We don’t always slam a company just for taking a new spin on an idea that didn’t fly in the bubble. But if the founders of the new company were part of the old company, and the business model looks a lot like a pyramid scheme, and they are saying publicly that the only reason it didn’t work the first time around was because the market crashed at the wrong time, we’re going to take a very hard look.
AGLOCO is all of those things, but it may be a good idea anyway. First spotted (and trashed) by Liz Gannes at GigaOm, AGLOCO looks to be very similar to a service called AllAdvantage that was a high flyer back in the day, just before crashing badly in the stock market burst of 2000. AllAdvantage paid users to surf the web by showing them advertising related to what they were viewing online. AllAdvantage also paid referral fees for new members that a user recommended to join. The company raised $200 million in capital and reportedly paid out $100 million to members.
AGLOCO is a reincarnation of AllAdvantage, although the founders are trying to spin a different story. Like the previous company, AGLOCO asks users to disclose personal information and install a toolbar that rests at the bottom of the browser screen. The key difference is that AGLOCO is also reimbursing a portion of affiliate fees earned from ecommerce sites when users make purchases, and they have a multi-level payout scheme where users can get part of the fees generated by referred members, plus new members that those people referred, down to five levels (this is why it is being called a pyramid scheme). It looks like AGLOCO is also offering stock in the company to users.
Matt Marshall has a long post that he wrote after interviewing some of the fifteen founders. They argue that the model will work this time because advertising targeting technologies are better, and the affiliate model will add additional revenue.
They may be right, and there is certainly nothing wrong with trying. If they can get enough people actively using the software, and the advertising market doesn’t implode, my guess is they will have a success on their hands. AGLOCO isn’t going to make the world a better place, but it may be a profitable business.
What doesn’t impress me about the company is that they are still telling stories about the last time around. In particular, co-founder Jim Jorgensen talks about a blowout party the company held in 2000, where the Grateful Dead played and the guest list included President Bill Clinton, John Doerr, Frank Quattrone and others. Not a humble way to start a company, or to convince people that they won’t make the same extravagant mistakes this time around, too.
No word on when AGLOCO will launch - keep an eye on their home page.
Um, good on you for fixing some of your AGLOCO/OGLOCO errors but there are still some scattered through the article.
damnit. ok thanks.
.
That was definitely a memorable and historical evening during first the Web boom- - - - here is another interesting perspective….
http://en.wikipedia.org/wiki/Jim_Jorgensen
Yes, it appeared to be one hell of a party. And it was the thing to do then. But it isn’t the thing to do right now.
To get the facts straight - The party being referred to was a democratic fund raiser. AllAdvantage did not pay for the event. The president came for free, the grateful dead played for free, the food was hamburgers and hotdogs but it was indeed a lot of fun!
Michael, you must appreciate the irony of taking a company to the woodshed for relishing 1.0 days of old when you pose for pictures like this:
http://tinyurl.com/gcdrf
Web 1.0 is right. I haven’t seen a “under construction” page for a looooong time.
One of my old roommates had an automated program to browse the web for him, and he made hundreds of dollars through AllAdvantage before they banned his account. At that time I was a Mac-only man and didn’t have access to such fun tools
Simple economics dooms this one.
The people who are going to sign up for and use AGLOCO legitimately are those who find the benefits of AGLOCO outweigh the time/etc. costs of setting it up - those who are least likely to spend money on the goods advertised.
Who wants to advertise to that demographic? Fraud, automated clicks, and the MLM aspect aside, this just won’t work.
Interesting
I had just finished pieces on my blog on “Spam 2.0″ and gaming social media when I saw this on my “coffee” surf…it brings back memories
I think that finessing the Opt In for a Spam type approach will be a major play, as Spam is clearly economically efficient, just repugnant. Ergo remove repugnancy, one way is bribery
Re AllAgloco…not clear why things are different now, except there are more suck…I mean users.
Anything related to web-based MLM and the potential fraud associated with it gives me the willies. Doesn’t mean that some people won’t make money, but I’d prefer to see someone building something that benefits people and provides real value.
So what makes them 2.0 now? The logo?
I am by no means a get-rich-quick type of person. I realize that some people have been lucky enough to make money off of schemes like this, but it just doesn’t happen for everyone. It is a neat idea, but I don’t think anyone I know would take the time to get this working and browse enough to make any money off of it. I just don’t run in circles with people that do that type of thing.
I hope this company falls flat on its face.
A cheap B horror movie.
you guys are hilarious!!!
forgive my bias, but i can’t help but to imagine that the majority of readers believe that the early 20’s is the genreation that ‘knows’ what’s up.
based on my reading of various comments, it appears that people here would have looked at google when it was being developed, and thought, search is over, why do we need google.
the basic approach to alladvantadge/agloco is reasonable:
-give the user a toolbar
-track what the user is doing/going
-display coupons/discounts/beneficial items
-share revs with the customer
the implementation might have to be tweaked, and i’m not saying that these guys are the team to do it. i’m also not sure that the mlm approach is the best way to go about achieving their goals..
however, if a company ala google/yahoo had this kind of biz model, i’m sure a great number of people would take advantadge of it. as a vendor, it would seriously decrease the potential for fraud if done correctly.
peace…
Sometimes it is clear that history is repeating itself.
Web 2.0 is more that just making money. But lately that’s all it seems to be about.
And we wonder why critics say that we are in still in a bubble!
I still have a notebook from my first meeting with AllAdvantage when they were getting started. I had a few very simple questions in order to work out whether this made sense:
How long do you expect the user to stay online, on average?
How frequently do ads rotate and what is the expected ad rate?
How much, on average, do you expect to pay out per user for their downline network?
How many users will you have?
Four simple questions. Then end result of some simple math led to one conclusion: For every user they brought in, they lost $10, based on their own overly optimistic starting point. Ad rates were declining at the time, and better rates for improved targeting were a myth. Better targeting is the baseline for competing for advertising money, not for raising your prices to multiples of what others charge.
These questions also ignored the inherent fraud arms race that ensued, with programs like MyAdvantage that surfed the web for you while you slept.
I liked Jorgensen, but I really felt he was clueless in this instance. Yet they continued to raise money at crazy valuations until they flamed out. I’d be incredibly skeptical if they tried to do this a second time.
Maybe they’ll crash and burn, maybe they won’t.
Regardless, I fondly remember the $50 check I got from AllAdvantage before they went under and it’ll be hard to resist trying again.
kevin/mark (16/17)
in all honesty, if you have to pay more than you take in, you’ll sink!!
that said, i seriously believe that the fundemental approach of allowing users to ‘get’ deals, based upon their queries is a seriously large opportunity, one that could potentially rival what google is doing.
again, i’m not saying that these guys are thoe ones to do it, or that a mlm based approach is suitable!
peace
A MLM approach, as long as the company responsibly calculates potential downline payouts, is a way of paying users for viral marketing. It’s a great idea and really helps to spread the product but it has a bad name because the business model is too frequently used for scams.
The more that I think about it, I don’t see how the company can lose money, except for the executive staff leaching all of the money via salaries.
They’re not paying an hourly rate, they’re just giving away worthless pre-IPO stock in the company and giving affiliate payment kickbacks.
They don’t have the obscene 50 cent an hour cost as before. They just have their profit and they’re only paying it back to the users in the form of stock.
This sounds like a really good idea…The issue though is when the users are browsing with this thing turned on, is it going to alter their behavior?
Also does the company get to keep the data? This could be useful data to understand the user browsing behavior and target ads based on the accumulated browsing history? There is also a potential tie up here with attentionTrust (http://karmaweb.wordpress.com/2006/10/19/attentiontrust/) that the founders should explore.
You are almost always usually very kind and willing to give companies the benefit of the doubt. Its rare you express concern for any company you review. I take this as a huge red flag and will warn people to stay away from this nouveau adware toting company. We’ve had enough gators/clarias/punch the monkies.
The reason it won’t work now is the same reason it didn’t work then: adverse selection. The people willing to try this aren’t the same people who will buy anything from those ads. Instead, they are just looking to earn money by browsing the internet. And while their attention is at the web site X, they are more likely to follow a contextual ad link on that web site than something from the bottom of the screen.
You said:
“We don’t always slam a company just for taking a new spin on an idea that didn’t fly in the bubble. But if the founders of the new company were part of the old company, and the business model looks a lot like a pyramid scheme, and they are saying publicly that the only reason it didn’t work the first time around was because the market crashed at the wrong time, we’re going to take a very hard look.”
Another, more sensible, option is to not look at all.
Reminds me a bit of when the Opera browser had ads. If you can stand them and a very good service is provided, then most people do not find them obtrusive.
Yes, there’s adverse selection. But the company will make money any time you buy from a site with an affiliate program without an external program. Even if the users are looking to make money on the internet, everyone buys from Amazon occasionally.
No added value here as far as I can see - the entire premise is based on greed (both on the part of the developers and the target user). Why don’t they go out and build something that actually adds value? Because they can’t.
Sorry, but this shit pisses me off.
“Another, more sensible, option is to not look at all.”
Well put. Every time shameless hucksters like this get high profile coverage we all get one step closer to Bust 2.0.
Does it add value?
If you are an Internet user, get part of the money spent back is not a bad thing as long as the net price is better than elsewhere. I would not call this “getting paid” though. Whether the stock will worth the effort depends on how much it will be worth, if anything.
If you are an advertiser, it mostly likely adds value as, at least it sounded like, you are paying a commission on sales. Assuming they did their numbers right, they can’t lose. Not that I think they are likely to do the numbers wrong.
Don’t forget that advertising is an important tool in the capitalistic society. Can our economy function without advertising channels? At least not the same way.
If you are an investor or founder, it all depends on how the company will do.
So how will the company do?
First, it is a matter of economics. Will there be enough money left to cover business costs after the payout? I don’t know until I see the real numbers.
Second, it depends on if Internet users will adopt it. I personally will not. But that doesn’t mean no one will. I suppose the multi-level payout scheme is devised to convert users. The question is, without the handsome payout AllAdvantage did in the past, is AGLOGO attractive enough to a large number of Internet users?
Then, assuming all that is good, it still depends on execution, etc.
I think that the Web2 buzz works as a laundry for the old bubbly Internet ideas…
Now, differentiation is the key to success …
I remember AllAdvantage. It paid a decent penny. It will be interestng to see what happens this time around.
Ok, so the Agloco site is finally live. I kept reading your posts and wondering when I would be able to get on and actually check it. I am going down the toolbar, and am going to email my friends about it ’cause it seems pretty cool and an easy way to passivly make cash doing what I am doing anyway: surfing.
I don’t really see why anyone would be pissed off about this. Look: if you don’t like, stop complaining and don’t download it. It’s FREE people. No one is asking you to pay for it, and no one is telling you to download it.
If you use the calculator on their site, you can see the potential cash to be had at the expense of some adds while you surf–the numbers are pretty cool.
No user got harmed with AllAdvantage (or they did?)… many people got their checks monthly
Great, another company stealing affiliate referral fees by installing software that allows then to take the money out of their pockets.
Yeah, that’s what this does, if a user clicks on an affiliate link advertised on googlel for example, this software will intercept the link and add their affiliate code to recognized merchants, which is er theft.
This also means that ads that are displayed and paid for by affiliates promoting products are basically worthless.
Hope they fail and I’ll immediately be trying to have their stealing software added to spy-bot search and destroy and Adware.
Assholes.
JoeB, i think ‘asshole’ is where you pulled the idea that the software is rewriting codes and stealing stuff. because you didn’t learn those “facts” from the software itself, thats for sure. but it’s very creative thinking that u are pulling out of your butt… are u auditioning for a software dev job?
Compared to MLM, affilate marketing, pay per click or other pay to surf were you risk your money to make money, agloco seems fair and an easier way to make money on line.
This is clearly not a pyramid scheme. Without even selling anything, how can someone misregard it as a pyramid scheme?? funny.
I’m quite neutral to all these arguments, but I do appreciate the philosophy behind AGLOCO and I do trust the founders from my experiences doing doing business with them so far. They’re fast in payment and do keep their words. I was quite impressed by that, while having to chase some other companies for money months after months.
I guess I was one of the few who made big money with AllAdvantage. I signed up over 10,000 people and made over $25,000 from them before they crashed with the Internet.
Now I see they’re back! I guess it’s time to party like it’s 1999.
S.Whiplash, care to share how the software generates cash from a sale when the user visits a merchant site and makes a purchase exactly ? And what happens when the user just clicked on an affiliate link to get there ?
People please. Must we see the man behind the curtain in order to be amazed by the power of the wizard? Why the need for explaination?AGLOCO gives you money once you download their viewbar and surf with it scrolling. You tell people about it, they tell people, you make more money. For whatever reason, I don’t feel inclined to understand the inner workings….
Hi!
I am member but I came not into my site to day. When I klick the emailadress I have give out to other, I come into innlogg site but no my: Member ID BBBC1251 was there.
My password is OdEEoD.
Roar Liljebakk
I think agloco is a very bad idea, and I also think it is a bad
thing for the Internet right now. We are in the middle of a
regrowth in the web, and people are starting to do some
very cool things, e.g. flickr, 43things, delicious, youtube,
mashups etc. Muddying these waters with a “get rich quick”
scheme seems like a bad idea at best.
The web rebirth, huh? Yes, cool things are happening, but that doesn’t mean that people cannot get easy money by allowing an unobtrusive viewbar into their internet experience….For me, AGLOCO is gonna work because it does not appear to be “muddying” any waters. If you want to be online without it, that’s your perogative. Personally I would rather get a little money while on the web….
Gosh people,
Its clearly obvious that like 90% of the people do not know what a pyramid scheme is, and this is not one. MLM is not a pyramid scheme, your terminology is damn wrong. Instead of hoping a company does good. you guys JUST BASH IT, Look at everything thats WRONG, instead of what CAN WORK.
I’d rather try it out, then to sit on the SIDE AND COMPLAIN about it never working.
JoeB - no use trying to explain idiocy to idiots. They just won’t understand.
If and when click / sam fraud EVER gets nailed down, I will look forward to this program’s collapse.
Robbing Peter to pay paul and all you’re all blind to it. The real money makers are agloco. I’m personally glad to know that the rest of the .. er.. industry.. (loosely used) has time that’s billable at about 40 cents per hour. Good luck with your scheme. Hey I hear that Adsense arbitrage is stronger than EVER, any one buying??? /sarcasm for the retards
I think the idea of people, as a whole, taking some of the internet advertising dollars from the monopoly Google (and that sad rival, Yahoo) is not a bad thing. Maybe the payout will be $2.00 a month at first, maybe it will be nothing at all. In fact, it wouldn’t surprise me if agloco keeps almost all the money and issues ’stock’ for the first few months or years. But eventually they will have to give something back to the users or else the program will be a failure.
My prediction is that this company will do very well. Most people do not have much money and any hope of getting their hands on a little more will be a strong call to action.
Feel Free to use my link to sign up please http://www.agloco.com/r/BBBG9961
or mine…. pretty please
http://www.agloco.com/r/BBBH0826
Come on…this is NOT 1999 for crying outloud! Every day more people get online to shop. 98% of my Christmas shopping was done before Dec ever got here…and I did it all online….same goes for the last several years. I do most all my shopping online. So they have your name and email address…whoopie, who doesn’t? Is there a company that does not have a web presence online? Maybe but I can tell you there were far less in 1999. What’s wrong with MLM? Almost everything in the USA is MLM in one shape, form, or fashion. Just because there are scam sites and mlm’s that don’t work does not mean all are bad because they are not. Same goes for offline as well. Agloco has incorporated a unilevel system and I think that was very wise. I know if I see deals on the viewbar, I am likely to buy and I am mighty sure I am not alone.
Why not give it a try? After all, I do a lot of my shopping online as well and if I can make a little money with it, all the better.
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