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Friday, December 01, 2006

History of Agloco (AllAdvantage)

AllAdvantage was an Internet advertising company that positioned itself as the world’s first "infomediary" by paying its users/members a portion of the advertising revenue generated by their online viewing habits. It became most well known for its slogan "Get Paid to Surf the Web," a phrase that has since become synonymous with a wide array of online ad revenue sharing systems (see, e.g., Paid to Surf).

AllAdvantage was launched on March 31, 1999, by its four founders Jim Jorgensen, Johannes Pohle, Carl Anderson, and Oliver Brock. During its nearly 2 years of operation, it raised nearly $200 Million in venture capital and grew to more than 10 million members in its first 18 months of operation. Within six months of the launch it was among the most visited web properties according to Nielsen/NetRatings and other Internet traffic survey firms and stayed within the top 20 throughout much of its existence.

AllAdvantage contributed several concepts to the marketplace that continue to have impact today. For example, the company’s Viewbar software was one of the earliest desktop user tracking and ad targeting technologies. The Viewbar displayed advertisements in a narrow application window that could be docked to the bottom of the user's screen, targeting those advertisements to the content being viewed by the user as they browsed websites. The same technologies, minus the permission of users or monetary compensation, became the basis of the Adware and Spyware industries.

The company also appointed the world's first corporate Chief Privacy Officer, creating the role as a senior level executive responsible for protecting the privacy and security of user data and managing a variety of risks and threats to the integrity of the service. The company appointed privacy lawyer Ray Everett-Church to the newly created position in August 1999, starting a trend that quickly spread among major corporations, both offline and online. By 2001, the non-profit research organization Privacy and American Business reported that a significant number of Fortune 500 firms had appointed senior executives with the title or role of Chief Privacy Officer.
AllAdvantage is perhaps most remembered for its successful adaptation of the "viral marketing" concept, a term first coined by the venture capital firm Draper Fisher Jurvetson. In viral marketing, members of the service promote it to their friends and acquaintances, which AllAdvantage enhanced by adding a compensation component, rewarding users for the number of members they successfully referred. In a May 2000 article for Red Herring Magazine, Steve Jurvetson cited AllAdvantage as a prime example of viral marketing success.

AllAdvantage ultimately fell victim to the sharp decline in advertising spending as the dotcom bubble burst and the U.S. economy entered a recessionary period in mid-2000. AllAdvantage planned an initial public offering of stock in early 2000, underwritten by legendary investment banker Frank Quattrone and his firm Credit Suisse First Boston. As the IPO market continued to sour through mid-2000, the offering plans were cancelled. The company continued to seek new sources of revenue and expanded its offerings to include sweepstakes. But the company finally halted consumer-facing operations in February 2001. By the time it closed its doors, the company had paid out over $120 million to its members.

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