After being spun-off as its own company, Wallop is re-launching and promising to enhance the experience you get with other social networking sites.

Wallop operates as an invitation-only network and offers free profile customization that doesn’t require a person to delve into HTML code. However, people can also pay for interactive graphics and features called “mods,” created by Flash developers and designers.

Via CNET.

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Social Networking Wallops You In The Face

Microsoft Research spun Wallop out into a stand-along company, the firm’s VP of Product, Scott Arpajian, told WebProNews. Wallop is a next-generation social networking platform that brings along a marketplace for virtual goods created in Flash.

There is plenty of precedent for interest in virtual items, notably in games like World of Warcraft along with Korean-built Cyworld, which recently debuted in the United States. Arpajian noted that when it comes to self-expression, people would spend a lot of money.

He estimated spending by MySpace users with third-party sites for such self-expression items totals $500,000 per month. It’s even higher for WoW and other games. The US market for virtual game items sees between $800 million and $900 million in sales annually.

For Flash developers, a successful Wallop launch and steady growth in membership could be a pleasant boost to their finances. Arpajian hopes Wallop can tap the millions of Flash developers to participate in the Wallop Modder Network.

When those developers create mods in SWF, the mod goes on sale in the Wallop marketplace. Sales will be split 70/30, with 70 percent going to the creator of the mod.

That’s Arpajian’s pitch: make money creating Wallop mods and virtual designs, with very little changes required to the SWF files. The marketplace will allow for one-click purchasing, and each mod has DRM to keep a purchased one from being distributed to other users.

Wallop launched in beta today, in invitation-only mode. It’s going to remain that way, too, with growth coming from people who invite others to join the networking site.

Everything on Wallop has been created in Flash. There is no trudging through templates to change one’s profile. Instead, drag and drop elements allow the user to customize how the profile looks, and which elements may be on display.

Wallop launched with privacy controls in place. Users can set permissions to permit or restrict who may view a profile. The site also allows for group permissions. Those can separate other Wallop users into groups like Family or Friends, and limit what each group can see of a given profile.

The site’s users can blog, converse, and upload pictures and music; a music player has been incorporated into the Wallop interface. Wallop’s network feature lets a person move the icons for other people’s profiles closer to or further away from the “center” of the person’s Wallop presence.

Now Wallop faces the challenge of growing the audience beyond its initial beta group. Wallop’s template-free mechanism may be viewed as a benefit for participants, while others may prefer other sites where access to the template is a given.

Wallop does everything in a very visual way. That should appeal greatly to the potential members who have come to expect a more sophisticated and functional interface from websites, thanks to the broader adoption of Ajax programming techniques.

The micropayment marketplace for Flash mods will be the true test for Wallop. Positive adoption of it could further the entire concept of paying for content online. That has the potential to shift the financial dynamic from ad-supported content to audience supported instead.

You could say the site would Wallop the competition if this happens.

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David Utter is a staff writer for WebProNews covering technology and business.

Microsoft Wants To Smack MySpace

Just when everyone thought MySpace had relegated all the other players into second-tier status, Microsoft announced it would step up and throw a chair (figuratively!) at Fox Interactive Media’s best-known website.

Currently, Wallop has placed a basic web presence online, featuring some of the details of the forthcoming service. Based in Silicon Valley, the startup will be led by Karl Jacob, a former Microsoft executive who has headed psychic advisor site Keen.com, which became Ingenio, and then anti-spam firm Cloudmark.

Wallop will take a cash wallop of its own, collecting venture capital funding from both Microsoft and Bay Partners. The amount of initial investing is not known.

The source of the technology is a little more known, as it emerges from Microsoft’s IP Ventures. That year-old creation offers technology built by Microsoft Research to entrepreneurs who wish to license and develop it further.

Microsoft provided some background on what they feel will differentiate Wallop from other social networking sites:

The model sounds similar to that offered by Multiply, another social networking site. In an interview with Multiply CEO Peter Pezaris, he described the “six degrees of separation” idea of how people may be connected based on relationships.

That model allows Multiply to identify people by existing relationship in the network. For example, Multiply knows that if my brother’s wife joins Multiply, and identifies herself as such, the site knows she is my sister-in-law.

How closely Wallop comes to that model won’t be known until its release this year.

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David Utter is a staff writer for WebProNews covering technology and business.