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Winklevoss Twins Give Social Networking Another Spin

Winklevoss Twins Give Social Networking Another Spin

Though perceived by their supporters to have been unfairly shut out of Facebook, the Winklevoss twins -- who settled their dispute with Mark Zuckerberg for tens of millions -- are moving on, and the latest recipient of their money and talent is SumZero. "These two brothers were the vision behind Facebook," said investment analyst Trip Chowdhry. "That is the converged opinion about Facebook's origins."

Brothers Cameron and Tyler Winklevoss -- famed for their dispute with Mark Zuckerberg over the formation of Facebook -- are trying their hand at the social media space again. They have invested US$1 million in SumZero, a social networking site founded in 2008 by fellow Harvard alum Divya Narendra, who also had a hand in bringing Facebook to life.

The Winklevoss twins sued Zuckerberg, alleging he stole the concept of Facebook from them. Narendra supported the twins in that legal battle, which was eventually settled out of court.

Now the three are collaborating again, although SumZero has little in common with Facebook beyond the fact that they are both social networking sites. SumZero is a professional network for hedge fund, mutual fund and private equity executives. It aims to facilitate contacts among its members, including the sharing of research and thought leadership papers.

The site boasts that nearly every well-known fund is a member, including Greenlight, Pershing Square, and Weiss Asset Management.

A New Model

SumZero represents a variation on the social networking theme, said Trip Chowdhry, managing director of equity research at Global Equities Research.

While Facebook and other sites of its ilk aim to be all things to all people, vertical sites such as SumZero target select groups of people, he told the E-Commerce Times.

LinkedIn follows this model with its focus on solely on professional ties. Other sites focus on specific verticals or industries; a number of them have proliferated in the health information space, for example.

SumZero stands out in that it has been successful in maintaining itself via a subscription model. It charges $129 per month for the elite membership, a sum that buys two investment ideas each month, live discussions with SumZero hedge fund managers, coverage and analysis on certain issues, and other investment-related opportunities.

"We don't like to compare ourselves to traditional social media outlets," Narendra told the E-Commerce Times.

"Rather, SumZero is attempting to use available social media tools to create a whole new type of investment research -- that is, buyside research. And unlike traditional social media outlets where the conversation is of very uncertain utility, when you get a large group of very sophisticated professional investors sharing ideas with one another, the end product here is extremely useful."

The $1 million investment will be used for typical growth initiatives, he added, "specifically product development and finding talented people to grow our team."

The Vision Thing

It is not surprising that the Winklevoss twins are backing this model, as experimental as it is, Chowdhry said.

"These two brothers were the vision behind Facebook, while the implementation was done by Mark Zuckerberg," he said. "People will disagree with that statement, but that is the converged opinion about Facebook's origins."

What the twins brought to the table, in other words, cannot be stolen, copied or communicated. For that reason Chowdhry is betting that they identify the next social media trend -- for indeed, there will be a next one.

"Friendster was dethroned by MySpace, and Facebook dethroned MySpace," he pointed out. "Facebook is a solid and enduring site, but there is room for others as well."


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