by Timothy Lee
Tue, Dec 11th 2007 3:13am
We've said before that bribing users to watch ads isn't a good strategy. If an ad is relevant or entertaining, users will pay attention to it without financial inducement. And if it's not relevant or entertaining, it's not likely to be effective no matter how much you pay users to watch it. The latest example of this principle is Agloco, a reincarnation of the bubble-era AllAdvantage. Agloco, like AllAdvantage, paid users to display a window with advertisements on their screen. Also like AllAdvantage, it was a pyramid scheme where users would get paid a bonus for signing up other users. And now TechCrunch is pointing out that, like AllAdvantage, Agloco is going belly-up. It seems that their revenues are "not enough to support operating costs." When we covered Agloco's launch a year ago, we wondered whether the reincarnation of AllAdvantage was a sign of a new bubble. Their failure suggests that the markets are more rational this time around. The problem with the original bubble wasn't just that bad companies managed to get funding. It was that their stock values got inflated to ludicrous values and then crashed all at once. This time around, poorly-conceived companies like Agloco are able to get funding, but they run out of money relatively quickly and go out of business without dragging the rest of the market down with them.
If you liked this post, you may also be interested in...
- NY Legislature Rushes Anti-Airbnb Legislation; Likely In Violation Of Federal Law
- EU Commission Releases Plans To More Directly Regulate Internet, Pretending It's Not Regulating The Internet
- Sprint Customer Listening Tour Goes Sour, Company Has To Pull Ad Calling T-Mobile A 'Ghetto'
- Apple Tells Court That The DOJ Is Lying About It Advertising The Fact That Encryption Keeps Out Law Enforcement
- Bribing Users to Watch Ads Didn't Work In 1999 And It Doesn't Work Now