Sun 30 Sep 2007
The dust-up caused by the revelation that Active Rain management was in discussions with Move about a possible purchase is reminiscent of the Washington Post’s investment in tribe.net, another social networking site, a few years back.
So far, most of the 43,000 Active Rain members appear supportive of the aborted purchase, even as their personal information and content was about to be sold to the highest bidder, yet there are a few comments of indignation, though most of the writers appear naive to the sell-out.
Tribe.net was founded by a group of Burning Man attendees in 2003, the same year MySpace was started. Like Active Rain, its site features user-generated content and social networking, and like other social networking sites, has inspired rabid loyalty and feelings of belonging and community.
Anyone could register as a new tribe user, and could join a network of friends, usually bonded together by alt interests or activities. As more and more people and their friends joined tribe, it resulted in an elaborate social network with many thousands of members. Tribe users leveraged the small world phenomenon as a way to enhance their own immediate social network and it has about 500,000 members v.s. Active Rain’s membership of 43,000.
In a surprise move, in 2005, the owners of tribe.net accepted an unspecified amount of VC (though the number speculated was about $6M) from Knight Ridder and the Washington Post, giving them about a 20% ownership of tribe.net.
Members were indignant that their personal information and content was sold out. Unlike the MySpace sale to FOX, this was personal. The tribe’s members, being made up of mostly alt culture, techno geeks and BM attendees, had very left, liberal leanings. They hated being sold out. Tempers were exacerbated when new tribe management announced it would remove all “mature” content from the site. How could they sell advertising on the site to major advertisers if the corporate ad appeared next to a topless hippie or nude Burning Man attendee?
Angry and upset tribe.net members left the site in droves and started their own new site, Free-Association.net, their MO “What sets us apart is that no company owns us. We’re open-source, volunteer-developed and -run, and donation-funded.”
The look and feel of tribe was changed and then, in a coup by the original creator, was supposedly “reclaimed” and returned back to its original look/feel, but it’s never been the same since.
I doubt that even if/when Active Rain were to be sold to Move or any other corporate entity, the agents & lenders online would ever revolt. According to reports, there are only about 500 active members anyway, and it’s doubtful that membership is very radical or subversive enough to give a R.A. who owns it, as long as they get their points and show up as the #1 agent in their market.
One thing to note, last year when there was talk of NBC Universal purchasing tribe.net, the price bandied about was $5M, and this was for 500K users. Based on those numbers, the $33M price offered to Active Rain by Move for 43K registered members is, uh…. optimistic, at best.
I’m not exactly sure what happened but what I can piece together is that tribe’s original investors gave up on the company last year. Talks with NBC failed and they sold their stakes to tribe.net founder Marc Pincus. The original investors didn’t recoup their $6.3 million investment. Then, with still about 500,000 subscribers, Pincus sold tribe.net to Cisco Systems. And the price was rumored to be less than $3M.
Social networkings next phase (NY Times)
NBC rumored to buy tribe.net from TechCrunch
Activerain.com v. Move.com: The Duplicity at Activerain.com
What Active Rain should do now
Social networks aren’t products
