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The Honolulu Advertiser
Posted on: Tuesday, March 20, 2007

Tapping 'YouTube economy'

By Chad Graham
Arizona Republic

Years after "The Fast and the Furious" movie franchise began, car buffs continue to trick out their rides. For Phoenix-based MotorWeb Inc., which sells aftermarket auto parts online, that means upward of 15,000 daily visitors to its Web site.

But there was little way to find out more about the interests and buying habits of consumers who can spend tens of thousands of dollars on their cars. "They come in, some buy, some leave, I don't know who they are," said Lonnie Boutte, marketing vice president.

Boutte set out to create a virtual community where customers could view, upload and share videos and communicate with other enthusiasts from around the world. In about four weeks, the site will match customers with products that relate to a video they're watching.

He hired a Tempe, Ariz.-based startup called vSocial Inc., which is gaining buzz for its technology. It allows companies to build their own video-based, social networking Web site.

"We've taken our commerce and our communities and integrated the two using (vSocial's) engine although they're on separate platforms," Boutte said. "The consumer looks like they're in one place."

Such grassroots technology is becoming increasingly important in reaching consumers, particularly those in their teens and early 20s who don't own a television and digest media from the Internet, according to experts.

"We are enabling third-party companies to plug into the You-Tube economy," said Mark Sigal, vSocial co-founder and chief executive officer. "Businesses of all sizes look at what YouTube has done in terms of generating tremendous traffic, conversations and video and essentially social-networking capabilities."

Depending on the package and size of the company, companies can build a site that costs between $199 and more than $10,000 per month, plus ad revenue sharing. The sites are maintained by vSocial.

Of course, the company's management also tries to set it apart from YouTube, the social-networking giant purchased by Google in October for $1.65 billion.

"It's a two-edged sword," Brent Oesterblad, vSocial co-founder and chief operations officer, said at the company's offices near the Arizona State University campus.

"We were right there with YouTube two years ago and arguably before then. The major difference is that our end-business model is to focus on developing products in a platform for business-to-business play."

In contrast, "YouTube clearly has designed themselves as the destination Web site and a distribution Web site and clearly that was a great success. They absolutely help our ability to sell the concept and our business model," he added. "Everybody does now know YouTube."