The Infomediary
In February 1999, four former/current Stanford students (Jim Jorgensen, Johannes Pohle, Carl Anderson, and Oliver Brock) sat around in the backyard of a house on the Stanford campus and created a new concept – the online infomediary. They realized that individual users of the Internet, by their actions and the information they were providing (both willingly and not), were creating tremendous value. Yet none of this value was accruing back to the individual users.
They also realized that individuals held much more information about themselves which they might be willing to share if they would share in the profits from this information, and if other conditions - such as privacy and security - were satisfied. They knew that companies were willing to “pay” for increased information about users. But no system existed to bridge the gap between these two parties.
AllAdvantage.com
So, on March 31, 1999 they launched a website known as AllAdvantage.com in an attempt to bridge this gap. By downloading and using the AllAdvantage.com Viewbar, members were effectively “renting” some of their computer screen and their clickstream data for hourly cash payments.
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.
This “Get Paid to Surf the Web” concept proved wildly successful with consumers. Tens of millions of people are happy to share some non-personal information and share in the profits that are being made on the Web, even though this was being questioned in the business press. The concept also proved to be highly successful in generating revenues, as most people agree that AllAdvantage.com generated more revenue in its first 12 months of operations than any online consumer/advertising company in history.
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. The company’s practice of compensating existing members for referring new members led it to become one of the most heavily promoted websites of its time. That popularity was reflected in the ranking of AllAdvantage.com among the top 20 of many website traffic indices during most of the company’s existence, including Nielsen//NetRatings.
AllAdvantage contributed several concepts to the marketplace that continue to have impact today.
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.
The Decline
AllAdvantage ultimately fell victim to the sharp decline in advertising spending as the dot-com bubble burst and the U.S. economy entered a recessionary period in mid-2000. The revenues from the business could not keep up with the rapid growth in members (and their associated fixed hourly costs). So they unfortunately had to close the business, even though new members were continuing to join the network. AllAdvantage planned an initial public offering of stock in early 2000, underwritten by renowned 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.
Ultimately – and unfortunately rather quickly – AllAdvantage.com failed as a company because they relied too heavily on venture capital financing and their growth in members far outstripped their growth in revenues early on. Put simply, they signed up members in Internet time and sold ads (their primary form of revenue) in old-fashioned media time. The AllAdvantage.com model started paying members as soon as they downloaded and started using the Viewbar, but it took time to monetize those incremental hours.
While they had no choice but to shut down the business, AllAdvantage.com did deliver everything it promised to members: They mailed out over $120 million in checks to members, and advertisers delivered the most targeted, information-rich advertising opportunity on the Web.
The Next Revolution
The company maybe failed, but the ideas behind it never did…
Almost six years later… On 20 November 2006, it was reported that several AllAdvantage founders were reincarnating the business under a new company called… AGLOCO™.”
Will you be a part of the next Internet Revolution?
It’s completely FREE, and the sooner you get started the more money you can make. What are you waiting for?
