Venture-backed social recommendation technology developer MyStrands Inc. is going into the venture capital business in its own small way, offering seed investment to the best early-stage startup or project in the field of online endorsements as part of a peer-reviewed contest in conjunction with the industry's annual conference.

The startup is putting out a "$100,000 Call for Recommender Startups," in which five finalists will be identified to demonstrate their technology during the ACM Conference on Recommender Systems in Lausanne, Switzerland, on Oct. 23-25, 2008. Entrants will be judged by an independent panel on traditional venture capital criteria, including the strength of the technology, business opportunity and team.

MyStrands will underwrite the costs of the five finalist groups attending the conference.

Recommender systems are software applications that support decision-making based on preferences users have expressed in patterns of search and other Internet use. The sector is still being defined, and MyStrands' vice president of communications Gabriel Aldamiz-echevarria said the company is sponsoring the contest partly to broaden the field overall.

The contest is in effect aimed at potential competitors to MyStrands, but Aldamiz-echevarria said the company is working with its lawyers to eliminate conflicts, and he said the aim is to increase overall research activity in the industry. While MyStrands may end up working with contest winners, he said the company is going to great  lengths to conduct it through third parties.

He said the company will create a mechanism to price MyStrand's investment independently, and the company will have no separate rights to the winning technology.

For its own part, MyStrands has raised $49 million from Spanish investors BBVA, Debaeque, Sequel R&D SL and Antonio Asensio, the CEO of Spanish media group Grupo Zeta. The company has been selling its recommender research products to large consumer companies as a hosted service and had $12 million in sales in 2007, but Aldamiz-echevarria said it expects to begin selling consumer versions for PCs and mobile devices within the next few months. - Clifford Carlsen

See December 2007 story from Tech Confidential