Friday, August 8, 2008

Spire spots its target: wealthy web users

By Christopher Calnan

A startup has plans to carve a niche for itself in the crowded world of social-networking websites by following the old adage of going where the money is, targeting affluent Internet users.

Spire Inc., which last month closed a $9 million Series A round of venture funding, plans to rise above the competition by cutting co-marketing and distribution deals with vendors of high-end products and hotel operators. The company also plans an investment in search engine optimization, said CEO Janet Kraus, who co-founded Circle Co. Associates Inc., an online concierge service from which Spire was spun out.

Spire targets members with an average annual income of more than $250,000 and assets of more than $1 million. Creating a website may be cheaper than years ago, but expectations are much higher, Kraus said.

“You can’t just throw it out there,” she said. “In our space, we wouldn’t get away with that.”

To date, Spire has built a list of 60,000 member names, some attracted through joint marketing and some acquired. It has also attracted investments from New York-based Hearst Corp.; Trident Capital, which operates an office in Westport, Conn.; and TL Ventures, which operates offices in Pennsylvania and California.

Spire generates revenue through advertising. But Kraus is considering adding a paid subscriber-only version of the site.

Competitors include Diamond Lounge Ltd., a London-based operator of a social networking website for the affluent, and New York-based ASmallWorld Holdings Inc., which operates asmallworld.net.

The affluent are under served by conventional websites, said Spire board member Peter Meekin, managing director of Trident Capital. Spire “is not a big, horizontal (business) play, but the demographic they’re targeting is highly desirable,” he said.

Subsequent to last month’s funding, Spire acquired for an undisclosed amount Suzanne’s Files LLC, the operator of a website offering travel tips and other suggestions. Suzanne’s Files founder Suzanne Aaronson joined Spire as part of the deal.

Spire member Marla Aaron, a New York-based marketing executive, joined earlier this year to trade shopping and travel tips.

“I don’t socialize with other members,” she said, “but I’m interested in their opinions because their lifestyles mirror my own lifestyle.”