Facebook killer called Ello gets the timing right

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Ello

Ello's thinly veiled rebuke to Facebook: 'Your social network is owned by advertisers. Every post you share, every friend you make and every link you follow is tracked, recorded and converted into data.'

SAN FRANCISCO (MarketWatch) - There has been a lot of chatter on social media this week about a new social network called Ello, which is getting buzz for its anti-Facebook Inc. stance. But is the start-up, which accepts no advertising and does no data mining, ready for prime time?

Ello has apparently been gaining such a huge influx of new users that its servers were having problems in the past two days, despite the requirement that you need an invitation to join. As Ello tells users who visit its simple, clean, black-and-white site: It has a 'manifesto.'

'Your social network is owned by advertisers,' reads Ello's 'about' page. 'Every post you share, every friend you make and every link you follow is tracked, recorded and converted into data. Advertisers buy your data so they can show you more ads. You are the product that's bought and sold. ... We believe there is a better way.'

The network was launched earlier this year and is still in beta mode, so the uptick had initially been slow, according to Betabeat, a blog covering New York tech companies. Ello's main creator, Paul Budnitz, told Betabeat that there have been 4,000 sign-ups an hour to the site this week. A second story posted Thursday said that number had risen almost seven-fold. In the past few days, people have even begun selling invites to Ello on eBay On Thursday, there were 33 invitations to join Ello for sale, at prices ranging from $5 to $500.

Budnitz, who is also the founder of Budnitz Bicycles, which makes fast, light, retro-style bicycles, said in an email to MarketWatch that the genesis of Ello was that 'we just wanted to create a social network for ourselves.' He declined to say how many people are trying out Ello. 'It's a lot!' he wrote.

There are seven co-creators listed on the website, including two graphic artists and software developers.

Many attribute the sudden surge of Ello users to a new policy at Facebook which is cracking down on users who don't go by their real name or name that is 'associated with a government ID.' That has caused a firestorm among artists, musicians and the LGBT community, who use stage names or pseudonyms as part of their profession or as a way of protecting themselves.

Budnitz, who is also Ello's chief executive officer, said the young company has funding, but he declined to say who its investors are or how much it's received. It is currently operating in multiple locations, with Budnitz based in Vermont, and also working part time in New York. His partners are in Colorado.

'I don't know if it's going to ever be 'the next big thing,' but it is definitely in the right place at the right time,' said Christopher-Ian Reichel, a user-experience executive in New York. 'And Facebook is at a critical moment where entire segments of its audience are all looking to jump ship.'

Reichel said Ello is 'still buggy and somewhat empty, and people are still joining.'

That is for sure. On Facebook, the buzz about people joining Ello has been especially noticeable in the past few days, especially among artists and performers I know. My friend Sara Klotz de Aguilar, a musician based in Oakland, said she wasn't sure how Ello would make money, but she would be willing to pay a monthly rate to promote upcoming gigs for her band, Sara & Swingtime.

'What nobody can explain is how they will pay for it without ads or data mining,' Klotz de Aguilar said in an email. 'Frankly, I would be thrilled to pay a subscription per month if I could have unlimited contacts and be able to promote to a wide audience without paying extra, and not to mention how Facebook doesn't even deliver if you do pay to promote.'

Budnitz declined to explain how Ello plans to make money. 'Yes, it's a for-profit company,' he told me. 'Otherwise it could never survive.'

Betabeat describes Ello as a cross between Tumblr and Facebook, with a pared-down interface. After I received an invitation to join, I have not found many people I know. The network seems to be slowly getting populated, but like most social networks, your feed is as empty or as full as your contacts. Many of the posts I found are photos or art work, with very little or no text.

'Ello is clean and simple and let[s] us connect with our friends and see awesome stuff, without feeling manipulated by a big system that was making social networking no fun,' Budnitz said in the email.

Ello said it does collect some data on its users. 'This information helps us understand how people are using Ello, so we can make Ello better,' the company says on its website. 'For example, if we create a feature that everybody is using, we want to know about that.'

Whether Ello will become just another unsuccessful attempt to compete with Facebook, such as Apple's iTunes Ping or the struggling Google+ is a big question. After all, Facebook's market value just exceeded a staggering $200 billion.