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P Diddy’s TinyChat Gets Legs But Can It Catch Skype?

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The chat room site, which has a stream of famous backers including Ashton Kutcher and Sean Combs aka P Diddy has announced its first-ever location-based service but can also be used as an simple desktop chat system.

Once registered, it gives a location marking for each user showing their geographic region and location (within a 10-mile radius) and provides a map to help identify fellow chatterers nearby. 

The fledgling provider, based out of New York, says it is gaining 50,000 new users a day and is “second only to Skype for live-streaming web chat.”

Currently, it boasts 8 million daily users and is growing at a rate of 700 per cent y-o-y, since its foundation in 2009.

However, this pales into comparison to VoIP darling Skype, which has around 145 million monthly users on average and another 400m registered. Nonetheless, it seems the market is ripe for other online chat providers.

The new location service will also respect user anonymity, it insists, and users can opt in or out, to build a private or public chat group, or join live interactive online community.

As part of its update, the chat site has developed widget versions of the service are available as well for use with all the leading web browsers, including: Firefox, IE, Google Chrome and Safari. Although it doesn’t require any downloads to use, it does require Flash.

“Offering a location-tagged experience for our users gives a global sense ofcommunity to our burgeoning video group chat portal,” said Dan Blake, Co-Founder of TinyChat.  

“All geotagging and video broadcasting options on the site are at the user’sdiscretion, and TinyChat video group chats bring together dozens of chatters into an interactive community with full audio, video and text chat, along with individual user profile pages and dozens of custom chat room options.”

It currently has 30,000 active chat-rooms hosting nearly one million visits every day. It also has some famous users with Lady Gaga, Justin Bieber and Bruno Mars embedding Tinychat functionality into their websites.

Other backers include Madonna’s manager Guy Oseary, and Ron Burkle and has raised more than $1.5million from its most recent round of funding.