The market for physical real estate may be shaky. But one market for virtual real estate, confoundingly, continues to thrive, despite its entirely evanescent foundation. In Weblo, entrepreneur Rocky Mizra has developed a magical land. It's a place where people buy virtual property for outrageous sums — as much as $53,000, so far — with the hope of flipping the property for even more. But the "property" in question doesn't even have a virtual existence. At most, buying an address on Weblo gives you the right to put up a Web page describing the property. It's as if someone came up with a market, not for real estate, but for real estate listings.
Weblo is no Second Life; there's no 3-D world to which you can send an avatar to inspect your virtual holdings. Instead, it's like a MySpace profile page crossed with a real-estate brokerage website. Sadly, a Washington Post reporter, instead of puncturing this bubble, ">buys into CEO Mizra's visions. The result is a glowing overview of this unreal unworld, which now has 50,000 members. The most critical moment comes when a Weblo investor asks, rhetorically, if Weblo is "sustainable."
Of course it isn't. The Post fails to note Weblo's screwy economics. Weblo's Mizra pitches the company as the game of Monopoly on steroids. Properties, instead of being supported by rents or other sources of profit, are worth only as much as people are willing to pay for them. It's true that Weblo shares advertising revenue with its users, but most make a handful of cents. "You can't value things simply on the ability to sell them to someone else. I don't know what's going to drive the audience," JupiterResearch analyst Barry Parr told me this spring, when I wrote a piece on Weblo for Business 2.0. Mizra still doesn't have an answer to that question — not that the Post bothered to ask.
