IAC nabs Friendster-like site

InterActiveCorp, media mogul Barry Diller's conglomerate of enterprises ranging from online dating to home loans, has agreed to acquire business networking site ZeroDegrees.

Tech Industry
InterActiveCorp, media mogul Barry Diller's conglomerate of enterprises ranging from online dating to home loans, has agreed to acquire business networking site ZeroDegrees, the company said Monday.

Hollywood-based ZeroDegrees is one of more than a dozen start-ups that have been launched over the past year in the hope of cashing in on the trend popularized by dating site Friendster, which has drawn millions to seek connections via online social networks.

Friendster is the leading example of personal/dating sites, along with Tribe Networks and CraigsList. Last month, Google introduced Orkut, its own personal referral service.

In contrast, ZeroDegrees focuses on business contacts. Potential rivals include LinkedIn, Contact Networks, Socialtext, Spoke Software, Ryze, Visible Path and Eliyon.

These sites are versions of the concept of "Six Degrees of Separation,'' the title of a Broadway play and a movie that has become a phrase embedded in the popular culture and refers to the web of connections that tie together seemingly remote people via friends of friends and so on.

"IAC's acquisition of ZeroDegrees will bring more credibility to business networking,'' said Jas Dhillon, 43, the company's co-founder and chief executive.

Terms of the deal were not disclosed.

Thanks to its roots in Southern California, ZeroDegrees first caught on with entertainment executives and their counterparts in the defense and aerospace industry, he said. This contrasts with the technology industry focus of many other business networks.

"If you look at the competition, (most) are very heavily focused on Silicon Valley technology companies and the venture capital community,'' Dhillon said.

Some 218,000 people have signed up since the site for the service was introduced in August. The site's biggest users are business people looking to share their address books to make new contacts and executive recruiters seeking new hires.

ZeroDegrees hooks into a dozen of the most popular e-mail and address software programs, including Microsoft Outlook, Lotus Notes and ACT. This integration reduces the fatigue of having to re-enter each contact in one's network, Dhillon said.

People retain control of their personal information, preventing strangers from using the site as a way to ask for favors, a problem with some similar sites. "Your neighborhood contains only people you know,'' he said of how the site works.

ZeroDegrees joins InterActiveCorp's stable of Internet networking sites such as Match.com for dating and eVite.com for party organizing. IAC also owns CitySearch local directories, TicketMaster, Expedia, HotWire, Hotels.com and LendingTree.com.

ZeroDegrees is IAC's first solely business-focused brand.

The excitement over so-called social software sites has created a mini-replay of the dot-com boom as Silicon Valley venture capitalists have poured tens of millions of dollars into funding the most high-profile of these sites.

There's even talk of initial public offerings, despite the absence of proven business models for generating sales, and the fact that most sites caution they are still in preliminary testing mode.

Critics complain that relationship software has trouble keeping personal and professional ties distinct and that its features are more likely to end up being incorporated into other programs rather than survive as standalone businesses.

Dhillon said he believes that such relationship services will become a pervasive feature on the Internet.

"They will be a fundamental feature of existing software systems, whether we are talking about enterprise software or Web sites,'' he said.

Already, major players in the Internet industry are seeking to incorporate features of social networking into their sites, even as visionaries struggle to come up with open standards for sharing contact information across many different sites.

Story Copyright  © 2004 Reuters Limited.  All rights reserved.

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