At first, socialDragon looks like any other online social network site that brings together ordinary consumers who get a thrill out of putting their personal lives on display for friends, family, and strangers. Users upload vacation pictures, videos, or their thoughts about hobbies, politics and daily life. It's what happens after that makes socialDragon unique.

The site is really an online business that allows those who upload their personal content to "tag" it and set a price on its potential value to an advertiser.

For example, a personal video of a white-water rafting trip might be tagged as "vacation," "rafting," "adventure," "river." The number of tags and the names are left up to those who upload their content. A potential advertiser -- a travel agency, for example -- can use socialDragon to create an ad campaign around a theme such as "rafting adventure" and search through the user created tags for relevant content. 

When a match is found, the advertiser incorporates that personal content into the advertisement. The ad might sit above the video, appear as Macromedia Flash content, or might even be an old-fashioned banner ad. The travel agency ad becomes more appealing because of the authenticity of a non-professional video that depicts people having a great time on their white-water rafting adventure, says Gavenraj Sodhi, founder and CEO of socialDragon, a venture-funded startup with eight employees, located in Ladera Ranch, Calif.

Sodhi says he got the idea for his approach to advertising after living in China for 10 years.

"In China people put relationships in front of business," Sodhi says. "We build on that concept."

Content providers put a price on what they think the video is worth, say 3 cents for every time it is viewed by someone on the Web. Because the ad and video are now one, whenever the ad is shown, the content is also viewed and the provider gets paid, creating an incentive for individuals to create, rather than just consume, content.

socialDragon includes a management component that allows the advertiser to decide when it wants to run the ad and how long to run it, as well as to put a cap on how much to spend on the ad, based on number of views.

And Sodhi wants to expand beyond the socialDragon Web site. A widget that can be uploaded to strategic destinations, communities, and social networks, gives the advertiser a potentially larger audience. For example, an aftermarket car accessory manufacturer could marry homemade car racing videos with ads for its products, then deploy them through a widget on car enthusiast Web sites like FreshAlloy.com, a destination site for Nissan fans.

"We are focused on niche and narrow-casting of content," Sodhi says.

Content sharing sites are looking for ways to spur users to contribute, not just consume content. Google-ownedYouTube said earlier in May that it will start paying content creators by sharing ad revenue. At the same time, advertisers everywhere are trying to figure out how to reach younger viewers who are skeptical of traditional pitches, but respond better to word of mouth "buzz" from peers and less-polished, user-generated content they perceive as authentic. Sodhi cites a recent experiment by Proctor and Gamble that provided 100 people with a box of Tide detergent and a video camera and asked them to film how they and their family clean their clothes. P&G believes this kind of advertising builds a personal relationship with the consumer and creates brand loyalty.