The Daily Dinar

Want to buy Mecca? Well, that will be $1,000. Dubai? That will be a bargain at just $50,000.

This is Weblo, supposedly one of the hottest trends on the internet at the moment, self-describing itself as monopoly on steroids. Created by Rocky Mirza, the site allows users to buy, sell and develop virtual properties, countries, states cities, and virtual domain names. By developing your property, you are able to make money from it. The Weblo site explains:

There are five ways to make money with your Weblo Assets:
1) Flipping (resale for profit)
2) Advertising (Clicks on PPC ads)
3) Percentages of transaction fees (Mayors, Governors)
4) Portions of initial purchase fees (Mayors, Governors and Airport owners)
5) Percentages of membership fees paid by newly registered members. (Mayors and Governors)

So, airport owners benefit the mayors and the mayors benefit the governors. A diagram would probably help make all this clear but suffice to say it would resemble a pyramid because, on the face of it, Weblo is a pyramid scheme. As VentureBeat put it:

By owning a city, you become a “major” and earn a 0.5 percent surcharge applied to every transaction in their city, so like other pyramid schemes have an incentive to get others to sign up. You get more revenue if people visiting choose to “rank” your site and if you update your site at least weekly. You’ll get a percentage point of membership fees from members who register in your city, 1.5 percent of purchase price on properties in your city, and a whopping two percent of all ad revenues on your site. (Weblo milks 98 percent). And like all good pyramids, there’s a hierarchy. If you become a “governor,” you get even more revenue. You can even become President.

Although prices are apparently rising, one must ask what are people buying. Unlike their real world equivalents, Weblo properties have no intrinsic value and the scarcity of ‘virtual real estate’ exists only within the context of the Weblo world. If that website goes down, then it takes your ‘investments’ with it. The properties are only valuable because someone else might want to buy them (at the moment). In other words, it doesn’t seem like a particularly good investment even if prices are rising. Before people get too excited about the prospects of profiting from Weblo, they might want to read up on the Tulip Mania of the 17th century. The more things change, the more they seem to stay the same.