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SMS meets social networking in new Web buzz

Narayanan Madhavan   May 25, 2007
First Published: 02:06 IST(25/5/2007) | Last Updated: 02:07 IST(25/5/2007)

What happens when you marry a habit, a trend and a problem? The answer could well be a creative solution that works - and makes money.


Webaroo Inc, a US-based but Indian-centric company founded by Rakesh Mathur, who made waves by co-founding and later selling to is playing a new game with Webaroo, with some of  his old ideas meeting new trends.

Earlier this week, Webaroo announced that it had launched SMS GupShup ( which aims to bring together the hot trend of social networking, in which people find others who share interests, and SMS, the text messaging that is now part of everyday life.

Sites like Indiatimes have been using SMS to help people find friends and dates using a short-code operator number, but Webaroo's GupShup, which also uses a short code number, integrates the SMS with the Internet in a manner similar to message boards and e-mail groups offered by firms like Yahoo and Google.

"What we are doing is using SMS as a platform to bring services around it, enabling one-to-many and many-to-many messaging," says Beerud Sheth, co-founder and chief technology officer of Webaroo.

The advantage is that people using either GupShup's Web site or  short number code on their mobile phone can simply start a group based on common interests that could be anything from salsa dancing to world cinema, Sanskrit poetry to bird-watching, weekend picnics to pizza-gorging. Or they could join an existing group, or invite others to the same group.

Social networking sites like Orkut and Ryze already such enable group creation. SMS GupShup has taken it to people on the move -even those whose handsets are not enabled for 2.5 or 3G capabilities that enable interaction with the Net.

Chirag Jain, vice-president and head of India operations at Webaroo, says 75 per cent of the 6.5 million mobile users entering India's already 166-million-strong mobile phone market buy handsets that can only do SMS or voice mails. In other words, social networking, largely a Web-based phenomenon, could find itself a fortune at the bottom of the pyramid of convergence, if SMS gets closer to the Web.

Oh, the service is free  But you need to pay for the SMSes you a participant in the group.

So where is the money for Webaroo, which has put smart young graduates from the Indian Institute of Technology to create the advanced software and Web interfaces that make this work? Webaroo’s GupShup, it hopes to make money by attaching advertising messages to the ones that group members send to each other, using keyword-based software and databases .

Not many care for banner advertisements that flood us on the Internet but Webaroo is trying to marry search engine firm Google's strategy of matching keywords to ads, so that people are likely to receive ads that match their interests. Google's gmail runs on that principle, and is generating billions of dollars in revenue. Webaroo hopes to do the same with ads matching SMS messages, though it is yet to be launched. The additional hope, given that this is part of an SMS environment that is largely local and mobile phone based, is that even smaller ads like one offering discounts at a local Pizza Hut can be matched to, say, a message for a group of foodies.

"It is not just what is in the message but who it is going to," says Sheth.

Eventually, the ads could get sophisticated and interactive. For instance, you could even receive a virtual discount coupon on the handset for a restaurant if you click on an ad.

The service has been on in India for only four to five weeks. Jain says the user base is already at 10,000  and doubling every week.

But why should advertisers care?

The answer could lie in the problem of The Long Tail, with which media buyers and brand builders worldwide have been grappling for a while now. As the Internet grows as a medium, niche content gains ground and even conventional mass-oriented content gets fragmented in distribution. In other words, even if TV programmes and publications command huge audiences, in terms of the number of consumers and attention spans, media consumption is faced with a "long tail" of  content. Capturing audiences and targeting them here is a new problem. Social networking groups and initiatives like SMS GupShup tend to address that problem .

It is yet to be seen how much advertisers would bite the bait on this, and also how many user groups will generate the content to match ad spending. But it is clear that media and advertising are not going to be the same again.

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