Newest Social Network is giving its shares away to first users.

Could the next Facebook be built by giving the company away? 


The new ultra-viral invite-only Zurker.com thinks so, and its CEO is betting the company on it!  To get an invitation to join, and claim your name in its URL (this helps your name's SEO rank), then click here:


http://j.mp/zurkerinvite



Nick Oba, Zurker.com's founder, really believes in users.  In fact, this serial entrepreneur, whose user-content driven online magazine failed to takeoff in 2010, decided to up the ante with his next company, Zurker.com and this time, instead of catering to the venture capital crowd chock full of some of the richest in the world to build support for his upstart, he's instead betting the company on a novel system to get the company the mass it needs: he's giving the company away to its early users, for free.


The logic goes something like this: Facebook.com and other social networks like it spend upwards of $20 per user in marketing fees alone.  Nick Oba believes that if the Zurker platform is great, and and its users had just the extra incentive to pass word along after giving it the thumbs up, then Zurker can skip the Seed and Angel round of investing entirely.  Typically social networks like Zurker give away most of their company selling stock to early investors in order to raise the millions of dollars typically needed; money that's used to build a large enough user-base.  Once that base is built, it's usually leveraged to attract even more venture investors and cash (where then the company needs to sell even more shares, albeit typically for a far higher price per share).  


Zurker's bold plan will instead offer that first big chunk of the company to its users in the form of "vShares", each share representing a contract of ownership interest in the underlying company.  This, in Zurker's CEO's mind, will give its users enough incentive to keep perpetuating word about the company, allowing Zurker to reach the critical mass of users it needs to raise big money cheaper, and altogether bypassing the need to raise cash at what is typically the most expensive time: the very beginning.


According the the numbers published on Zurker's site, valuations of these initial 1,000,000 "founders shares", once they reach just 500,000 users, could be equivalent to $10 per share.  The numbers get even more interesting however when you compare the potential values of Zurker to companies like Myspace (in which case Zurker vShares would worth roughly $580/share), or Bebo.com, which would value vShares at roughly $800.


If allowed to fantasize, what would the valuation of Zurker be if it were the next Facebook?  Try roughly $50,000 per share!


So what happened?  


Well, as of the last week in March 2012, we still have to wait and see.  The company is presently in it's "Alpha stage, pre-issuance"; which means as soon as the full one million vShares purposed for users have been given away, then "Zurker will be restructured as a public corporation and vShares will become real shares" Zurker explains on its vShares page.  A copy of the vShares page can also be found below. 


If that weren't bold enough, Zurker has gone so far as to create a system that grants full access to the company's books.  This is available to vShares stakeholders and the public alike on Zurker's "Open Books" page.


Zurker's CEO, Nick Oba, is implementing a very bold and innovative idea whose time may have come.  If he's right, then that could mean the obscene fortunes made by New York and Silicon Valley in their dominance over Seed and Angel Financing stages (of once fledgling companies like Google and Facebook) are in decline.  And if Nick Oba is right, then Zurker will likely soon have about a million owners with many reasons to be glad he is.