Who Will Buy Chatroulette?

Going by media accounts, Chatroulette.com is all the rage. It was mentioned on Saturday Night Live over the weekend, and The Daily Show parodied the site last Thursday.

In other words, the unvetted showcase for exhibitionism may have already jumped the shark.

It doesn't always work out that way, though. Sites such as Facebook and Twitter have only grown in popularity since they were mainstream media novelties. A flavor of the week occasionally becomes the next Web 2.0 sweetheart.

As a traffic-grabbing phenom, Chatroulette is going to pose the same questions that we've asked about online eyeball magnets. Is it for sale? Can it be monetized? Chatroulette poses a new query: Will our shareholders approve?

See, Chatroulette pushes the envelope by packaging it in a brown paper bag. The video-chat site connects two random strangers by webcam until one or the other clicks the "next" button. It's unfiltered, so one shouldn't be surprised to find the site dominated by angst-riddled guys -- pants optional.

The curiosity factor is certainly helping attract an audience these days. This would make it a natural buyout candidate for panache-starved Yahoo! (Nasdaq: YHOO  ) . Google (Nasdaq: GOOG  ) would also make sense, since it has a lot of experience monetizing video screens through YouTube. AOL (NYSE: AOL  ) is a new media heavy that can use the popularity injection. Unfortunately, wallpapering Chatroulette with ads would probably kill its buzz. The search engines may also alienate sponsors if they fear their ads will show up on a site with questionable content.

Playboy (NYSE: PLA  ) and Rick's Cabaret (Nasdaq: RICK  ) are some of the adult-entertainment companies that wouldn't sweat the taboo. However, Playboy is in a bad spot. It isn't expected to turn a profit until next year at the earliest. Rick's Cabaret is profitable, but probably not in a position to raise its bidding card.

That leaves online dating-site operators. IAC (Nasdaq: IACI  ) could probably take the Chatroulette model and update it for its Match.com and Chemistry sites. A walled subscription model would help close the gender gap, revolutionizing the concept of speed dating. However, it can always just copy the concept for an in-house feature.

Logitech (Nasdaq: LOGI  ) is a longshot, but the webcam maker would clearly benefit by being at the wheel of a site with so many webcams firing up.

A buyout still doesn't seem feasible. You need a seller and a buyer to complete a transaction, and Chatroulette may be noncommittal on both ends.

That's OK, though. One of them can simply hit the F9 key, and a new random stranger will pop up.

Is Chatroulette here to stay? Share your thoughts -- and experiences, if you dare -- in the comments box below.

Google is a Motley Fool Rule Breakers selection. Logitech is a Motley Fool Hidden Gems pick. Motley Fool Options has recommended a write covered calls position on Logitech. The Fool owns shares of Logitech. Try any of our Foolish newsletter services, free for 30 days.

Longtime Fool contributor Rick Munarriz remembers when social networks were an offline endeavor. He owns no shares in any of the companies in this story and is also a member of the Rule Breakers analytical team, seeking out the next great growth stock early in its defiance. The Fool has a disclosure policy.


Read/Post Comments (6) | Recommend This Article (7)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On March 09, 2010, at 11:09 AM, TMFKris wrote:

    There's a lot of people online looking to make a human connection, so it sounds intertesting. However, if it's mostly adolescent-minded men hoping to impress women by doing something racy, then it should die quickly.

    I take it the site matches men with women, so it's not meant to encourage platonic friendships. (I think there should be more sites that allow people to look for same-gender friends.) It sounds like a fun idea, maybe you'll find your soulmate in this crazy, random way. Why not? Although how crushing to have the other party click away from you immediately or when you think your'e being really witty.

    Kris (TMF copyeditor)

  • Report this Comment On March 09, 2010, at 12:32 PM, perryrants wrote:

    having visited this chat site the question back at you is, wouldn't it be easier to create your own male mastubationg site?

  • Report this Comment On March 09, 2010, at 12:42 PM, athmpsn wrote:

    The problem is that there's a pants deficiency.

  • Report this Comment On March 09, 2010, at 2:16 PM, alexxlea wrote:

    No one except perhaps male enhancement companies would consider buying ad space on the site. It's completely stupid to try and monetize something that will completely alienate your audience.

    Oh, and it's like you wrote this article some time in 2005 or something, as there has long been speed-dating webcam sites, none of which are any good, and all of which have horrible ratios.

  • Report this Comment On February 07, 2011, at 7:12 AM, benhold wrote:

    I really think its a must to have a feature like chatroulette on ones website. I bought that script from a genuine source (http://www.rcpsecure.com/govisiochat/) My traffic tripled in just 1 week. I think its an awesome and wise investment if you really want your websites to perform great nowadays.

    Ben. L.A.

  • Report this Comment On July 01, 2011, at 5:06 PM, ShaunPerry wrote:

    @benhold, thanks so much for the info on Govisiochat script dude, I was looking for this script for like ages, got it in 99$ and it works like a charm. Yeah I must admit it really is a very cool and easy to install script. I recommend this to everybody who wants to launch their own chatroulette or videochat services.

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