In the social media industry, nothing is more laudable in theory and less successful in practice as the quest to create a more privacy-conscious alternative to Facebook.

In recent days – even before the service officially launches to the public – a new social network called Ello saw a massive influx of both users and media attention. The new site, which allows users to sign up without using their real names, is capitalizing on a growing backlash against social media sites that demand users sign up with real-life identities.

“Your social network is owned by advertisers,” Ello’s creators say on the site’s “Manifesto” page. “Every post you share, every friend you make, and every link you follow is tracked, recorded, and converted into data. Advertisers buy your data so they can show you more ads. You are the product that’s bought and sold.”

The site claims to counter this business model by offering no ads and not selling user information to third parties. Ello also lets users opt out of information-sharing, meaning the site won’t collect information about how they use the social network.

But even as it has garnered attention – and tens of thousands of new users – over the past couple of months, Ello is only the latest in a slew of social networking sites that have sought to capitalize on user discontent with sites that demand real identities. And so far, none have put a meaningful dent in Facebook’s billion-strong user base and overall dominance of the social networking world.

“If we’re trying to make the argument that Ello is the beginning of the end of Facebook, I think we’d have a very hard time doing it,” said Sidneyeve Matrix, an associate professor of media at Queen’s University. “But I think there’s a niche out there for smaller groups of users.”

Broadly, the battles over a user’s right to use whatever name they wish online are called the “Nymwars.” Many major social networks, such as Facebook and, until a recent policy change, Google Plus, asked users to create accounts using their real names, rather than nicknames or pseudonyms. Many social networks claim that this policy makes users accountable for the content they post and helps cut down on fraud and other malicious practices.

But the policy is also advantageous from a business perspective. It allows the social networks to identify real people with their content and preferences, creating a fuller picture of each user that can then be exploited for advertising purposes.

Many users have fought back against such policies. Political dissidents and civil rights activists, for example, argue that attaching their real name to a social media account may put them at greater personal risk. Other users maintain they would like to draw a line that demarcates their real life from their digital identities.

The most recent Nymwars spat occurred this month on Facebook, after the social network began suspending the accounts of drag performers who had registered under their stage names. Many members of the lesbian, gay, bisexual and transgender communities argue that the Facebook real-name policy is especially damaging to them – so much so, that some have begun leaving the social network entirely.

Ello, in turn, is capitalizing on that exodus. The site doesn’t require users to register with their real names and claims it will never take advertising revenue. Ello also appears to have far fewer restrictions on the kind of content users publish.

The website is the brainchild of designer Paul Budnitz. Previously, Mr. Budnitz founded a bicycle company called Budnitz Bicycle and a toy company called Kidrobot. Originally intended as a community for artists and designers to share their work, Ello was built by a team of fewer than 10 people.

Instead of selling advertising, the Burlington, Vt.-based site aims to make money by offering various special features and functionality to users, who can pay a one-time fee to add the features to their accounts. The business model is in some ways similar to “freemium” mobile and web-based games, which can be downloaded and played for free, but offer all kinds of add-on perks for a price.

However, Ello’s sudden burst of popularity has raised serious questions as to whether such revenue sources will ultimately be enough to sustain the site financially.

More importantly, Ello’s turn in the public spotlight seems to have caught even its creators by surprise – the site’s privacy policies and terms of use, while heavy on pro-user language, are light on specific details. The site’s creators did not respond to a request for comment.

“It’s unfortunate for them that they took off at this point,” said Alexandra Samuel, vice-president of social media at Vision Critical, a Vancouver-based market-research technology provider. “It’s like planning a New Year’s eve party and … you accidentally invite everyone on December 30 – they’re just not ready yet.

“Issues like privacy and ads might be wedge issues, but [users are ultimately] only going to relocate if they think their new home is going to be better than their old home.”

The Globe and Mail
Published Sunday, Sep. 28 2014, 4:34 PM EDT
Last updated Sunday, Sep. 28 2014, 5:16 PM EDT