richp
05-26-2006, 06:33 AM
This is an overview of a series of papers I'll be putting on http://vs-trex.com, and here in the near future. It is in response to the growing confusion and misunderstanding that keeps coming up about the difference between "AutoSurfs", which are being called bad, and what the real problem is.
People have gotten such a simple thing confused, that I thought I should make mention of it here.
A Traffic Exchange is a system of advertising, where users get to show pages from their websites to each other. It is - literally - an exchange of viewings. "I'll look at yours, if you look at mine". A very simple basic concept.
To keep things fair, most traffic exchanges created a 'credit system'. Credits generally mean that your site will be shown in proportion to the number of other sites you look at. It's not a 100% even exchange, because the host needs to make some sort of profit to cover server fees, et cetera. Even so, this was a simple concept.
Then came paid-to-surf. This started out as an exchange buying back credits from good surfers who didn't have much to advertise. Again, fairly simple, and a service worth paying for.
About the same time, revenue-sharing came about. Person A pays to have their site shown, and surfer B gets part of the money for viewing the site, with the host keeping the difference. Really, not that different from paid-click advertising, like AdSense.
--- okay, here is where the simplicity ends ---
It seems that whenever money gets involved, some unscrupulous people try to find ways to twist it into a 'get rich quick' scheme.
Here comes HYIP and investment surfing, and the shenanigans began. A bunch of folks got the idea that they could 'promise the moon': make 10% percent profit 'on your investment' in a week, earn 150% profit in maybe 3-6 weeks. The only way this worked was by creating 'ponzi schemes', where new members' "investments" were used to pay old members their "profits". Pretty sophisticated math, which is actually illegal, since can never be enough surfers to cover the previous wave's surfing.
How crazy and complex did this get? I've seen 1 interest-based paid surf deriving its income from 7 other systems. Financially, this is like a dragon biting it's tail... it would be almost impossible to trace where the money was coming from, or going to.
All of this led to events back in January, where Storm Pay started suspending accounts, and the Securities and Exchange Commission, along with several State Attorneys General began criminal investigations into what was happening.
A newspaper near the home of Storm Pay ran an article, which was picked up on radio, and later Fox news. This article contained a quote from the local Better Business Bureau. What the BBB said, in part, was "investing in systems like autosurfs are almost always ponzi schemes". This is a true statement: If someone asks you to 'invest', you should ask for their state brokers' license... if they don't have one, stay away.
However, that's not what the newspaper said. The newspaper said "AutoSurfs are ponzi schemes and illegal". I and several other folks tried to contact the newspaper, but no luck. Really, the story was about Storm Pay, who suspended tens of thousands of user accounts (which they are allowed to do).
There are 2 kinds of traffic exchanges: Manual surf, where you click a button to move to the next site, and Auto Surf, where the pages are shown to you automatically, one after another. Neither traffic exchange system is inherently illegal, and neither is a ponzi scheme.
Unfortunately, people picked up on the "AutoSurfs are illegal", without realizing that it was <u>the investment / promised rate of return</u> that was illegal.
This was not helped by a consortium of Manual traffic exchanges, who saw this as a way to increase their roles. Some Manual traffic exchange owners seem to think there's a competition out there for surfers. This couldn't be further from the truth: more people surf every day... the internet is huge.
Later, the SEC repeated the BBB's statement correctly, and they were again misquoted, this time in the New York Times.
Now, most recently, Pay Pal has started stating concerns about "AutoSurfs", and put into their 'get rich quick" list of disallowed uses, the generic word "AutoSurf". We really don't have any recourse. It is every business' right to choose who they will and won't do business with.
That being said, I'm hoping that enough people will react to the statement by PayPal negatively, and try to convince them that they should tighten up their definition to "investment surf systems", which would be completely appropriate for them to prevent.
It's sad to know that a good idea is being tarnished by the actions of some unscrupulous folks.
It is worse to see that many hard-working webmasters will have to work harder, because of the fallout from this.
Make sure that if you hear a statement, even from someone with as many lawyers as Pay Pal, that you check the accuracy of the statement, before deciding something is 'good' or 'bad'.
Literally tens of thousands of web sites benefit from, and will continue to benefit from using traffic exchanges: both auto surf and manual surf.
Hopefully, somehow, some way, someone will get the proper message out to explain this to the general public.
Thank you for reading this.
People have gotten such a simple thing confused, that I thought I should make mention of it here.
A Traffic Exchange is a system of advertising, where users get to show pages from their websites to each other. It is - literally - an exchange of viewings. "I'll look at yours, if you look at mine". A very simple basic concept.
To keep things fair, most traffic exchanges created a 'credit system'. Credits generally mean that your site will be shown in proportion to the number of other sites you look at. It's not a 100% even exchange, because the host needs to make some sort of profit to cover server fees, et cetera. Even so, this was a simple concept.
Then came paid-to-surf. This started out as an exchange buying back credits from good surfers who didn't have much to advertise. Again, fairly simple, and a service worth paying for.
About the same time, revenue-sharing came about. Person A pays to have their site shown, and surfer B gets part of the money for viewing the site, with the host keeping the difference. Really, not that different from paid-click advertising, like AdSense.
--- okay, here is where the simplicity ends ---
It seems that whenever money gets involved, some unscrupulous people try to find ways to twist it into a 'get rich quick' scheme.
Here comes HYIP and investment surfing, and the shenanigans began. A bunch of folks got the idea that they could 'promise the moon': make 10% percent profit 'on your investment' in a week, earn 150% profit in maybe 3-6 weeks. The only way this worked was by creating 'ponzi schemes', where new members' "investments" were used to pay old members their "profits". Pretty sophisticated math, which is actually illegal, since can never be enough surfers to cover the previous wave's surfing.
How crazy and complex did this get? I've seen 1 interest-based paid surf deriving its income from 7 other systems. Financially, this is like a dragon biting it's tail... it would be almost impossible to trace where the money was coming from, or going to.
All of this led to events back in January, where Storm Pay started suspending accounts, and the Securities and Exchange Commission, along with several State Attorneys General began criminal investigations into what was happening.
A newspaper near the home of Storm Pay ran an article, which was picked up on radio, and later Fox news. This article contained a quote from the local Better Business Bureau. What the BBB said, in part, was "investing in systems like autosurfs are almost always ponzi schemes". This is a true statement: If someone asks you to 'invest', you should ask for their state brokers' license... if they don't have one, stay away.
However, that's not what the newspaper said. The newspaper said "AutoSurfs are ponzi schemes and illegal". I and several other folks tried to contact the newspaper, but no luck. Really, the story was about Storm Pay, who suspended tens of thousands of user accounts (which they are allowed to do).
There are 2 kinds of traffic exchanges: Manual surf, where you click a button to move to the next site, and Auto Surf, where the pages are shown to you automatically, one after another. Neither traffic exchange system is inherently illegal, and neither is a ponzi scheme.
Unfortunately, people picked up on the "AutoSurfs are illegal", without realizing that it was <u>the investment / promised rate of return</u> that was illegal.
This was not helped by a consortium of Manual traffic exchanges, who saw this as a way to increase their roles. Some Manual traffic exchange owners seem to think there's a competition out there for surfers. This couldn't be further from the truth: more people surf every day... the internet is huge.
Later, the SEC repeated the BBB's statement correctly, and they were again misquoted, this time in the New York Times.
Now, most recently, Pay Pal has started stating concerns about "AutoSurfs", and put into their 'get rich quick" list of disallowed uses, the generic word "AutoSurf". We really don't have any recourse. It is every business' right to choose who they will and won't do business with.
That being said, I'm hoping that enough people will react to the statement by PayPal negatively, and try to convince them that they should tighten up their definition to "investment surf systems", which would be completely appropriate for them to prevent.
It's sad to know that a good idea is being tarnished by the actions of some unscrupulous folks.
It is worse to see that many hard-working webmasters will have to work harder, because of the fallout from this.
Make sure that if you hear a statement, even from someone with as many lawyers as Pay Pal, that you check the accuracy of the statement, before deciding something is 'good' or 'bad'.
Literally tens of thousands of web sites benefit from, and will continue to benefit from using traffic exchanges: both auto surf and manual surf.
Hopefully, somehow, some way, someone will get the proper message out to explain this to the general public.
Thank you for reading this.