Microsoft Spins Out a Wallop

SAN JOSE, Calif. — April 25, 2006 — Microsoft Corp. today announced the spinout of a new social networking technology, developed by Microsoft Research, to create a new Silicon Valley startup, Wallop Inc. Wallop, whose aim is to deliver the next generation of social computing, is led by experienced entrepreneur and CEO Karl Jacob, with 30-year veteran Bay Partners providing Series A financing.

Microsoft IP Ventures will celebrate its one-year anniversary next month. “We’re excited by the interest it has attracted with entrepreneurs and the venture capital community,” said Eric Rudder, senior vice president of Technical Strategy for Microsoft. “Microsoft has one of the world’s preeminent R&D labs, and we are committed to getting our innovations into the hands of entrepreneurs. This deal is another great example of Microsoft working with the right team to get this next-generation technology into the marketplace quickly.”

“Our access to industry-leading technology through the IP Ventures program has led to a golden opportunity for Wallop to change the face of social computing with differentiated technology and unprecedented support,” Jacob said. “I feel fortunate to be working with Microsoft again and hope other entrepreneurs are taking note of the opportunity afforded through IP Ventures.”

“What is exciting to us is Wallop’s vision to turn social computing on its head and significantly change how we look at this sector,” said Eric Chin, venture partner at Bay Partners and now member of the Wallop board. “There is no question that with a talented management team and innovative technology, Wallop is well positioned to take the market by storm.”

Wallop Advances Social Networking

Launching later this year, Wallop solves the problems plaguing current social networking technologies and will introduce an entirely new way for consumers to express their individuality online. For example, today’s social networks have difficulty enabling people to interact in a way similar to the way they would in the real world. Wallop tapped legendary Frog Design Inc. to conceive a next-generation user interface enabling people to express themselves like never before. In addition, Wallop departs from the friend-of-a-friend model common in all social networks today and the root of many of their problems. Instead, Wallop developed a unique set of algorithms that respond to social interactions to automatically build and maintain a person’s social network. 

Innovative Program Connects VCs and Entrepreneurs With Microsoft Innovation

The dynamic IP Ventures program was launched in May 2005 to enable Microsoft to expedite new innovations from its multibillion-dollar research and development investment into the marketplace and seed business development. Through IP Ventures, venture capitalists (VCs), entrepreneurs and small businesses have a unique access point to Microsoft innovations. The program is available globally and now offers more than 30 technologies.

Microsoft expanded the IP Ventures program in January 2006 to include collaboration with governments and public-sector development organizations. The IP Ventures program is also closely integrated with Microsoft’s Emerging Business Team to provide resources to the VC community.

About Wallop

Wallop Inc. is led by Karl Jacob, a veteran entrepreneur who has been building and advising companies for the past 14 years. During his career he has raised over $200 million (U.S.) from prestigious investors and has built four companies, taking them from no revenue to significant revenues or to acquisition. The remaining companies are profitable and generating in excess of $120 million in revenue per year. For more information, visit http://www.wallop.com.

About Microsoft

Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.

Microsoft is a registered trademark of Microsoft Corp. in the United States and/or other countries.

The names of actual companies and products mentioned herein may be the trademarks of their respective owners.

Note to editors: If you are interested in viewing additional information on Microsoft, please visit the Microsoft® Web page at http://www.microsoft.com/presspass on Microsoft’s corporate information pages. Web links, telephone numbers and titles were correct at time of publication, but may since have changed. For additional assistance, journalists and analysts may contact Microsoft’s Rapid Response Team or other appropriate contacts listed at http://www.microsoft.com/presspass/contactpr.mspx.