Unsocial network: The rise and fall of iWiW

iWiW still has 4.7 million users, according to Origo.hu, part of the company that now owns it. While this might technically be true, since most people don’t bother to delete their accounts, nowadays only a fraction of them regularly visit the site. When I do sometimes check my own account with about 700 contacts, either nobody is online or only one or two of them. My friends – those who still bother to use iWiW at all – have similar experiences.

Invitation only

When iWiW first launched, people couldn’t just register an account, they had to be invited by somebody else who was already a member. Theoretically, this kind of “elitism” could lead to the quick death of such an ambitious project, but in this case it proved the exact opposite. “Within less than a week, people unknown to me started to appear in the system,” recalled Zsolt Várady, the founder of iWiW, in an April 2012 interview with Origo.hu. “They were the friends of my own friends so they weren’t complete strangers either. A month after the start, we gathered at my home with 16 close friends to plan the site, because with the extreme expansion of iWiW’s user base it became clear that this would be something huge.”

What was the business model behind iWiW? At first it wasn’t a planned model at all; indeed, there were even ideas to make it a completely non-profit application. “Then I changed my mind and wanted to make a profit-oriented enterprise. Others convinced me that web development is not like a pyramid where the work of many free volunteers will make something big. There must be a significant number of professional developers behind it, and many months of planning and actual work was also required, which would be impossible on a non-profit basis. On the other hand, I wanted to guard the possibility to make a business from iWiW later,” Várady said.

Operating by donations

The question Várady now faced was how to bring in the money? He quickly rejected the idea of the usual ad banners, wanting something special, like Zuckerberg at the dawn of the Facebook era. “We actually had those special kinds of advertisements in the field of cultural events and cultural parties, but it did not really work out financially. So we learnt that, while it was easy to proclaim that there will be no lame banners, we were still faced with several thousands, then later millions of users, and such a big server cannot be operated anymore just out of coolness and for free,” said Várady.

This lack of a business model for iWiW explains somewhat why Facebook could expand its user base a lot faster – first in the United States, then overseas and in Hungary as well. While Zuckerberg had lots of possibilities for how to make money from his site, and thus could develop it faster, Várady operated from donations. “We could gather about HUF 132,000 from users, which was rather cool, but the equipment which we needed would still cost about HUF 1 million. There was a user who divided this price of 1 million with the actual number of iWiW users and sent us the exact amount of money which was “due” from him: HUF 58,” recalled Várady.

Life is “like”?

In 2006 Magyar Telekom bought iWiW for €4 million. While some people were shocked that the independence of iWiW had been compromised, along with the privacy of its users, which had been “given” to Telekom, others were relieved that with the financial support of the telecoms giant behind it, iWiW could finally develop the site extensively. “I don’t understand why users are concerned about their privacy being compromised. T-Online (a subdivision of Telekom) has to keep up with the Hungarian privacy laws as well, and we always did so with Freemail and Origo,” György Simó, a former deputy CEO of Magyar Telekom, said at a press conference at the time of the purchase.

Sure enough, privacy concerns were quickly forgotten, but really useful changes to iWiW never materialized either. The website’s management failed to realize that it had to take clues from the new kid on the block: Facebook. While it would still take a couple of years for the American interloper to gain its foothold in Hungary, it was already clearly superior as far as possibilities, functions and user interface went. Várady only mentions the “like” button as a fundamental new function, but Facebook had a substantially better developed communication system already, with a central “wall” where every user could post comments, and a multi layered privacy system as well. (On iWiW, automatically everybody could see all data from every other user, while on Facebook users could manage the layers of how much data was given away about them.) Then there were the useless but funny Facebook applications, and the Facebook games, of course. While iWiW tried to mimic some Facebook functions (especially the games), it failed miserably and even drove people to give up on iWiW.

“Wi Will, Wi Will” spam you!

So iWiW became somewhat boring and clumsy, but it was still somehow likeable. Lately, however, incredibly annoying and obtrusive spam messages have flooded users; it is still extremely easy to send to any other user and there aren’t any filters at all. While Facebook filters spam in such a smart way that we won’t even see offending items, on iWiW you constantly receive email messages saying something like “István sent you a message”, where this “István” guy is actually a spam account which sends you all kinds of unwanted and useless advertisements. This is the result of the free registration change: since now anybody can register an iWiW account, it’s extremely easy to send spam to a large number of people. This has finally led some users to actually unsubscribe from iWiW; until this spam wave, even with Facebook’s rising popularity, most users just left their accounts dormant.

“We are constantly working on finding a solution to the spam problem,” Gergely Kovács, product and business development manager at Origo (who also has responsibility for iWiW) told the Budapest Business Journal. “Lately those kinds of activities have multiplied and we have already found some solutions that were applied and we will search for more solutions in the future. We hope that these will be successful but you have to understand that it’s the usual cat and mouse game,” Kovács added.

Using the database

What can be done to save iWiW? Well Magyar Telekom has to find a solution regarding the spam, and also try to lure back its active users somehow. However, the company is set to fire about 500 people by the end of 2012, and it’s hard to believe that it will concentrate on iWiW.

“iWiW’s true value lies in its huge user base. It still has many users: two million people per month are using the site. Hence, we are constantly working on projects that use iWiW’s database and infrastructure, such as the klapp.hu dating site, which has achieved great success in a short time. It has about 40,000 registered users and the number continues to grow,” Kovács tells the BBJ. True, klapp.hu seems to be a success, but while it’s in the user interface of iWiW, it’s actually linked to the dating site itself, and can hardly be called a revolutionary new and interesting “feature”.

And what of Várady? He has quit the management of the site he founded and now lives in Berlin, working on high tech electronic devices. “Last summer I used Facebook for three months, then unsubscribed from it, because I got bored of it. The information flow is too intensive and I couldn’t keep up with it,” the Hungarian says. Almost a billion active Facebook users don’t share Várady’s view, though, and iWiW has to be woken from its coma, if Telekom don’t want it to forgotten forever.

Gergely Herpai