If you've been listening to the news, you might have serious doubts about meeting face-to-face with people you first encounter online. eBay (NASDAQ:EBAY) doesn't seem to agree; it's made a $2 million investment in a social-networking site called Meetup. As its name suggests, Meetup brings people with similar interests together online so that they can later "meet up" in real life.
Considering all the safety considerations that have been dogging social-networking sites -- in particular News Corp.'s (NYSE:NWS) MySpace.com, which has made some recent concessions on online safety for its youthful clientele -- it might seem like an odd investment indeed. But it's no less odd than the stake eBay snapped up in another social phenomenon, Craigslist. Given eBay's history and philosophy, the more you think about it, the more sense it makes.
eBay founder Pierre Omidyar happens to be a director of Meetup and owns a 10% stake in the entity. In an 8-K, eBay said that while Omidyar does not have a material interest in eBay's transaction, making disclosure of the investment unnecessary, eBay decided to reveal the connection "as a matter of good corporate governance and because it is not an ordinary course commercial arrangement." Meanwhile, earlier media reports quoted an eBay spokesperson explaining that the company's interest in Meetup is part of its study of online community-building.
Social networking is one of the hottest buzzwords around these days, although sites like Friendster, Yahoo!'s (NASDAQ:YHOO) 360, and Google's (NASDAQ:GOOG) Orkut lack MySpace's accumulated aura of cool. Although many social-networking sites have a reputation as places to meet dates, Meetup is a hybrid of online and offline social interaction centered around shared interests or goals, such as learning another language or connecting with other stay-at-home moms.
Honestly, though, in writing this piece I found myself most intrigued by the Omidyar Network. It's "a mission-based investment group committed to fostering individual self-empowerment on a global scale." According to the Meetup website, the Omidyar Network "intends to catalyze a new breed of business for which social impact directly drives profitability." Recipients of Omidyar Network funding include not only Meetup, but also Digg (which has gotten lots of attention for its user-generated ratings of news content), some microfinancing services, and ModestNeeds, which appears to be an interesting site for individual philanthropy.
There's a lot of talk about community-based content and services on the Internet these days, with collective intelligence powering the engines. When you think about it, eBay was one of the first such community-based businesses, and continues to be one of the greatest. Remember, its advent proved that most people online are trustworthy. (Former eBay marketing tagline, "The Power of All of Us," emphasized that point.) While digging into this article, I wondered if keeping an eye on eBay and its founder might be a smart way to peek at the future of the Internet -- and the social and business interaction developing in its wide-open spaces.
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Alyce Lomax does not own shares of any of the companies mentioned.
