MySpace for Millionaires

MySpace for Millionaires

Networking Sites
For Rich Hit Bumps;
Avoiding the Hicks
November 30, 2007; Page W2
THE WEALTH REPORT

By ROBERT FRANK

   

Who says money doesn’t buy friends?

[Wealth Report]

A new crop of online social-networking sites has taken
aim at the rich, seeking to create exclusive Web communities of
like-moneyed friends. The sites — essentially MySpace for millionaires
— promise safe havens for the affluent where they can flirt, swap
advice, plan parties and find new pals without mixing with hoi polloi.

The sites — the best known is aSmallWorld.net
— borrow many of their rules from blue-blood social clubs. People must
be invited to join. Membership decisions seem to be based on an
applicant’s education, job title and connections, since it’s difficult
to verify wealth levels. Those who engage in improper behavior, like
trying to mingle with strangers or sell products too aggressively, are
kicked out.

On the surface, the sites seem like a winning idea.
Social networking outposts have exploded in popularity, while the
number of millionaires and billionaires is also surging. Since wealth
likes to be with wealth, the rich often seek out networks to help them
with everything from vacations and parties to managing money and making
business contacts. What’s more, the sites host frequent member events,
like jet rides, vineyard tours and sailing trips, sponsored by high-end
corporate partners.

 

Yet getting the rich to mingle online, it turns out,
isn’t so easy. Today’s wealthy, aside from being intensely private, are
so pressed for time and overloaded with existing social commitments
that they may have little interest in trolling the Web for new pals.

What’s more, while the sites claim to be exclusive,
they’re opening their doors wider and wider to please advertisers and
investors, who often prefer quantity over quality. And the sites can’t
ensure that all their members are what they say they are, despite
verification systems from fellow members and the sites themselves. All
this has rankled some members, who say the sites have become simply
well-dressed Facebooks.

"It’s very difficult to build a network based solely
on wealth," says Stephen Martiros, a managing director of CCC Alliance,
a coalition of rich families based in Boston. "You might start with a
few wealthy people, but as you grow it eventually reverts to the mean.
And once that happens, the wealthy leave. If you have one guy worth
$100 million sitting at a table with a guy worth $1 million, only one
of them is going to be excited to be there."

Take the recent experiences of aSmallWorld. Launched
in 2004 by Swedish banker and globetrotter Erik Wachtmeister,
aSmallWorld has more than 250,000 members. Weinstein Co., owned by
movie moguls Bob and Harvey Weinstein, bought a stake last year, giving
it added cachet. Joe Robinson, the company’s CEO, says aSmallWorld is
aimed at tastemakers, social connectors and the migratory rich, who may
want to meet up in Scotland for golf or Paris for dinner.

Prospective members have to be invited to join by
another member. Rules state that members aren’t allowed to "annoy,
harass or unreasonably disturb members, or try to connect to members
with whom you have no previous contact."

The site’s classified ad section reads like a
billionaire’s yard sale: "For sale — Caviar Servers and Horn Spoons."
"For Sale $2.8 million Tsavorite gemstone." "Bugatti Veyron, Black,
2006. 1.1 million Euros."

This week’s hot topics in the forums included "Best
Fencing Clubs in the world," "Surfing in Gstaad?" and a discussion of
lobster-abuse in St. Tropez. (One member recoiled at watching them
boiled alive.) Another asks: "If you had $20 million where would you
invest it now, given the subprime crisis?" (Members advised commodities
and cash.)

Yet aSmallWorld’s fast growth — membership doubled
over the past year — has taken a toll. Some early members complain
that the site is being overrun by spammers and riffraff. Membership
invitations or passwords to the site can be purchased easily and
cheaply — though in violation of the site’s rules — on eBay or other
online invitation sites, members say. (Mr. Robinson says he quickly
shuts down membership sellers.) And some complain of strangers hawking
products.

One member recently posted the question: "Is it just
me, but lately I see people on ASW who really shouldn’t be there. Who
invites these people? We should be selective who to invite. What about
quality control?" Another member wrote: "In the real world, we are each
discerning about who we make friends with, who we socialize with. There
is no reason why when we come online we should have to socialize with
truck drivers etc. from hick parts of the USA."

A Geneva member wrote: "One of my friends, a funny
old-timer here, told me that the site has lowered so much its level,
that she has invited her maids."

Mr. Robinson says the site maintains its "trust and
word of mouth" by allowing only about 15% of its members to invite new
members. As for whether the site has become too common, he says that
while some members prefer the old days, a much greater number
appreciate the benefits of a larger network.

"We pay attention to our growth with vigilance," he says. "I don’t take it lightly."

A new site, Diamond Lounge, will also target the
elite, but promises to avoid aSmallWorld’s growth pains. Founded by
Arya Marafie, a British entrepreneur and former marketing executive,
the site has 5,000 applications but will launch with no more than 500
members, Mr. Marafie says. Members must be invited to join by a
three-person membership committee and have to pay $60 a month in dues.

Mr. Marafie has modeled Diamond Lounge on "Fifty," a
gentlemen’s club he belongs to in London. And since he owns the site,
Mr. Marafie says he will let the members (rather than advertisers and
outside investors) decide the site’s future. While he insists members
will be chosen for being "interesting," rather than just wealthy, he
says most of the applications from the U.S. highlight net worth.

Sheikh Majed Al-Sabah, a prominent Kuwaiti who owns a
Middle East fashion retailer, is a member of both aSmallWorld and
Diamond Lounge. He says he joined the Lounge hoping for a more
"exclusive" experience. Still, he says, he’s getting some of his most
valuable contacts and feedback for his business from a much broader
networking site: Facebook.

"It’s strange, but a lot of my friends are joining
Facebook," he says, adding that "I get feedback from people who
normally wouldn’t have access to me."

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