Wallop, previously a semi-forgotton Microsoft Research “sandbox” social network and photo sharing project, was spun off into a new, independent, venture backed business earlier this year (details here). Tonight at 9 pm California time, Wallop is launching a semi-public beta.

Wallop is a Flash based social network that will compete with Myspace, Facebook and others that I mentioned in a post yesterday. It includes free unlimited storage for people to upload photos, videos and music.

Unlike the other social networks, Wallop CEO Karl Jacob says he has no plans to ever put advertising on the site. It just lessens the user experience, he says. Instead, Wallop wants a piece of the $3 trillion per year U.S. market for self expression items (clothes, furniture, beauty supplies, etc.). As sites like Cyworld have shown, people are willing to spend money for online expression items, too (Cyworld brings in a reported $300,000 per day in microtransactions to its users).

So Wallop has created a marketplace for “self expression” items on the site. Flash developers can create items and sell them to users. Music clips, animated widgets, artwork, avatars, clothing for avatars, etc. will all be for sale. Wallop handles payments and DRM, and takes 30% of the sale price. The rest goes to the seller.

Marketplace functionality is still being built, but Wallop says they will have the ability for sellers to create auction sales for one of a kind items, limited edition sales, etc. in the near future.

Invited users will be given five invitations each that can be used to invite others into Wallop. More invitations will be given to users based on how active they are in the service. Look for the service to leave beta and open to the general public in early 2007.

Wallop is based in San Francisco and has 27 employees. They’ve raised a total of $13 million in venture capital over two rounds, from Bay Partners , Consor Capital and Norwest Venture Partners.

Screen shots of Wallop are below.

Wallop, previously a semi-forgotton Microsoft Research “sandbox” social network and photo sharing project, was spun off into a new, independent, venture backed business. Wallop was previously at mywallop.com – the new company is at wallop.com.

The new entity is led by CEO Karl Jacob, a Sun Microsystems and Microsoft veteran. Karl is a seasoned entrepreneur as well – this is his fifth startup (he was a founder or co-founder of On Ramp, Dimension X, Keen (now Ingenio) and Cloudmark). The new entity has raised a Series A round from Bay Partners. Microsoft will retain a “minority stake” with a non-voting board seat.

Not much is being disclosed about Wallop yet, except that it is significantly different than the existing Wallop project. I’ve seen a bit of what they plan to offer, and I’ll say that this is not another “me too” social network offering. And there are a number of unique business model twists that they aren’t announcing yet. The launch is scheduled for this summer. One interesting thing to note: the current Wallop site is all-Flash. hmmm.

Existing MyWallop.com beta users will not immediately be affected by the change.

I’ve been hearing a bit about Microsoft’s Wallop project from users (apparently its at least two years old). Microsoft describes Wallop as a place to ” share photos, blog, and interact with your friends”. Ok, that pretty much doesn’t narrow it down much at all.

The beta is closed and as I said above there isn’t a whole lot of descriptive information on the website. The Microsoft Social Computing website has a little more, and includes a couple of screen shots:

In Wallop, you can share photos, blog, and interact with your friends. Wallop is a research project that explores how people share media and build conversations in the context of social networks. We are currently conducting a small, real world trial of Wallop with small friendship groups. Therefore, membership in Wallop http://mywallop.com is limited to study participants until the trial is over.

I’ll be keeping an eye on this one. The other projects on the Social Computing website also look interesting.