April 19, 2006 4:16 AM PDT

Mashups for fun--and profit?

Mashup Web sites, from celebrity stalking sites to an online pedometer for running enthusiasts, are certainly all the rage. Now comes the hard part: making money off these things.

Though a handful of mashups have received venture capital backing, many investors are leery of putting money into the sites, which typically use application programming interfaces (APIs) from online map providers such as Google, Yahoo and Microsoft to display information on an easy-to-use online map.

The main reason for caution is the very thing that makes mashups so popular--they're fairly easy to create, and it's not that difficult for someone to duplicate the more successful ones. On top of that, it's not clear yet how much money can be made with these sites. Are they the next big thing on the Web, or just a nifty niche for small companies and hobbyists?

"I think mapping is a commodity," said Peter Rip, a managing director at Leap Frog Ventures. "It's simply combining two things but not (adding) a lot of intellectual property on top of it. The problem is the people giving you the content want to be compensated. You are in fact a reseller of that content."

That's not to say there isn't a business to be had. Map technology providers such as Google and Microsoft are expected to eventually put ads on maps that are geographically relevant to consumers and therefore more likely to generate revenue. And mashup sites such as Platial and Trulia already appear unusual enough to pull in interest among investors.

Trulia, a real estate search engine, raised just less than $8 million from angel, or first-round, investors and Accel Partners, said Trulia Chief Executive Pete Flint.

"We are a real estate technology media company first, and the mashup is how we display that information," Flint said. "That was very attractive from an investor's perspective."

Platial, which bills itself as "The People's Atlas," lets people create personalized maps where they can tell stories and show where events happened. The company received an undisclosed amount of angel funding from individuals; venture capital firm Kleiner, Perkins, Caufield & Byers; and the Omidyar Network investment group. "I think it was an experiment on all sides," Platial co-founder Di-Ann Eisnor said in an interview.

"I don't think there is an emerging economy of mash-ups. In fact, imho (in my humble opinion) the term 'mash-up' is overused to reference the fact that personal geography is important to people around the world," she wrote in an e-mail.

Platial is planning to launch local advertising on its site within a few weeks, but in a manner that is different from traditional online advertising, Eisnor said.

Real estate prime for mashups
Most likely to get venture backing are companies like Zillow.com, which blends a mashup with several other services and home-property valuations and data from different sources. It recently landed a $32 million investment from Benchmark Capital.

Rip argued that visualizing houses or jobs on an online map is merely a feature. But if a Web site shows home values in low-crime areas within a certain price range and with high-scoring elementary schools within 30 minutes of a workplace, then that is an application that could conceivably be monetized, he said.

"A lot of these sites are going to have a very small population of users. How many people are really interested in beer places in some small town in Indiana?" said Adena Schutzberg, executive editor of Directions Magazine. "Real estate has a much broader appeal. Those are the ones, I suspect, that will make money first or figure out how to use this model to their advantage."

CONTINUED: Other revenue streams…
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10 comments

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Concern about revenue
If the backbone of your service is provided by somebody else then you are at risk.
Google, Microsoft, AOL have all said they may place ads through their mapping services.

This means mash-up sites will just end up being another adSense website. (I know adSense is Googles brand and the other call it something else)
For sites hoping to get their own advertising in place they will have to compete with the likes of Google.
With Googles history and focus on advertising for revenue this isnt a fight Id like to take on and I expect most start-ups will also find it difficult.

The only hope I see if for Mash-Ups to become mature enough to afford the licence fees for a non-ad placed version of the mapping service before they run out of funds and the excitement of mash-ups is reduced.
Posted by ahickey (177 comments )
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Print Mode
When we print CNET articles, could you add all the relevant web links at the bottom of the page.
Posted by webwala (15 comments )
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Useful idea... will be considered
The idea of taking the in-line links out and putting them at the bottom of the printer-friendly version has some merit. I wonder how many people will want to type out the full URLs, rather than simply go to the live version of the story (which URL is on the printer-friendly page) and click away from there.

Not promising, but considering.

Thanks for reading and participating.

John Roberts
CNET News.com product development
Posted by pencoyd (82 comments )
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Platform with great possibilities
I see alot of potential in the mashup space. In my opionion Microsfot, Google and others are just providing a platform that all sorts of applications can be built on top of. With the right creativity, there are endless possibilities. Zillow is a great example of a site that could revolutionize the real estate industry just like Travelocity and Expedia revolutionized the travel industry.

One thing this article didn't mention is that Microsoft already allows commercial use of their Virtual Earth API provided that limited ads are allowed on the map (triggered by a search bar above the map). I'm using this on my site - www.VirtualWorldRealEstate.com. I won't mind when they officially role out their advertising plan especially since it will provide revenue sharing.
Posted by VirtualWorld (2 comments )
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Its easy to monetize these
You just have to know about the google curves.
<a class="jive-link-external" href="http://blog.tallsails.com/2006/04/10/the-google-curves.aspx" target="_newWindow">http://blog.tallsails.com/2006/04/10/the-google-curves.aspx</a>
Posted by ntis (6 comments )
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popurls
<a class="jive-link-external" href="http://popurls.com/" target="_newWindow">http://popurls.com/</a> is the best mashup web 2.0 has seen so far
Posted by robinlast (4 comments )
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not just about maps
this headline caught my attention and interest, but as i was reading this article it became clear to me that this author does not really get it...and has painted a picture that myopically associates "mashing" with online mapping applications. it is not just about using Google and Yahoo to create nifty mapping tools.
Posted by sdornan (1 comment )
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Mashup Directory
Found a directory for mashups here:

<a class="jive-link-external" href="http://www.webmashup.com" target="_newWindow">http://www.webmashup.com</a>
Posted by Mashup (1 comment )
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http://www.programmableweb.com is the main mashup site these days.

In response to ahickey on April 19th - I too was concerned that eventually Google would place ads all over their maps product but 3 years on and this still has not happened. Good news and I hope it stays this way as we have developed several mashups based on Google maps and advertising would be a royal pain! Here are some of our mashups:
http://www.sletoh.com - compare hotels in Europe
http://www.tubehotels.com - compare London hotels
Posted by pintofmilk (1 comment )
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Awesome post.Here's a tool that helps create Map Mashup providing a step-by-step wizard that generates ready-to-deploy code on any website or blog http://blog.caspio.com/integration/announcing-the-new-and-improved-map-mashup-version-7/
Posted by mlee3680 (16 comments )
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