Success rates high with SMS-Internet scheme

  • 2004-01-15
  • By Justin Petrone
TALLINN - In the summer of 2001, the dot-com boom that had generated thousands of high-paying jobs for young entrepreneurs with technical savvy supposedly gasped its last breath. The same young entrepreneurs once courted by big-talking start-ups and offered astronomical salaries quickly found themselves unemployed and the promise of the Internet broken.

Andrei Korobeinik was one of the many who had eagerly entered that boom expecting a big reward only to be disappointed. Unlike many others, however, he has been able to reassess the Internet market to make it work for him.
Since launching, an online community that revolves around users rating one another's photos, nearly two years ago, Korobeinik has quickly found his modest Web project a huge success.
While other popular Estonian online communities like,, and, have generally stagnated in terms of users in the past year and a half,, has experienced a rather dramatic surge. The site itself boasts that as of today there are more than 200,000 users, making one out of every five Estonians a user. Active users, claims Korobeinik, browse the site for up to eight hours a day, and big companies, like Hansapank, which rarely make forays into Internet advertising, have bought Web banners to attract the audience.
The revenues for have also landed the company at the top of the list in Estonia. The main form of income for the Web site has come in the form of 10 kroon (0.64 euro) SMS messages, sent to by users to boost the approval ratings of their online friends. In all there is a monthly turnover of 100,000 kroons from SMS messaging, with half the amount going to the communications companies who provide the services.
" is the only large project that has appeared on the Internet in Estonia in the past few years," says Korobeinik.
"In Estonia there's nothing like, and the community propels its own success. The more people we get, the more people want to join," he adds.
The ability to rate other people's photos, combined with other features like e-mail and horoscopes, has proven so enticing that half of Estonians aged 15 to 25 are regular users, according to Korobeinik.
"It's not just rating pictures. When you become a user you can meet new friends, find lost friends, and so on. These kinds of online communities are becoming very popular around the world right now," he says, citing similar popular projects such as, a social networking site in the United States.
The amount of concentrated attention that receives has also lured major Estonian advertisers back onto the Internet.
"No one wants to take a risk these days - it's not like three or four years ago. Companies just started to realize this past fall that it is effective to advertise on the Internet," Korobeinik says.
Not that Korobeinik would need to advertise himself. Since its inception has had no advertising budget. With no more than 200,000 kroons of his own computer equipment he has been able to keep the site up and running, only enlisting the help of Andri Kiige in the past year to help with content writing, banner construction and Web event organizing.
"From the very beginning there were quite a lot of users. I spent nothing on advertising - even now the promotional money is zero," he says.
The only real efforts the team puts into its site is constantly updating the content in order to keep up the site's usability, including a new feature that will allow users to personalize the Web page to their liking.
Still, when it comes to companies using solely the Internet to make money, the team has a virtual monopoly of the Estonian market and must endure a silence that is not exactly golden.
"It is hard to be the leader when the market is dying," says Korobeinik.
Of the top five Web companies in Estonia today,, with its popular SMS rating scheme is the only one making a considerable profit.
"Right now Internet businesses are relatively weak. The other companies have not been modernized," Korobeinik says. Still, he thinks things will turn up for the market soon.
"New companies will most likely appear in the future. Every second Estonian uses the Internet, so there is a good market in Estonia," he says.