Kerber of WurldMedia Indicted Again

July 24, 2008 Filed under: Adware, Affiliate Marketing, Legal Issues — Kellie AFP @ 10:36 am

A grand jury has handed down another indictment against Gregory Kerber, former chief executive of WurldMedia. This time the indictment is for grand larceny in the third degree. The allegations are that Kerber transferred $30,000 from Buyersport to his personal account.

Kerber was indicted last year under separate charges related to the sale of WurldMedia to Roo. At that time I commented that hopefully a deeper look would be taken into the financial goings on at Buyersport. It would appear that has indeed happened, although not exactly along the lines I mentioned. On the other hand, all the details haven’t been made publicly yet.

While Kerber has settled the charges from last year, pleading guilty to one of the counts, his legal woes made not be over yet.

TimesUnion.com is reporting that Kerber and his wife filed for Chapter 13 bankruptcy last month. Saratogian.com that the Saratoga District Attorney’s office is working closely with the US Attorney’s Office in the exploration of a possible criminal case that falls outside of the Saratoga’s District Attorney’s office.

Proposed Settlement In ValueClick/CJ Adware Class Action Lawsuit

July 6, 2008 Filed under: Adware, Affiliate Marketing, Legal Issues — Kellie AFP @ 6:21 pm

A proposed settlement has been reached and preliminarily approved in the class action lawsuits on behalf of publishers and advertisers against ValueClick/CJ. The cases centered on the presence of adware in CJ/BF and the impact on both publishers and advertisers. The two cases were consolidated earlier this year by the courts and the settlement covers both cases.

A court date of January 2009 has been set for a Fairness Hearing to determine if the settlement will have final approval by the court.

I’m posting two documents obtained through the courts which give detailed information regarding the settlement and the procedures which will follow.

[Propsed] Order Preliminarily Approving Settlement, Prelimanily Certifying Classes, And Providing For Notice 

Exhibit A: Agreement For Settlement Of Carrier And NAR Litigation

VCLK/CJ deny all allegations in both cases but agree to the following settlement (summarized):

1. $1 Million to be paid into a Common Settlement Fund. Both Advertisers and Publishers will be compensated from this fund. Thirty (30) percent of the fund will be allocated to Advertisers and seventy (70) percent to Publishers of the class. The first document linked above defines both classes and outlines how the fund will be dispersed.

2. An independent audit of CJ’s Network Quality practices and efforts related to detection, prevention and response to third parties using software to force or hijack clicks on CJ. The Auditor will submit a report and make recommendations on how CJ can improve and enhance Network Quality practices. The parties will then issue a statement to Class Members summarizing the measures to be implemented by CJ in response to the Audit and report.

3. CJ will begin tracking additional data/information and will implement enhancements of its primary investigative tools and automated software investigative tools. This additional data includes (quoted from the Settlement Agreement):

49. Tracking of Additional Data and Information: Defendants agree that no later than 30 days after the date that the Court approves the Parties’ Stipulation for Dismissal and dismisses the Action with prejudice, CJ will supplement its existing detection procedures and practices by implementing systems responsible for tracking the following categories of data and information:

A. Prior Publisher Investigations: CJ will design and implement fields and/or tables in its database that identify and record: 1) the number of instances on which any publisher has been assigned a “fraud role” or has been under investigation for the potential use of malicious software to “force” or “hijack” clicks; 2) the time period of each such investigation; 3) the CJ employee(s) responsible for conducting the investigation; and 4) the outcome of the investigation. CJ agrees to maintain such information for a period of no less than 3 years.

B. Termination/Deactivation Codes: CJ will design and implement detailed codes identifying the specific reason(s) that a particular publisher was deactivated or terminated from its network, including specific codes identifying whether a publisher was terminated for “forcing” or “hijacking” clicks using malicious software. CJ agrees to record and preserve such reason codes for each publisher deactivated or terminated from its network for a period of no less than 3 years following such deactivation or termination.

C. Software Testing: CJ will design and implement a database and/or table identifying all software that is manually tested or investigated by CJ to determine whether it is being utilized to “force” or “hijack” clicks, and for each such software application, will record in such database and/or table: 1) the particular software application tested; 2) the time, date and manner in which such software was tested; 3) any publishers determined to be using such software; and 4) the conclusions of the testing. CJ agrees to record and preserve such information for a period of no less than 3 years.

50. Primary Investigative Tools: Defendants agree that no later than 30 days after the date that the Court approves the Parties’ Stipulation for Dismissal, and dismisses the Action with prejudice, it will implement the following enhancements to its Network Quality procedures:

A. CJ will continue to circulate to all members of its Network Quality team a daily “hijack report” identifying all instances of two clicks for the same end user being dropped within five seconds of each other, and will assign a member of its Network Quality team to be principally responsible for reviewing daily “hijack” reports and for investigating instances of potential click “hijacking” based on such reports.

B. CJ will begin to circulate a weekly “high conversion report” to all members of its Network Quality team identifying all publishers with a lifetime conversion ratio greater than 30% and a percentage of “null” referring URLs greater than 50%, and will assign a member of its Network Quality team to be principally responsible for reviewing weekly “high conversion reports” and for investigating instances of potential “forced” clicks using malicious software based on such reports.

C. CJ will agree to consider in good faith implementing any additional investigative reports or tools recommended by the auditor to assist in its efforts to detect forced click and hijacking activity.

51. Automated Software Investigative Tool: Defendants agree that no later than 30 days after the date that the Court approves the Parties’ Stipulation for Dismissal and dismisses the Action with prejudice, CJ will implement an automated testing protocol utilizing a proprietary software tool designed to detect particular publishers’ use of known malicious software applications. The tool will run on a continuous basis, and the independent auditor will be permitted to evaluate the automated tool and to make recommendations concerning the design and implementation of the automated tool in his or her Report.

52. Preservation of Publisher Data During Publisher Investigations: Defendants agree that no later than 30 days after the date that the Court approves the Parties’ Stipulation for Dismissal and dismisses the Action with prejudice, CJ will implement an automated system for preserving all “click data” associated with a particular publisher during any period of time that such publisher is under investigation for the potential use of malicious software to “force” or “hijack” clicks on CJ’s network. Notwithstanding the foregoing, no failure to preserve such data during the pendency of any such investigation shall be admissible to establish liability or breach of any discovery obligation in any collateral litigation, and no inadvertent failure to preserve such data shall give rise to any claim for breach of this Settlement Agreement.

The agreements with regards to compliance efforts are more significant than the amount of dollars reached in the settlement, in my opinion. I am glad to see such issues addressed in the agreement.

More information regarding who is included in the classes, procedures for opting out of the settlement and mechanisms for opposing the settlement terms can be found in the documents linked at the beginning of this post.

More information regarding who is included in the classes, procedures for opting out of the settlement and mechanisms for opposing the settlement terms can be found in the documents linked at the beginning of this post.

Zango Launches Ad-Supported Widgets

February 22, 2008 Filed under: Adware — Kellie AFP @ 11:52 am

Zango announced on their blog yesterday that they launched their first ad supported widget

The widget will allow people play Extreme Racing 2 through the widget for free. Of course it’s free…it’s Zango. :) Guess what though? Users won’t have to install Zango software to play the widget game. WOW!

So how is the widget ad supported? There will be a text link at the beginning and end of the game. What is the text link for? More free games on Zango….which does require the Zango software to be installed.

Zango also said that this “inaugural” widget will not require the installation of Zango adware to play the game through the widget. This leads me to possibly expect more widgets from them in the future. It also makes me wonder if future widgets might possibly require Zango adware installations.

I do so love following Zango’s blog.

What Became of ExactAdvertising?

January 28, 2008 Filed under: Adware, Affiliate Marketing, Legal Issues — Kellie AFP @ 1:13 pm

ExactAdvertisng…remember them? They were behind such lovely adware applications as BargainBuddy (contextual pop-up application like Zango), CashBackBuddy (rebate reminder software), ExactSearch (PPCSE toolbar) and Bullseye Network (BargainBuddy rebranded).

I’ve noticed in the last year or so that several of their adware applications have been dead in the water so to speak. Installation web sites owned by ExactAdvertising were still up and had downloads available, but the adware did not function when installed. I wondered what was going on. Did they decide to pull out of the adware business or was something else happening? (more…)

AdultFriendFinder.com and the FTC

December 7, 2007 Filed under: Adware, Affiliate Marketing, Legal Issues — Kellie AFP @ 12:23 pm

News of yet another settlement between a government agency related to adware. This time it’s AdultFriendFinder and the FTC. Maybe I need to start tagging these as “chickens coming home to roost.”

AdultFriendFinder and the FTC have reached a settlement over consumers being “pelted” with sexually explicit ads. The short story is the FTC says AdultFriendFinder delivered sexually explicit ads to it’s network of sites to consumers who weren’t looking for such and that’s against the federal law. AFF can’t do that anymore, either themselves or by their affiiates. From the FTC press release:

“Such ads were displayed to consumers who were searching online using terms such as “flowers,” “travel,” and “vacations.” In some cases, defendant’s sexually explicit ads were distributed using spyware and adware.” (more…)

Wurld Media Saga Continues

December 7, 2007 Filed under: Adware, Editorials, Legal Issues — Kellie AFP @ 10:27 am

Larry Rulison. over at the TimesUnion.com, has more to report this morning in the continuing indictment of two top WurldMedia executive. It seems to Gregory Kerber, former CEO of Wurld Media, is still employeed by the ROO Group, the publicly traded company who purchased Wurld Media this summer for $4.3 million. Kerber was hired by ROO after the purchase of Wurld Media as a senior vice-president of business development.

I wonder if Kerber had anything to do with all those pop-ups of Roo.com I was getting through adware? Adware inventory buys can be a pretty quick and cheap way to get a site’s traffic figures up when setting those good ole Rate Card prices for advertising on the site. Anyway, back to the Friday fun provided by Larry….

It seems a reporter from TimesUnion went to the offices of Roo, as a good reporter should, and those offices were located in a “nondescript building” with a locked front door. They did have a couch and Christmas tree in the front lobby behind that locked door though. Eh….Merry Christmas.  

Evidently, the Saratoga District Attorney’s office is still being a bit tight lipped on the specifics of charges brought against Kerber and Saxton. According to Times Untion, Assistand Distric Attorney of Saratoga did say

“The grand larceny and money laundering charges center on “certain financial transactions that occurred” related to the distribution of the proceeds from the sale to ROO earlier this year, Wendling said……Wendling would not say where authorities believe the proceeds ended up, although he said it was another entity separate from Wurld.”

My curiosity is piqued. I wonder if it ended up in the Lexy Foundation? No, that’s not news only me being tongue in cheek because it’s Friday. But those who were in affiliate marketing back in the early days of WurldMedia, Morpheus and Buyersport should remember about the Lexy Foundation. Just in case something changes on the site in the future:

Lexy Foundation

Formed by the founders of Wurld Media….to assist the sick, disabled, downhearted, and poor. It was also used to justify the Buyersport software claiming the traffic of other affiliate’s as their own. Even when the software was just getting installed by users of Morpheus who were really just interested is being able to download free music, movies, software, etc. That downhearted part always did make me laugh. All those halos in the logo and with mouse-over of the menu seem pretty funny right now as well.

I do hope that during all this investigating going on that some official probing has happened or will happen into the Lexy Foundation as well. All considered, just to be sure that everything is on the up and up with the nonprofit.

I’ll continue to be watching as all of this progresses and more specific information regarding the charges become public record.

Wurld Media Execs Facing 50 Years Jail Time

December 3, 2007 Filed under: Adware, Legal Issues — Kellie AFP @ 10:41 am

Yet another adware company is facing legal woes. It looks like the stuff has hit the fan for Wurld Media. The CEO, Gregory Kerber, and the CFO, Richard Saxton, were arraigned on Friday on a number of felony and misdemeanor charges. The charges include second-degree grand larceny, third-degree grand larceny, fourth-degree money laundering, first-degree falisifying business records, first-degree offering a false instrument for filing, failure to pay benefits, second degree criminal contempt and failure to withhold income taxes. This follows a seven month investigation by Spa City police and State tax agency. The two face a possible 50 years in jail. (more…)

The Path of Direct Revenue in Social Media

November 9, 2007 Filed under: Adware — Kellie AFP @ 10:47 am

What’s that all elusive path to direct revenue in a social media web site? We found a prime example and thought we’d share it with others.

Jango is a new social music site where you can listen to your favorite music, share it with friends, rate songs…all the usual social site type of stuff. The site is in beta right now and membership is by invite only.

The CEO of Jango is Daniel Kaufman and according to their web site “was founded in New York City in November 2006 by a group of old friends from Vermont, Sweden and other music hotbeds” Daniel Kaufman? Now that sounds familiar…someone who has been around the Internet biz for a while.

Staying with the theme of social sites, Kaufman’s LinkedIn Profile gives a bit more info.

kaufman.jpg

Oh yeah, he was one of the founders and CEO of Dash.com. Remember them? It was an AllAdvantage type of thing. Install a toolbar and get paid to watch ads while you surfed. Like all the other such companies, they went belly up.

But there’s a bit of a gap in employment experience. What was Kaufman doing between January 2001 and November 2006? Well he was busy being the co-founder and executive over at DirectRevenue. Along with his friend and co-founder from Dash, Joshua Abram. Of course DirectRevenue is now a thing of the past between the actions of the FTC and NY Attorney General. For those who may not be familiar with the illustrious histories of Kaufman and Abram’s past Internet businesses, this article from MSNBC will give you at least a look at the tip of the iceberg. I really don’t see why the DirectRevenue days were omitted from is LinkedIn Profile.

But there you have it…the path of Direct Revenue…you get the idea. I do wonder who his other “friends” are involved in this venture.

WhenU Targets Hispanic Community

November 2, 2007 Filed under: Adware — Kellie AFP @ 1:06 pm

MeMedia (formerly Whenu) is expanding into the Hispanic community with the launch of MeMedia Latino. Don’t know what else there is to say about it. Except for some reason the name MeMedia cracks me up every time I hear it. And I guess the Hispanic community is entitled to adware focused towards them as well as any other ehtnic group?

Another One Bites The Dust

October 24, 2007 Filed under: Adware — Kellie AFP @ 8:57 am

And another gone, and another one gone, and another one bites the dust……

That would apparently be DirectRevenue. Affirmation of my general philosophy that what goes around comes around..eventually. A business model built upon bullshit just isn’t sustainable long-term. At some point, no matter how much spin is put out there and to how much the spinners may start believing their own spin, someone who has the ability is going to come along smell the stink and lower the big whammy. No one is immune. No one. A fact that a few others should be heeding at the moment. (more…)

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