'Anti-Facebook' social network Ello gets viral surge

In a matter of days, the new social network Ello, described as the "anti-Facebook (NasdaqGS: FB - news) " for its stand on privacy and advertising, has become perhaps the hottest ticket on the Internet.

Created last year as a "private" social network, Ello (www.ello.co) recently opened its doors on an invitation-only basis.

Because of the limited supply and strong demand, the invitations have been selling on eBay at prices up to $500. Some reports said Ello is getting up to 35,000 requests per hour as a result of a viral surge in the past week.

Ello appears to have caught on with its simple message which seems to take aim at frustrations of Facebook users.

"Ello doesn't sell ads. Nor do we sell data about you to third parties," the company says.

Its "manifesto" states: "We believe a social network can be a tool for empowerment. Not a tool to deceive, coerce, and manipulate -- but a place to connect, create, and celebrate life. You are not a product."

Ello's policy states that the practice of collecting and selling personal data and mapping your social connections for profit "is both creepy and unethical."

"Under the guise of offering a 'free' service, users pay a high price in intrusive advertising and lack of privacy."

Based in Vermont, Ello was launched by a group of artists and programmers led by Paul Budnitz, whose previous experience include designing bicycles and robots.

Budnitz says on his page that Ello was designed to be "simple, beautiful and ad-free."

- 'Different politics' -

Nathan Jurgenson, a social media researcher at the University of Maryland, welcomed Ello's fresh approach.

"I love these moments of new social media when conversation explodes, moved to imagine how social media can be different, questioning core assumptions instead of just fretting and complaining -- all before this paint even dries," he said on his Ello page.

"Ello is getting so much attention precisely because it promises social media of a different politics. We?ve collectively come to the realization that the rise of social media has been accompanied by handing far too much power to far too few people, and there?s energy to shake things up, even if just a bit."

Ello's rise also comes amid complaints against Facebook from the gay community that the world's biggest social network began disabling accounts using stage names instead of real names.

A San Francisco protest is planned against Facebook supporting "drag queens" who lost their Facebook accounts. Ello does not require real names.

- Business plan? -

It remains unclear if Ello will end up being a flash in the pan, or if it will develop a profitable business plan.

Ello states it plans to remain "completely free to use," but that it could start offering some premium features for a fee.

Some question if Ello can succeed on this kind of model and keep its principles.

But former Ello collaborator Aral Balkan said Ello has already been compromised by taking $435,000 in venture capital funding.

A designer and founder of ind.ie, a privacy advocacy group, Balkan said he worked briefly for Ello but left when he learned of the venture investments.

"When you take venture capital, it is not a matter of if you're going to sell your users, you already have," says a blog post from Balkan.

"It's called an exit plan. And no investor will give you venture capital without one. In the myopic and upside-down world of venture capital, exits precede the building of the actual thing itself. It would be a comedy if the repercussions of this toxic system were not so tragic."