You don't have to read the latest IDC research report to know that blogs, social networks, gaming portals and other social media sites are taking off. It is also well documented how traditional advertising approaches are not producing results commensurate with the popularity of these sites.

Everybody is looking for that "magic formula" of how to cooperate with blogs and social media services. They are preaching engagement and cooperation and dialogue with consumers...but then turning around and taking it upon themselves to divine a marketing solution. We say if you are going to engage...then engage. It's really not that complex, make bloggers and social media participants your marketing partners...they will figure out how to make the most out of their particular medium. It was out of this idea that the Xchange™ was born.

The Basics

At its most basic level, the Xchange is an open, web-based marketplace that allows: (i) sellers of any good or service and (ii) any entity or individual that wishes to promote any such good or service, to collaborate directly for mutual benefit.

A seller (or "merchant") can create marketing campaigns around particular products or services and publish these campaigns on the Xchange. As part of the campaign, the merchant stipulates (among other things): (i) how it will compensate promoters (or "affiliates") and (ii) the creatives and other promotional materials that affiliates can use in conjunction with the campaign. The Xchange enables a merchant to chose to compensate affiliates based on impressions, clicks, lead submissions, actual sales and/or any other actions defined by the merchant. The Xchange also supports a wide variety of creative formats, including text, image, html and multi-media formats.

Affiliates can browse or search the campaigns available on the Xchange. Upon finding a product or service relevant to her interests, an affiliate can download the creatives and other promotional material directly from the Xchange. Xchange creatives may be safely placed on most standard blogs and social media services, including Facebook, Twitter, Plurk and many others. The Xchange then tracks all actions (be they impressions, clicks, leads, sales or other) that are attributable to the promotional efforts of the affiliate. We report these statistics to both the affiliate and relevant merchant in real-time. Compensation due to the affiliates by the merchants is calculated based on these statistics.

Of course, the Xchange offers much more...but those are the basics: merchants are free to design campaigns how they want and affiliates are free to choose which campaigns to promote. Market dynamics work to move campaigns to the channels where they will reap the highest return (i.e., be the most effective).

Currently, the Xchange is available in Traditional Chinese and focused on the Greater China market. (We expect to launch the Simplified Chinese and English versions in the not too distant future.)

The Bonuses

We think our network is pretty special for many reasons. Here are a few of the reasons we feel the Xchange will outperform other online marketing platforms:

• API suite. In addition to all the functionality on-board on the Xchange, we can open our functionality to other websites/services via our suite of API's. Content and campaigns from each custom-built platform further enhance the central Xchange.
• Network-of-networks. Beyond API's, we can create entirely separate node networks. We can connect any one of our individual node networks (whether they be in China, Taiwan or elsewhere) with each other. This allows us to create separately branded (and operated node networks) but retain the ability to cross-publish campaigns and content if we wish.
• Internationalization/localization. Our standardized architecture enables us to publish to and from over 250 other networks worldwide. Through the Xchange we can bring Western companies, products and services to Asia and vice versa.
• Group permissions/taxonomies. Our system design is such that it "knows" the membership level of each person that logs onto the Xchange. This foundation will allow us to present increasingly customized experiences to different groups and/or individuals going forward.
• Scalable, open-source components. To the extent possible, the Xchange uses open-source components thus keeping development costs to a minimum as our business scales.