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From Russia With Love: Chatroulette Founder Wants to be an American

Say you're a Russian teenager about to flunk out of high school, running a website out of your parent's apartment. Suddenly, your site gets huge. Moscow's Internet kingpin sends a limo to your door, and asks you to name your price for 10% of the company. If you're Andrey Ternovskiy, the founder of Chatroulette, you tell him, "No thanks, I'd like to start a business in America."

This story has some encouraging lessons in it for the future of American business on the Web. Chatroulette (NSFW) was designed by Ternovskiy as a game for his friends, a program that randomly connects participants with each other via webcam. Last November it had 500 users, most of whom Ternovskiy knew. By January, there were 50,000 users a day. Now there are 1.5 million. It's a viral, often visceral, social media phenomenon -- kind of like speed dating with planet earth.

Ternovskiy, 17, has received interest from American firms like Google (GOOG) and Skype, but his most ardent admirers have been closer to home. Yuri Milner, the Muscovite billionaire, is the one who asked him to name a figure for 10% of his future company. Milner's portfolio accounts for 70% of all Russian language page views on the net, and he recently bought a 5% stake in Facebook, making him the only non-American major stakeholder. He's a heavy hitter.

But Ternovskiy has good reason to be cautious. Milner was also just named by Russian President Dimitri Medvedev to a powerful commission, replete with oligarchs and politicians, charged with modernizing the motherland, and helping it to break the "American hegemony in cyberspace". The Kremlin would like nothing better than to see a homegrown web company become a global star, but it might also want influence within such a company.

Ternovskiy has other ideas. He recently applied for a visa to the U.S., and hopes to found his company in Silicon Valley. Increasingly the sharpest minds in the tech sector are coming out of China and Russia. Not all of them, as I've written before, are friendly. And reports have shown that these elite foreigners are less interested in U.S. then they once were. But as Ternovskiy's case proves, Silicon Valley is still a beacon for entrepreneurial youngsters. If America can maintain, or even encourage this trend, our dominance on the web will only grow. "The Internet is my world," says Ternovskiy. "It connects Moscow with the West."

Image of Catman from Chatroulette Update - 4/8/2010

The last time I reported on Andrey Ternovskiy, the 17 year old Russian dropout who created the massively popular website Chatroulette, he was applying for a visa to the U.S. Now he's stateside, being courted by investors in NY and LA. It's clear from Ternovskiy's recent interviews that he's got a smart approach to transforming the site from a viral playpen in a workable business. Of course, he's got to turn 18 first.

The site is now estimated to be doing around 30 million uniques a month, and Ternovskiy began running Google Adwords to capture some revenue. But the search giant recently informed him they won't be paying him, at least not until his next birthday, when he becomes a legal adult. In the meantime, copycats and piggybackers have started to pile on. Sites like Chatroulette Maps, which shows you the location of your chat partner, add functionality. Others, like RandomDorm, repackage it for a niche audience.

Ternovskiy is intelligent enough to acknowledge that he doesn't have much of business plan, but what he does have to say is encouraging. He's planning to incorporate some of these newly emerging features, like location data, while always retaining the option to keep the random experience that made the site so popular. I expect a simple next step would allow users to toggle dozens of parameters, from age to sex to location.

He also has plans to clean the site up, although he understands that, "People are naked are all over the Internet." A button has already been added allowing users to report bad behavior.

Mostly though, he's in no rush. "Right now I can survive without investors. The site uses peer-to-peer technology and my Web site is not the kind of site that needs a lot of money to run." Ternovskiy says he has a return ticket to Moscow booked for later this month, "But who knows, maybe I'll never go back!

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