Social fan sites? We look at Watercooler

Charlene Li helps us evaluate Watercooler, a site for sports and TV fans

This week, we take a look at Watercooler, which brings fans of popular shows, such as 24, 30 Rock and Seinfeld, and sports teams, such as the LA Lakers and Oakland A's, together across major social networks, such as Facebook, MySpace, Bebo and hi5. Joining us to analyze the popular social media company is Charlene Li, a social media guru and founder of Altimeter Group, a digital strategy consulting company.

Here's our observations of 2-year-old Watercooler, which has raised $4 million in funding and has 35 million users, according to CEO Kevin Chou in his video pitch.

- Watercooler is doing the right thing by going to where the fans are. You can't sell hot dogs in a parking lot, you have to be in a stadium. In this case, the stadium is the social network. So many build destination sites and forget the most important lesson in building a company - distribution and access to the audience. Watercooler clearly had this in mind when it launched. Watercooler is a lot like Zynga, the leading social gaming company, in that it leverages social networks and allows people to connect with people they already know.

-  It's a toss-up whether fans will want to go on social networks to express their passion and support for their teams or shows, or whether they'd prefer to go to the actual branded site. Watercooler can provide a rich community experience, but the brands can probably offer a rich content experience.

- Watercooler should consider being a hub for independent content. Sports is highly integrated with content. Perhaps Watercooler can bring top bloggers for a particular sports team to provide more content to the community and fan experience.

- Watercooler is very disconnected from the brands, because the big brands want to keep control. Yet Watercooler is targeting the big branded shows and sports teams. If Watercooler can't get more content from the brands, it should follow in MySpace's footsteps. Much like MySpace catered to indie bands, Watercooler should target indie shows or indie sports teams.

- Besides targeted advertising, there is a decent CPL (cost per lead) element to this service as there are a lot of things you can deliver to folks, which are in context to what they're doing online.