Profitable networking

While at a summer barbecue with her brother and his friends, Joyce Kim checked her e-mail and saw an unfamiliar name.

The e-mail was from a guy she had supposedly met at a party who now wanted to take her out on a date. The only problem was, she did not remember ever meeting him.

She read the e-mail aloud to her brother Jared and his entourage - all "tech geeks" who had toted their laptops to the barbecue. The group immediately turned to their keyboards to do a little cyber stalking. Within a few days, Jared Kim was running a company designed to do just that.

His experience is both an example and a cautionary tale for a new generation of code writers, programmers and Web developers who are increasingly using social-networking sites as platforms to launch their own businesses.

This new cottage industry has become so prominent that even Facebook Inc. - a popular college social-networking site - agreed in May to partner with some of these "third-party" businesses. The deal will allow select companies to run their programs off Facebook's platform and generate ad revenue.

But when Kim first had the idea to create his company at that barbecue in May 2006, it was more of a fun summer project than a moneymaking venture.

Working with his friends to Google, check Friendster Inc. and search MySpace for any information they could find on the prospective date, Kim had a thought: Why not write a program that searches all the social-networking sites at once and creates a profile of the person being searched for?

In one day, Kim, 19, who attends the University of California, Berkeley, had built a program he called "a little hack I put together" and named it Stalkerati.

In three weeks, Stalkerati was featured in a blog. In another week, 10,000 users were on its site per day.

All the traffic soon got the attention of MySpace, the social-networking company owned by News Corp.'s Fox Interactive Media Inc. MySpace considered Stalkerati a security risk because it required users to give their MySpace password and user name. It blocked Stalkerati, and other social-networking sites followed.

MySpace is still, in many ways, where it's at in the third-party world. It allows users to type Web code directly into profiles. That allows them to change the look of their actual profile page or create programs that work off the MySpace site to provide services it does not offer.

"Anything you can do on the Web is at least possible on MySpace," said Matt Brown, a 25-year-old MySpace user and co-owner of an interactive marketing agency in Denver.

Do a Web search for MySpace and you will find a wide variety of third-party companies, including sites that offer codes that can add colors or background pictures to your profile page. Other companies offer additional tools for inputting pictures or sending instant messages to MySpace friends.

Many of these sites are funded with click-through ads that can make the owner anywhere from $1 to $10 for every 1,000 page views. Since many of these sites get thousands - or even hundreds of thousands - of page views, the money can add up.

Although no one keeps track of the number of third-party sites and companies, Pete Cashmore, who runs the social-networking blog "Mashable," said the number was in the thousands and growing.

Brown uses a Web site called myspacelog.com, which has tapped into a big demand from users desperate to know who has been checking out their profiles. The site keeps a list of the unique Internet Protocol address of its subscribers and each time one of its users looks at Brown's profile, it adds that user identity to a log of who has viewed him.

If the viewer is not a subscriber, Brown can still see the user's IP address, which can be used to look up the city and state where it is registered.

In other words, when his ex-girlfriend in Boston is checking out his profile, Brown has a pretty good idea.

The site has signed up almost 200,000 users since it launched a year ago. Social networkers seem to be willing to give up the anonymity of the Web to satisfy their curiosity.

"I think MySpace might enjoy having us around," said co-founder Tom Gill, a 25-year-old resident of Orlando, Fla.

But user demand does not necessarily mean a business will succeed in the social-networking sphere. Since many of these sites work off the MySpace platform, they must abide by MySpace's terms of service, which prohibit any unauthorized commercial use of the site.

MySpace said that although it had shut down and blocked some sites, such as Stalkerati, for violating its terms, it generally encouraged innovation and development.

"We have always offered our users a blank canvas for their creativity and self-expression, whether it's customizing profiles, importing HTML, or embedding third-party services," the company said in a statement.