 Internet
social networks, in the popular imagination, are refuges for geeks who
seldom see the light of day and enjoy a purely theoretical romantic
life. But iWiW, the remarkably popular Hungarian online network, is
surprisingly rooted in what geeks call “offline” reality.
Tamas,
a 28-year-old lawyer, explains how iWiW oils the wheels of his personal
life: “It’s just like a database for your social life,” he says. “So,
for example, I met this girl in a bar last year, and I remembered her
name but didn’t get her number. Before iWiW I would have had a problem,
but all I had to do was search for her name, select the account with
her picture, and send a connection query. Now she’s my girlfriend!”
iWiW (which stands for International Who is Who) supposedly disdains
such opportunistic tactics, but the fact is that much of its success
rests on just such uses. With 1.6 million members out of a population
of 10 million, if you’re a young, social and computer-literate
Hungarian, you’re almost certainly a member. It was perhaps
this opportunity to have almost universal access to the country’s most
sought-after consumers that prompted T-Online, a part of Deutsche
Telekom, to pay almost €4m for iWiW in April 2006. The deal made the
founders, led by Zsolt Várady, pretty well-off overnight – although
they must now be wondering if they could have held out for more, given
the speed with which T-Online has increased the operation’s revenue
from online advertising.  “We
started the network in 2002. At that time it had no name; it was just
an IP address where friends could connect. We had no cash, we used old
computers and we worked from home,” says Márton Szabó, another founder,
who is now managing director of iWiW. Rather than being a scheme aimed
at making millions, iWiW owes its existence to a “sociometric survey”
of people’s social habits, which revealed that the internet could
improve social dynamics. As membership snowballed to 20,000 in the
first six months, the founders brought in a local software firm.
iWiW
remains different from giants like MySpace and Facebook. If you want to
join, you need to be invited. As Szabó says: “iWiW is a social network,
whereas MySpace is really a content network. Our network mirrors real
social relationships; it’s much more intimate.” Here iWiW bears a
resemblance to aSmallWorld.net, the network for the young,
international and rich. iWiW, then, could be among the first of
a generation of online networks that connect people to those they are
already connected to in some way, rather than exposing them further to
the randomness of the net. Only now is this ethos starting to bear
fruit on the bottom line. In 2005, iWiW turned over just
€20,000 and made no profit. Under T-Online it turned over nearly
€900,000 revenue and made a profit, the vastly increased revenue stream
owing everything to a strictly commercial approach to web advertising
adopted by T-Online. How that potential business develops in the future
is anyone’s guess, but it proves the old maxim that it’s not what you
know, it’s who you know – as they say in Hungary.
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