Group.me

Private social networks: Connecting in smaller groups

March 11, 2011: 5:00 AM ET

A new wave of social networks aims to shrink the number of people in your circle.

The latest web fad? Private social networks. A growing number of services let users connect in smaller groups often around specific events. With Path, for example, you're only allowed 50 friends; the goal is to share more intimate life details -- kids' pics, a tasty breakfast -- with a more controlled group of people -- maybe just your girlfriend and your sister. New services are sprouting up for everyone: NYC moms calendaring playdates? Try RedRover. Hunters wanting to chat in text message groups? Try Group.me.

The time is right for these networks to take seed. Smartphones are nearly ubiquitous. With app stores, entrepreneurs can look beyond advertising to make money. As technology costs plummet, these services are less expensive to launch. And Facebook has made users comfortable sharing things online.

But many are attracting substantial investments even before users have fallen in love with them. Path, which only launched in November and has just "hundreds of thousands" of users, has accepted $11.2 million in funding so far and reportedly turned down a $100 million buyout offer from Google (GOOG). Photo-sharing service Instagram, which has amassed 1.75 million members since its October launch, recently took $7.5 million.

Will any of these services thrive? With more than 500 million members and the most talented engineering staff in Silicon Valley, Facebook could likely replicate or buy many of these services if they seemed like promising businesses. Users could tire of them just as they tired of earlier social networks like MySpace and Bebo. But for the moment, they're all the rage.

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