their popularity or buzz, they learn very fast. Maybe they are not publishing on the right sites. Maybe they are not adding the right tags. If they change something and they see that any of these actions are changing their score, they’ll make a correlation very fast.” For instance, publishing too many photos on Flickr can actually reduce your Traackr score; if you’ve posted 100 really good pictures but they’re lost among 1,500 others, you might well have a lower popularity score than someone who posted just 50 exquisite shots.

Traackr’s own business model, under the current plan, is to sell access to Traackr data to marketers who want to reach out to the most influential Web personalities in various subject areas. But that plan could change. Traackr is actually just one of the projects underway at a Boston-based consulting firm called Ignesis that Assayag founded four years ago to explore better ways of building disruptive technologies into profitable businesses. In new markets, says Assayag, “pretty much anything you’ve learned form past experience is hard to re-use reliably, so all you can do is iterate as fast as you can and as cheaply as you can.”

Traackr is Ignesis’s first-born child, and Assayag is definitely applying the fast-iteration principle—basically launching a new version of the site every six weeks. “In each six-week cycle we take our most critical hypothesis for this business and bang on it to see whether we can prove it or disprove it,” he says. “Based on the answer that we get, the next generation [of the business] will look a little different.”

Previous, non-public versions of Traackr were mainly tests of the underlying technology—that is, whether its programmers could successfully pull data from other media-sharing sites. The hypothesis Assayag is testing right now: whether Traackr might be a useful tool for marketers hoping to reach niche audiences through Web celebrities such as top bloggers, videographers, photographers, and book and music reviewers.

For example, Traackr is working with an auto insurance company that’s trying to reach out to teenagers who are getting their drivers’ licenses for the first time. Market research shows (somewhat frighteningly) that these teens’ opinions about various insurance companies is as important as their parents’ opinions in the final selection. The insurance company “wants to know who they should talk to; who are the pundits, the influencers in that demographic,” says Assayag. The company’s eventual goal is to create an online tool that marketers could use to organize their own direct-influence campaigns, and that would give individual Traackr users the ability to decide whether or not they want to be contacted directly by a corporation or a business.

But selling direct access is just one of many ways that Traackr could create the “influence currency” Assayag speaks about. “Once we start exposing all this data, what appear to be worlds that do not overlap—the world of free content and the corporate world—could actually start to meet someplace,” he says. “Whether it’s through direct advertising, contextual advertising, or direct contact, we don’t really know yet.”

One thing’s for sure: What you see at Traackr today is likely to evolve drastically over the next few six-week cycles. “It’s the foundation of our house,” Assayag says. “We don’t know yet if it’s going to be a three-story or a high-rise.”

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Mzinga, the Burlington, MA, online community management company we profiled in December, announced today that it has raised $32.5 million in new venture financing and acquired Littleton, MA-based Prospero. Like Mzinga, Prospero sells online community applications such as message boards, blogs, wikis, polls, and chat interfaces that are used by a growing number of companies to improve interactions with customers.

Mzinga is itself the product of a recent merger between community management company Shared Insights and knowledge management company Knowledge Planet; most of the company’s leadership team came from a third company, Intranets.com. The 150-employee firm says that more than 125 enterprise customers are using its software for external customer communities, internal employee communities, and online employee training, including big names such as ABC, AOL, ESPN, Chevron, and Johnson & Johnson.

The funding round was led by W Capital Partners of New York, with participation by institutional investors Bluecrest Capital Finance, LP, GE Equity, and Knowledge Industries. Members of Mzinga’s management team also pitched in. In a press release, Mzinga (the name is Swahili for “beehive”) said it would use the new funding to “accelerate product development in response to increased demand, expand into new market segments, and increase sales and marketing investments.”

And it’s using an unspecified portion of the funding round to buy Prospero, a former competitor whose “CommunityCM” software-as-a-service platform lets companies integrate user-generated content such as message board comments and ratings and reviews into their main websites. (For an example of Prospero’s platform in action, see BusinessWeek’s user forums.) DelphiForums, which hosts hundreds of free message boards on general topics, and Talk City, a collection of Java-driven chat rooms, are also part of Prospero.

While there will undoubtedly be some synergies between the two companies’ existing services, there’s also a lot of overlap, which makes the Prospero acquisition look like a pretty cut-and-dried case of industry consolidation, with one larger and better-funded company swallowing up a competitor. In its release, Mzinga said the acquisition establishes it as “the clear leader in business social media over an array of niche providers.”

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Many bands have hours of video documenting their performances and their touring adventures, but their options for getting this material out to fans aren’t very broad. There’s MTV on the professional end and MySpace on the popular end, and not much in between. But now Hobnox, a German company that has set up its U.S. headquarters in Waltham, MA, is offering a third alternative: an online network for “prosumer”-produced content about indie musicians.

“Many musicians who are creating great content don’t have a distribution platform for it,” says David Wu, president of Hobnox, which launched its first U.S. content channel, called Mi145, in October. “We are providing a way for them to reach out to their fan base, broadcast high-quality video and audio, and create a community around that.”

Hobnox is attempting to make its first big splash with two series of video documentaries on Mi145, one about the 1967 American debut of electric guitar legend Jimi Hendrix and the other on Boston-based ska-punk band The Mighty Mighty Bosstones, which is reuniting this month after a five-year hiatus. Most of this content is professionally produced, but Hobnox execs say that they expect to introduce tools for users to create and upload their own videsos by mid-2008.

“The younger bands, they are very used to this do-it-yourself culture, and they are pretty much filming everything about themselves,” says Jim Fell, Hobnox’s vice president of design and strategy. “But they haven’t really had distribution platforms that support that. MySpace and some of the other social-networking forums have allowed them to express themselves, but not on a professional level. We are looking to create a grassroots platform that can serve the needs of all of these artists. We’re leading with Jimi Hendrix and some professional content to show what can be done, but it works for more underground media producers, too.”

The Hendrix documentary, called “American Landing,” chronicles Hendrix’s first American performance at the Monterey Jazz Festival in 1967, after he had already achieved notoriety in Europe. The documentary is rich in archival concert film and interviews, and is organized in a format Hobnox calls a “Hypershow,” meaning that viewers can stop the main narrative at dozens of points and explore clips and interviews that go into facets of Hendrix’s career in greater depth.

The Hypershow format is essentially a reinvention of the interactive CD-ROM documentary, which was developed into a high art in the 1990s by companies like Corbis and FlagTower. It may be a measure of how young the folks at Hobnox are—or how old I am—that when I mentioned the similarity during an interview, they had no idea what I was talking about; Macromedia Director and other PC-based tools used by CD-ROM producers in the 90s have long since given way to so-called “rich Internet applications” built on platforms such as AJAX, Microsoft’s Silverlight, and Adobe’s Flex and AIR platforms. (The familiar Flash player—which you must install to watch Mi145—is the browser-based runtime environment in which Flex applications are viewed.)

Making a plain music video into a Flex presentation isn’t simple, which is why you don’t see a lot of interactive content on sites like MTV.com, and why Hobnox is producing all of its own content for Mi145 right now. (The “Mi” stands for Music Intelligence.) Hobnox’s three German channels, on music, film, and urban culture, have begun to show some user-contributed videos, but for the moment musicians who want to get their content onto the U.S. channel need to approach Hobnox directly. “We do have the opportunity of working directly with artists who want to put something like a Hypershow together,” Wu says.

But there’s one quick way for a band to get on Hobnox: be the winner of a contest the company is running in concert with Boston-based music booking site Sonicbids to find the best local ska, punk, or hardcore rock band to open for the Bosstones at their New Year’s Eve bash at Lupo’s Heartbreak Hotel in Providence. In fact, the company is expected to announce the winning band and runners-up today, based on videos submitted through Sonicbids. The winners and five other finalists will be featured on Mi145, according to the company.

Meanwhile, the channel will continue with its edgy, somewhat antiestablishment fare, including a regular “docuette” feature called “Empty V”—a fairly transparent dig at MTV and its parent, Viacom.

“At MTV and some of the other established media outlets, they have a formula that works and they want to stick with it,” says Fell, who formerly worked as creative director at search portal Lycos. “We have people who have come from MTV and various other media groups, but we’re not afraid to experiment and to say that this Internet medium can provide a different viewing experience. It requires some new thinking and some new concepts.”

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You know that little “CC” you see here and there on the Web, in the margins of blogs or attached to photos on Flickr? It stands for the Creative Commons license, and until now, it’s basically been a way for content creators to say, “I don’t approve of traditional copyrights, so I’m just going to give my work away, with a few minor restrictions.” But a Cambridge startup being launched this weekend will add a new dimension to content protection. RightsAgent is rolling out a way for creators to still be liberal and open about sharing their work, while at the same time collecting money for certain uses of it.

The idea behind the Creative Commons licensing scheme, when Stanford law professor Lawrence Lessig and some allies got together five years ago to set it up, was to promote a kind of “copyleft”—an alternative to the excesses of traditional copyright law, which was being used at the time to attack MP3 downloaders, rap-song remixers, and other people experimenting with the newfound flexibility of digital media. In effect, the Creative Commons licenses offered writers, photographers, lyricists and other creative folks a new way to explicitly make their content more open—that is, to cede some rights to other users, such as the right to reproduce a work in full or modify it for non-commercial purposes, free of charge.

It was a nice idea that fit well with Lessig’s Free Culture crusade, and it served as an antidote to draconian digital-rights management technologies that threatened (and still threaten) to undermine age-old doctrines about fair use of copyrighted material. But the movement’s feel-good vibe—”Let’s make all content free!”—elided an important point: content creators still need to put dinner on their tables.

RightsAgent’s new online service, which was switched on last night, helps to fill in that missing piece. And appropriately enough, it’s being formally introduced to the public tomorrow at the Creative Commons organization’s fifth birthday celebration in San Francisco.

At the core of the service is a way for users to set up “personal feeds” that include all of the digital content they create, including their blog writings, the photos they put on Flickr, and the videos they post on Revvr. (The service will work with more content sources in the future; RightsAgent’s builders say they wanted to start with the services that already recognize Creative Commons licenses.) RightsAgent users can then choose the type of license under which they’d like to offer that content for various uses—a Creative Commons license, a Rights Agent Commercial license, or traditional “all rights reserved” copyright.

If they choose the RightsAgent Commercial license, which is modeled after a new type of Creative Commons license called Creative Commons Plus, anyone who wants to buy the rights to re-use that content for commercial purposes can do so directly through RightsAgent, which collects a 10 percent commission. People who want to use the content for non-commercial purposes can still do so under a Creative Commons License. Neither the Creative Commons licenses nor traditional copyright, by themselves, offer this kind of flexibility. As Lessig puts it in the company’s launch announcement, “RightsAgent plugs a big hole in the world of user generated creativity, by making it simple for creators to license rights commercially with their creative work.”

Yesterday I had the opportunity to ask RightsAgent’s two co-founders, John Palfrey and Rudy Rouhana, to explain more about the new company, which has a four-person staff and is operating on a seed-stage investment from Menlo Park, CA-based venture firm Venrock and Lexington, MA-based Highland Capital Partners. Palfrey is a lecturer at Harvard Law School and executive director of the school’s Berkman Center for Internet & Society. Rouhana is a serial entrepreneur and former vice president of Cambridge-based Top Ten Media, which operates new media properties Top 10 Sources and StyleFeeder.

Xconomy: Say more about this hole in the Creative Commons licensing scheme that RightsAgent is filling.

John Palfrey: Creative Commons itself, five years ago when it was founded, filled an extraordinarily important gap in the marketplace. It was very difficult if not impossible for somebody to give away some rights [to their work] and retain other rights. CC became an extremely simple way to do that. Five years later, what’s clear is that there is great value in what some people are generating online, and the gap we think RightsAgent will fill now is that …Next Page »

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