Way Too Good for Facebook or MySpace?

For the rich and well-connected who don't want to rub elbows with those who aren't, exclusive social networks pledge to keep out the riff-raff

by Catherine Holahan

Roger Allen Conner Jr. has little use for the common folk who frequent MySpace (NWS) and Facebook—you know, the clubs anyone can join. "A lot of social-networking sites are very low-quality," says Conner, the 22-year-old founder of a North Carolina consulting firm named SiloIQ. "The type of individuals that are on these social-networking sites are generally not well-networked themselves."

Not even a business-oriented network like LinkedIn will do. To put it bluntly, Conner wants powerful friends: the kind of people who board private jets after cutting business deals. People who don't get stopped by the bouncer at New York's Bungalow 8 nightclub. People with connections who can open doors and get his company noticed. People with log-ins to aSmallWorld.

Better known as "aSW" to its members, aSmallWorld is one of a handful of private online social networks where big is bad.

Online Country Clubs

Membership in these networks, not unlike the exclusive country clubs where the rich and powerful hobnob, is carefully guarded. At aSW, only a subset of established members have the power to invite new users to join. In developing the site, founder Erik Wachtmeister rejected the prevailing Web 2.0 business model of attracting large audiences so you can sell ads to big brands. Instead, he confines membership to the relatively small group of people who travel in the same elite, often moneyed, social circles. "One's network on the site is less useful if it is diluted by people you don't know," says Wachtmeister. His goal was "to create a private place where people could be much more forthcoming with information."

Critics are split into two camps: Some call aSW dreadfully elitist, while others say it's not exclusive enough. Nonmembers have nicknamed the site "Snobster," arguing that its invitation-only policy contradicts the premise of open communications upon which the Web was built. Then there are those on the inside who complain that, in an effort to become profitable, aSW is accepting less "valuable" members.

While there's little argument that aSW is growing fast, what constitutes too fast is open to debate. In the three-and-a-half years since its launch, membership has grown from 500 users to about 260,000. But MySpace has grown to more than 100 million members over a similar timeframe, making it a major recipient of the $900 million that research firm eMarketer estimates will be spent on social-network advertising this year.

For now, aSW appears to be an online gateway to the upper echelons of the social stratosphere. Although Wachtmeister won't name-drop when it comes to aSW users, a search of the site's member lists reveals plenty of twenty- and thirtysomething investment bankers, fashion-industry types, CEOs, and recognizable last names: Firestone, Rockefeller, Forbes, Trump (see BusinessWeek, 8/20/07, "High-Net-Worth Networking").

Cheating Discouraged

On InviteShare.com, a site where users seek invitations for Web services that are in testing or aren't open to the public, there's a 647-name waiting list for invites to aSW. Conner is among those hoping that an aSW member will invite him. Some would-be members would even be content to borrow a member's log-in—an offense worthy of expulsion to Big World, a section of aSW where your privileges are sharply curtailed.

Luxury advertisers, many of which shun the mainstream social networks, see aSW as a place where they can reach wealthy consumers and promote their products without losing brand cachet.