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

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.

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  1. identicon
    Mike, 6 Jul 2005 @ 10:44am

    VC's caught red-handed

    OK, how about some individual's names? Public denunciations are in order.

    You should also give an explicit link to Ben Edelman's site, not just hide it among the references to your own earlier stories.

    http://www.benedelman.org/

    Not to carp. You're doing a good service to humanity.

    reply to this | link to this | view in thread ]

  2. Mike, download and see for yourself

    Mike, it's been WhenU’s policy not to post on blogs, but you've convinced me it's time to rethink that policy. I urge you to actually download WhenU software. See for yourself just how blunt our pre and post-download notification screens are. Read our unusually short and clear End User License Agreement. See our branding and toll-free number listed on every ad, then call that number and talk to one of our two Help Desk employees (they don’t get that many calls). Then see how easy it is to uninstall using Window’s Add/Remove. But you should know that there are some things we haven’t changed, like our name -- in fact we’re moving toward branding all our products with the WhenU name for total transparency. We also haven’t changed the way we protect user privacy – we still don’t use cookies to track user behavior and we don’t harvest clickstream data or engage in user profiling of any kind – not even anonymously. So go ahead, download WhenU software – I think you’ll understand why we bristle at being lumped in with the other guys.

    reply to this | link to this | view in thread ]

  3. icon
    Mike (profile), 14 Jul 2005 @ 2:23am

    Re: Mike, download and see for yourself

    Avi,

    Thanks for posting publicly. I appreciate your willingness to make the discussion more public. I believe that many of your practices are, indeed, the way you describe them. I won't download your product because I have no use for it. However, the simple number of complaints found around the web certainly suggests that there are people who feel otherwise. It could be past practices that have since been corrected (sounds like it), or it could be that the current practices still aren't clear enough.

    Either way, the point of the post was to point out that what built this industry up, and made their business model work was the sneaky installs that go everyone so upset. I'm not convinced that once the company goes fully transparent (which it *should*) that it can make the sort of return that makes for a reasonable investment.

    So, perhaps you guys have cracked the business model issue too -- but I think it needs more time to show that (1) people out there really do feel that WhenU is being straightforward for an extended period of time and (2) that in that state, the company can make money.

    If you can do it, more power to you.

    reply to this | link to this | view in thread ]


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