Business Report
Six Strange Things Worth Money Online
What’s a tweet worth? The Web is redefining what’s valuable and letting people create personal wealth in surprising new ways.
Influence: What’s a tweet worth? Nobody knows, but some people are cashing in.
Pictured here is $50 worth of merchandise that Julie Dance, a working mother who blogs under the name Angry Julie, purchased with a Dick’s Sporting Goods gift card she received from Klout, a three-year-old startup that scores people from 1 to 100 according to their influence on social networks such as Twitter and Google+. Just what determines the scores isn’t clear, but companies including Disney and Audi are paying Klout for the chance to send freebies and “perks” to influential social-media figures like Dance, who has 7,000 Twitter followers and a score of 59. Though she posted this photo online, she wasn’t under any obligation to mention that gift or the other 11 perks she has received.
So far, there’s no widely accepted formula for measuring online influence. For instance, one online estimator values Angry Julie’s Twitter account at $996.50, while another says it is worth $2,448. That would mean each of the blogger mom’s 32,800 tweets thus far is worth between 3 and 7 cents.
Identity: Of the approximately seven billion people on the planet, only 2.4 billion are online. But the rest will be. That may explain why some parents are snapping up websites and e-mail addresses for their toddlers, or even picking unique names so that their child will have a unique Internet “handle.”
“In the past, there was no such thing as a name being ‘taken,’” says Laura Wattenberg, whose website Baby Name Wizard tracks the popularity of names like Jonathan and Elvis over the last century. But today, owning one’s name online is both a status symbol and a way to guard one’s reputation.
One man, Jason Frumkin of Chicago, thinks it’s a business. At digitaltrustfund.com, Frumkin plans to charge parents around $295 to snap up and manage e-mail and social-media accounts for their children, even those yet to be born. (Domain names may cost more. According to Sedo, a broker of website names, the average price for “.coms” was $595 in 2011.) Says Frumkin: “Eight or 10 years from now, when their child becomes aware of this stuff, who knows how many more people will have been born with the same name?”
Virtual goods: In the U.S., $2.2 billion was spent last year on items that don’t actually exist except as strings of code inside online games like FarmVille, Restaurant City, and World of Warcraft. Spending on items such as purple toadstools or elementium deathblades is projected to grow by 30 percent in 2012, according to a research report from Inside Virtual Goods. Major financial companies, including Visa and Amex, have responded by diving into virtual commerce, buying firms that issue virtual coins, gold, and tokens.
Most virtual items cost only a few dollars, but not all. In 2010 an entrepreneur in the online fantasy world Entropia Universe sold Club Neverdie (pictured), a virtual asteroid and nightclub, for a total of $635,000—the world’s biggest sale of a virtual item at the time.
That’s real money. Divorce lawyers are now starting to wonder how to split up the “virtual assets of the marriage” when relationships go sour.
Personal data: Surfing the Internet comes with a catch: our every click is recorded, and information about our interests, habits, and purchases is used to show us more ads.
We are the product, in other words. In a recent report (pictured), the World Economic Forum called the trail of data we leave behind on the Web an exploding an “asset class” and declared personal data “the new oil of the 21st Century.” Pumping it are companies like Google, whose $37.9 billion in 2011 revenues was based almost entirely on knowing what we search for.
But what if we didn’t give all our data away? One startup, Personal, has created what it calls “data vaults” in which people can organize personal information—from vacation plans to checking account numbers. The company intends to launch an online marketplace where people can selectively sell access to their data. It might not be worth much on an individual basis, however. The 845 million people on Facebook earned the company $3.71 billion in revenue last year—or $4.39 a person.
Your stuff: Some call it “collaborative consumption.” Others call it renting. Whatever you call it, sharing possessions via the Internet has become the latest hot business idea from Silicon Valley.
The most successful example is Airbnb, which helps people turn their apartment or spare bedroom into a hotel; it handled bookings for four million overnight stays last year. Through sites like Relay Rides, car owners can rent strangers their otherwise idle vehicles, like the one company founder Shelby Clark is driving here.
How far the trend could go is anyone’s guess. Some startups are hoping for a market in sharing pets, even leftover dinners. Take this virtualization of ownership to its logical end and we may eliminate the need to possess much of anything at all.
Bitcoin: Released onto the Internet by an anonymous, mysterious creator in late 2008, the bitcoin is a peer-to-peer digital currency designed to cut out the middleman—governments, banks, even online money operations like PayPal.
Bitcoins are not just made: they’re mined. In order to unlock new coins, you use your computer’s processing power to correctly guess a cryptographic puzzle. Approximately eight million bitcoins exist today, and to prevent inflation, they will never be allowed to exceed a limit of 21 million. The virtual coins are traded, can be redeemed for hard currency, and are accepted in some places as a form of payment.
Following publicity in 2010, the worth of a bitcoin skyrocketed from a nickel to $30 before plummeting to around $5. The currency has been far more volatile than other forms of money like gold and the U.S. dollar (see chart, above).
What’s next? Because the bitcoin is a decentralized currency, not subject to the control of any bureaucracy, ultimately its buyers and sellers will decide.