A California-based company called Pure Verticals is developing a product it calls MUGC -- which stands for Monetizing User-Generated Content, and they've announced they're seeking to have it patented. It also plans to showcase the tech by Q1 2008 with a new website.

So what is it, exactly? It's a platform, that much is clear from the announcement -- and it promises to enable any virtual community or social network to offer its members control over how product placements and ads integrate with member content. As opposed to providing ad space alongside content for ads generated automatically or by a third party, users can select the products to promote and apparently tailor how the ads are displayed.

It also incorporates feedback and "reputation management features" designed to help user-generated content consumers decide whom to trust. Says the company, "MUGC users and the users of their content will no longer think of advertising, but of communities sharing important information about products and services that enrich their lives."

The company also says MUGC integrates proprietary page code with a kind of online shopping cart. Pure Verticals co-founder and COO Theresa Klinger explains, "The vast majority of social network sites do not provide their members shopping services, yet they have a clear need to buy and are only a click away. Ninety percent of the typical horizontal social network is comprised of interest groups, such as do-it-yourself, cooking, and travel."

She continued, "These members buy group-related products from other sites or off-line because they are not offered the opportunity to purchase within the social network site. It’s widely known that users will choose to buy products recommended by fellow consumers/members – so the ability to purchase right from the UGC offering the endorsement is a powerful – and completely missed – opportunity. Vertical networks are larger versions of these horizontal social network groups, but with the ability to deliver specialized services for their niche industries."

Explained Klinger, "The MUGC shopping cart allows any number of merchants to sell their products. While site operators will benefit from having many merchants participate, brand specific social networks may opt to act as the sole merchant."