April 3, 2008 5:15 PM PDT

Kids earn online points for real-world chores

Posted by Stefanie Olsen

(Credit: Handipoints)

For parents, enticing kids to do their chores is often about making deals--a trade of sorts, like taking out the trash for extra time watching TV.

For George Zachary and his 10-year-old stepdaughter, that real-world exchange happens online through a site called Handipoints, a digital chore-list manager for parents and their kids. The Web site lets parents set a list of tasks for their children--like washing the dishes or filling the dog's bowl--and kids can rack up points for completing the list. With enough points, children can cash them in for digital gear in the site's virtual world, or for tangible goods with a few dollars from mom and dad.

"She earned points to get some Disney DVDs and books called The Warriors about an underground legion of cats," said Zachary, who as a venture capitalist knows about deal-making. "The site is her start page."

This arrangement could pay off doubly for Zachary. His venture firm Charles River Venture invested around $800,000 in Handipoints last spring with a group of angels that included former Googlers Georges Harik and Aydin Senkut, Inspiration Ventures, and Keith Rabois, an investor in YouTube.

Handipoints is one of a raft of new child-focused sites and virtual worlds that are competing with established kid favorites like Club Penguin, Gaia Online, and Webkinz. Like those sites, Handipoints runs its own virtual world with games and personalized avatars, but the company has a slightly different angle on fostering community. It's trying first to be a tool for parents and kids.

"We're trying to motivate kids to stay active in the real world," said Viva Chu, who founded the company in January 2007 after helping develop the architecture of Internet marketing company Adteractive.

The company makes money from the sale of goods from the site--books and DVDs, for example--and it plans to sell advertising that would be targeted toward parents. It also plans to charge subscriptions.

Since its launch last spring, the company has drawn about 150,000 registered users of both parents and kids. So it has a long way to go before it can compete with the big sites like Club Penguin, which draws millions of users every month. But Chu said the company, which employs 20 people in Oakland and overseas, expects to raise several million dollars this summer in a Series A round of funding to build out the service.

With luck, that won't be a chore in a tightening economy.

Originally posted at News Blog