Top Digger launches Tip'd: Niche social media with a niche business model

Cyndy Aleo-Carreira — Tue, 14 Oct 2008 06:20:07 -0700

There are some names associated with social media sites that most users would recognize, and Muhammed Saleem is one of them. Known as one of the most influential users of the news aggregation site Digg, Saleem is one of four co-founders of a site launching this morning: Tip'd. The new site is yet another social media site, but focused on a specific niche (financial news), and bootstrapped with no outside funding.

Tip'd is launching at a time that's both fortuitous and treacherous: With the current state of the global economy, interest in financial news is surging. At the same time, as investors become more cautious and companies cut back on expenses like acquisitions and advertising, it may be tough going for a start-up.

However, Tip'd has an ace up its sleeve: It's launching at a time when yet another Digg user protest is underway, with many users upset about the banning of long-time and well-known Diggers.

The most obvious question for Saleem is how he got involved in a start-up that's a competitor to the site where he's spent so much time and effort. Saleem replies,

"I got involved with Tip'd because I believe that the site's focus on one niche/vertical, given the global economy and the elections here in the U.S., is perfect. I think sites like Digg and Mixx give you an okay general purpose overview, but they hardly give you a comprehensive picture of what's going on."

He went on to compare the forecast for Tip'd:

"Niche social media as an investment: The problem with most social media sites is, they accept too much funding (e.g.: Digg), and then can't monetize their low-value audience well (again: Digg). This makes it hard to make money by investing in social media.

"First, the investment was small (~$25,000), so we don't need a $100M valuation to be a success. Secondly, we're picking a niche (investing) where the audience is actually valuable ($10-50 CPMs is normal for investing Web sites vs. $.50 CPM on other social sites)."

The business plan for Tip'd is to begin advertising in three to six months, after building a community. Saleem and his cofounders are focused on long-term growth and sustainability, and may have the industry knowledge and skills to be a success. What remains to be seen is whether the Web needs or wants one more social media site, even as timely as Tip'd seems to be.