Microsoft Spinoff Wallop Launches

Wallop, previously a semi-forgotton Microsoft Research “sandbox” social network and photo sharing project, was spun off into a new, independent, venture backed business earlier this year (details here). Tonight at 9 pm California time, Wallop is launching a semi-public beta.

Wallop is a Flash based social network that will compete with Myspace, Facebook and others that I mentioned in a post yesterday. It includes free unlimited storage for people to upload photos, videos and music.

Unlike the other social networks, Wallop CEO Karl Jacob says he has no plans to ever put advertising on the site. It just lessens the user experience, he says. Instead, Wallop wants a piece of the $3 trillion per year U.S. market for self expression items (clothes, furniture, beauty supplies, etc.). As sites like Cyworld have shown, people are willing to spend money for online expression items, too (Cyworld brings in a reported $300,000 per day in microtransactions to its users).

So Wallop has created a marketplace for “self expression” items on the site. Flash developers can create items and sell them to users. Music clips, animated widgets, artwork, avatars, clothing for avatars, etc. will all be for sale. Wallop handles payments and DRM, and takes 30% of the sale price. The rest goes to the seller.

Marketplace functionality is still being built, but Wallop says they will have the ability for sellers to create auction sales for one of a kind items, limited edition sales, etc. in the near future.

Invited users will be given five invitations each that can be used to invite others into Wallop. More invitations will be given to users based on how active they are in the service. Look for the service to leave beta and open to the general public in early 2007.

Wallop is based in San Francisco and has 27 employees. They’ve raised a total of $13 million in venture capital over two rounds, from Bay Partners , Consor Capital and Norwest Venture Partners.

Screen shots of Wallop are below.