Hearst, McGraw-Hill Invest In Social Network For Grown-Ups - InformationWeek

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Hearst, McGraw-Hill Invest In Social Network For Grown-Ups

Gather.com says it's a social networking site for "highly educated" adults. In a twist on social networking, the company pays users to contribute content.

Hearst and McGraw-Hill, traditional media companies looking to keep their brands in front of readers as they move to the Web, invested in Gather.com, a social network that targets highly educated adults.

Hearst and McGraw-Hill, along with Pilot House Ventures, were the primary investors in a $10 million third round of financing, Gather.com said. The company will use the funds to build partnerships with media companies, and for international expansion.

Hearst and McGraw-Hill will publish content from their publications on the site. "We are now looking at the right way to get started working together for their benefit and ours," Thomas Gerace, founder and chief executive of Gather.com, said.

Gather.com markets itself as a social network for a "highly educated, higher informed adult audience," the same demographic attracted to some of Hearst's and McGraw-Hill's publications. Hearst publishes a dozen newspapers, including the San Francisco Chronicle and the Seattle Post-Intelligencer; as well as magazines, such as Esquire. It also own TV and radio stations. McGraw-Hill publishes BusinessWeek magazine, and also owns TV stations.

Gather.com introduced a twist to social networking by offering to pay users for contributing content to the site. Top contributors can earn cash, while others are paid in points, which can be traded in for merchandise from partners.

Gather.com's focus on user-generated writings is another example of how Internet services are offering an alternative to traditional media. Other examples include blog services that have introduced a new form of citizen journalism.

"Hearst recognizes the trend that audiences are increasingly consuming content created by people," Kenneth Bronfin, president of Hearst Interactive Media, said in a statement. "With Gather.com, we are moving to capitalize on this trend by bringing our financial resources and media expertise to further accelerate the growth in social media."

Founded in December 2004, Gather.com launched out of beta this year. The company has 122,000 registered users, and is projecting that number will double by the end of the year. Almost three-fourths of the users are from 30 to 59 years old and have a college education.

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