WhenU Convinces VCs That It Has Reformed — Everyone Else Isn't So Certain

Venture Capital

from the sucker-bet? dept

And we thought that various investors had learned that adware companies were a bad bet and to be avoided at any cost (not that we thought investing a ton of money in anti-adware companies was a good bet either). However, adware maker WhenU, has apparently convinced a group of VCs that it’s “changed its ways,” and that it’s worthy of a $15 million investment, bringing the total raised to about $35 million. Given the recent rumors about a Claria buyout, maybe (ugh) this means that adware companies are hot again. If so, that would be bad. So far, it seems like most of these companies, even as they “reform” are still doing so in sneaky ways. Their ideas concerning transparency often seem just as sneaky as their pre-transparent ways, doing things like suddenly telling people that their software was installed ages ago and asking them to “reconfirm” that they wanted software they most likely never wanted in the first place — but still doing it in a misleading way. Those two examples are of different adware companies, but WhenU clearly isn’t above being sneaky on its own. Part of WhenU’s reform effort was to convince anti-spyware vendors to remove WhenU from their listing, even though the product remained identically problematic — and most people still had no idea what they were installing. The whole business concept behind adware relies on having those products installed as widely as possible — which means these companies are always going to be sneaky about what you’re really getting. When called on this, they pretend that the real problem isn’t about sneaky installs, but that people are afraid they’re being spied upon. Investors in such businesses are doing a bizarre sort of due diligence. When the company you’re investing in is so hated that a basic Google search shows tons of negative stories and links to applications to remove the program, doesn’t it seem like this is not a company with a real long-term business model? Update: WhenU has contacted us saying that it’s unfair to lump them in with the practices of others in their industry. We’ll give them the benefit of the doubt. Even though we thought we made it pretty clear in this post which practices were done by WhenU and which were done by others (the point of the article was to talk about the whole space being hot, rather than just WhenU…), WhenU wants us to make it clear that they didn’t do most of the sneaky things other companies in the space have been accused of. However, we stand by our assertion (the point of the post) that investing in the adware market is a bad move — as the core of the space is built on deception of users, even if companies are trying to clean that up after-the-fact. Perhaps some companies are better than others, but you shouldn’t take our word (or their’s) on it either way. Do a search and see what others are saying and decide for yourself who you trust. As for WhenU, if you want to comment about this story, I encourage you to use the comments here rather than sending vaguely worded emails. That’s part of what transparency is about. For example, see how Plaxo has responded publicly when they wanted us to clarify our comments. The floor is yours, if you’d like to use it.