Year-old social-networking site Badoo offers an antidote to the increased commercialization of rivals such as Facebook and Bebo by banning advertising. Instead, revenue is driven by charging members to move to the top of a rolling list of profiles using a feature called Rise Up.
Badoo claims that 20% of its users access the function once a month and some pay eight or nine times a day to Rise Up. The idea is that people want a mass audience for their personal content and are prepared to pay for it. To keep it simple, users are charged, depending on their location, $1 in the U.S., one pound in the U.K. and one euro elsewhere in Europe. The fee is paid via a text message from the user's mobile phone.
The Badoo site, started a year ago in London by eight techies, has 12.5 million users and is most popular in Latin America, Spain and Italy.
This year the company is targeting the U.S. (where there are only 200,000 users) and the U.K. (140,000 users) and is negotiating a celebrity endorsement in each of those markets to kick-start word-of-mouth. Celebrity profiles are authenticated by Badoo and have a slightly different look from others.
"If Badoo succeeds, its lack of advertising won't be the reason -- it'll be people's hunger for celebrity and the opportunity to be famous for two seconds," said Dan Ng, head of planning at Tribal DDB, London. "Regular advertising hasn't hurt Facebook or MySpace; they're still growing. People can always filter out ads to a level where the other benefits of the site work for them. If ads have the right value, people will happily pass along a commercial message."
Badoo hopes to capitalize on the power of celebrity and provide behind-the-scenes footage and interaction with famous names.
To test the celebrity approach, a Badoo employee hooked up with Spain's renowned flamenco dancer Rafael Amargo and e-mailed out footage and commentary from their night on the town in London to 11.8 million users. The result: 1.8 million clicked through, including 1.1 million from Spain, and 21,000 posted comments.
"The U.S. and the U.K. are key because they have the sort of talent that our users want to hear about," said Lucy George, Badoo's director-communications.
Just like anyone else
Although the site doesn't sell traditional advertising, advertisers can submit profiles and content and pay for the same Rise Up feature as regular users. "We're not anti-advertisers; we're anti-advertising," Ms. George said. "We chose to monetize the site in a way that adds value to our users. We would love advertisers to engage with the site as long as they give our users what they want. Original content is the key -- it needs to be authentic and provide a behind-the-scenes look at the brand."
Theoretically, the site could profit from advertising if marketers go crazy with the Rise Up feature, but users can blacklist an entry, blocking it entirely from view, so a brand blitz will be tolerated only if its content is popular.
Popularity alone can also help users rise up the list without paying. Badoo monitors the most-viewed pages and gives them prominence on the site, taking into account users' own votes on other people's pictures or reportage.
Badoo ranked as the second-fastest-growing global search term in Google's "Zeitgeist" list for 2007, just behind iPhone and ahead of Facebook.
Ms. George speculates that Badoo has done well so far in countries where it faced less competition. The site is available in seven languages and plans to add 10 next month, including Russian, Korean, Chinese, Japanese and Turkish.
Its goal is to grow its user base to 150 million and increase revenue through the popularity of the Rise Up feature as more people join, offering a bigger audience for whom members can showcase their lives.