All,

Since Makena technologies spun out There as its own company and service, one of our core strategies (which I shared with you at the last "State Of There" address) was to "Opportunistically explore partnerships". This meant that we would very selectively work with partners in various countries and industries who we felt were a good match for both our bandwidth (as a company) and our community.

Due to the nature of our business, we also told you that we would not always be able to talk about these things in public, but we would do our best to make sure your were the first to know about it. Finally, we also said you may see us delivering features which you'd never asked for, and they may be tied to things which we could not talk about right at that time.

Now that I've refreshed your memory on that, we're very excited to announce the following:

There, in partnership with Groovenet, Inc, has launched an Alpha test of "There Philippines", a There service specially designed and localized for the Philippines market. We view the Philippines as a "gateway" to the Southeast Asia and Asian markets, and There Philippines is a great opportunity for us to learn about those markets and communities.

Groovnet has worked closely with Makena to localize, market, and evangelize the service, and has also done much of the integration work with Internet cafes and payment services there. Groovenet will also be providing Community and Customer support for There Philippines, which is important because they understand the language and culture there better than we ever could.

Many people may be surprised that There Philippines is a different world from the existing There service. We decided to initially take this approach for several reasons.

First, The Philippines has a different economic structure from the U.S., so the Therebucks exchange rate is very different, starting with the fact that it's based on a different currency (the peso). After much study, we decided that attempting to integrate the two economic systems right now would be just too disruptive to our core business, so we decided to keep them separate. The difference in economic systems also drove some of the new features you've been seeing over the past few months.

We were also unsure how the influx of a potentially large Philippines community would affect the existing There service. Chances are, things would have gone just fine, but we were concerned about the small chance that they wouldn't. I'm sure you're all aware of the stories of other social networks which changed completely with the influx of large numbers of members from other countries. Since our community is our most valuable asset, we decided not to take that risk.

These two factors, along with many others, led us to the conclusion that There Philippines would best be launched, initially, as a separate service. This is not to say we won't merge the two worlds at a later time, but that would take a lot of careful thinking to make sure it works just right and doesn't disrupt our existing service.

We're very excited about starting this test, which has been in the making for a long time. Since we can now talk about it, you can look forward to periodic updates from us about how things are going. I'm sure you have many questions, so we've tried to anticipate them here:

Q. What is the URL for There Philippines.
A. The home page is www.groovenet.ph .

Q. Can I register for There Philippines?
A. You can only register for There Philippines if you have a Philippines cell phone.

Q. Why can't I register with a credit card or PayPal?
A. Unfortunately, due to the high credit card fraud rate in the Philippines, there are no credit card providers which will let us accept credit card payments from there. Fortunately, this has driven development of cool technologies like cell based OTA (Over The Air) payments and ePins in the Philippines, which makes paying for things very convenient if you happen to be in the Philippines or have a Philippines cell phone.

Q. Is there a developer program for There Philippines?
A. Not at the present time. We decided to start out with a basic service first and grow from there.

Q. I'm a There developer, and would like to sell my wares in There Philippines. How do I do this?
A. Currently, there is no way to do this. However, we recognize that this represents a huge opportunity for our developer community and are working to find a way to do this. There is no way we could even begin to develop content as nice as our developers, and it only makes good sense to make it available to the Philippines. As you can imagine, the biggest issue will be economic: How do we get Philippines Therebucks to U.S. developers? How will the disparate exchange rates work for buyers and sellers? These are complex issues and not immediately solvable.

Q. Will the number of users in the Philippines affect lag, etc in There?
A. No. There Philippines is a completely different set of hardware.

Q. Why did There spend time on this instead of, for example, giving us hugs and cats in There?
A. We believe that the best way to guarantee the long term viability of the company is to expand our customer base in as many ways as possible. A key component of this strategy is international expansion, in a careful and controlled fashion. There Philippines is our way of "sticking our toe into the ocean", so to speak, and we've already learned a lot from the experience.

If you want to compare it to hugs and cats, it was clear to us that, even though we'd like to have hugs and cats as much as you would, the long-term potential of expanding into the Philippines probably exceeds the potential of hugs and cats. In many ways, we hope this expansion will make it possible for us to grow and give you things like hugs and cats.

And, as anyone who owns a cat knows, expanding into international markets is much easier than dealing with cats, especially if you want them to do what you want.

Q. Didn't it cost a lot of money to do this?
A. Actually not. Since we did this work in partnership with Groovenet, they absorbed most of the costs of localization, marketing, evangelism, and integration with the local phone companies. There provided the initial (small) hardware cluster, software, and operations support. We're actually very happy with how we've been able to economically test this service.

If you have any questions or comments, please let us know, either via the forums, the Community Group, or emailing me personally. Thank you!

Michael Wilson
CEO, There