It would make it easy for you to:
-- Create an online memorial
-- Make it public; for the world to see
-- Make it private; just for friends and family
-- Collaborate with friends and family; create the memorial together
-- Collect and organize your memories, stories, videos and pictures
-- Save it forever.
Some notes:
This might sound a little morbid but people do this stuff when a relative or friend passes away. Why not make it easier?
My wife calls it MyDeadSpace. Funny gal. I don't plan on using that name.
[EDIT]
Sincere thanks for everyone's feedback. If anyone does have any other thoughts - feel free to email me (john at todotoh dot com) or continue commenting.
So go for it. It doesn't seem like a super-complex idea involving crazy algorithms or anything. You are going to have to really consider design issues about how such a site should be navigated, if perhaps it should be linked with MySpace or Facebook or something so that friends can refer people to memorials on the site or something. Or come up with a different plan altogether.
The point is that it doesn't matter how good the idea is if you don't have a good design in mind and the motivation to make it happen. I think it would be great, but can you do it? (That's meant to be a motivational challenge in order to help get you started on it.)
But, craigslist has shown that if you take a newspaper product and dump it onto the web with a perfect implementation (say what you will about craigslist and how ugly it is...but it's a beautifully functional ugly that's a joy to use), you'll get lots of users. Every day there are thousands of obituaries published. The paper gives you three or six or whatever lines for free, and you can pay for bigger ad-style layouts. Just like classifieds being really cheap for a few lines, but getting more expensive the more copy you write, you can remove the expense of extra copy and adding pictures.
So, taking something that's currently inconvenient (call the newspaper, spell the name three times, struggle with the family about who gets listed under "survived by", since you're running out of words, etc.) and making it convenient and free sounds like it'd be a winner. It's the "free" part that makes it hard to make money on. Who wants ads for home mortgages and crap all over their grandfather's obituary? But I dunno if people will pay for it.
Why not change the concept a bit, i.e. "Create a Fan Page About Anyone"?
That way, you can encompass all kinds of people (both living and deceased, famous or not, people you know personally or not), whatever the situation.
If you still want to go forward, make sure you are differentiated.
After thinking about it: Good idea but won't create a big successful business for the same reason above. There are already several web sites that does that (search on Google like madanella suggested), and the fact that they are not well known is an indication that it's not a popular concept.
Having said that, you can still take something and make it successful if you manage to figure out the perfect combination of features and marketing ideas. Successful companies do that all the time, they take existing ideas that don't have much traction and make them better. Google didn't invent search, Apple didn't invent MP3 players, and Microsoft didn't invent operating systems.
A point to consider as well is that it's probably not appropriate to put ads on a memorial page. Some people will be sensitive to it. In that case, how would you recover the cost of hosting pages for very long periods of time?
I'm not implying this applies to you :) It sounds like you are sincerely passionate about the idea.
I think it's a valid approach to realize there are companies out there doing this, they aren't popular, and it's probably because they aren't 'doing it right'. So if you think you know how to do it better, by all means do it! Good luck.
Thanks for the link and the "good luck". Same to you.
The concept really isn't about the creation of an online memorial. It's really about providing a way for the LIVING people to come together, remember and talk. What's important here is the process of remembering and sharing with the intention of creating a memorial. My idea is simply a way to foster that connection.
I hope this frames it in a different light for you.
Also, one question pops up: do you think people would rather create a memorial on a graveyard, or in some private place? The graveyard might be good because it makes you feel less alone, but technically it isn't really necessary.