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Web's New Field of Dreams Emerges in D.C.
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"That's how they want their music and where they want their music -- inside their social network, which is where they are interacting every day with their friends," said Qloud co-founder Toby Murdock, 33.
Started three months ago, the Qloud application now claims more than 1 million users. The company has grown to seven people in Silver Spring and 18 developers in Romania.
Murdock is betting his service's popularity among teens and people in their 20s will prove an attractive demographic for advertisers. But for now, he says, profits are not a priority.
"We're venture funded and revenue isn't a big deal," Murdock said.
Mixx founder McGill has raised about $1.5 million from Intersouth Partners of Durham, N.C. But even with his background -- a former general manager of Yahoo News, he came to the Washington area to oversee strategy at USA Today -- the investment was not easy to get.
"I got shot down by the best of them," he recalled.
McGill heads an eight-person team on the first floor of a nondescript McLean office building. Whereas Qloud has built an application for Facebook, Mixx is a destination site.
The goal is to combine the Facebook-like social networking with news, allowing users to see a list of the news articles and Web pages that are being read by people in their network. Users can see what a particular person is reading and check out the most popular articles in a Zip code or organization. They can also see the most popular articles by topic.
"This is a human recommendation system on a relevant level," McGill said.
Though companies such as Mixx and Qloud are counting on one day attracting advertising dollars, there's slim evidence the audience-growing strategy that worked for YouTube will be successful for others.
"A lot of people are saying, I'm just going to aggregate a very large audience and make billions of dollars," said Bronner, the venture capitalist. "You've got to really focus on what you're going to do better than anybody else on the Web. That's a very difficult question and most people can't answer that."
But the people who need money to start companies say that cautionary sentiment is holding back the Web 2.0 community.
