Worldwide Success

The economic power of the internet is unquestionable.  Some of the largest companies in the world, such as eBay, Yahoo, Amazon and Google gained their wealth from exploiting the internet’s economic model.   Yet, there is a disparity that up to this point has not yet been reconciled.  The very people who produce most of the content on the internet and who are responsible for the engine that drives this economic power are not receiving their fair share of this bounty.  We are talking about you, the user.  Yes, the same people that Time Magazine called the ‘Person of the Year’ for producing the content that has elevated sites like Flickr, MySpace and YouTube to prominence.  One company is daring to change this paradigm by paying users to surf the internet.  Let me introduce you to Agloco.

Agloco’s proposition is quite simple.  They are developing a piece of software that they call the ‘Viewbar’ which is very similar to toolbars from Yahoo and Google that you can embed into your browser.  This software tracks your internet surfing habits and provides companies that are eager to target their services and advertisement to a particular market segment the ability to do so.  Companies are willing to pay a premium for such targeted services and advertisement because they are more effective than their untargeted counterparts.  Therefore, they would be willing to pay Agloco for the privilege of targeting users who agree to use the Viewbar, who Agloco refers to as members.  Agloco in turn pays its members the revenue it collects from these customers, keeping a portion of the revenue to pay for its expenses.

This concept is actually not new.  The founders of Agloco tested this business model during the dot-com boom under a company called AllAdvantage.  The concept worked well, but the company ran into trouble because of cash-flow issues and venture capital investment pressures, resulting in the demise of AllAdvantage.  However, the founders of the company are so convinced of the feasibility of this economic model that they are starting again, this time better prepared to handle cash-flow issues.  They are also creating an ownership model in which members of Agloco will get paid not only in cash, but also in company shares, which makes the members true owners of the business.

Most of the founders of Agloco attended Stanford’s business school, where they got together and formulated the business plan.  Most people know that the founders of Google were also Stanford students who, like so many other Silicon-Valley entrepreneurs, started their businesses by formulating new concepts while in this fertile academic environment.  Is this a guarantee that Agloco will succeed?  Not at all.  But the caliber of the Agloco team gives credibility to the potential that this company has.

One of the challenges that Agloco faces is that it needs to grow its community of members very quickly in order to be successful.  In order to do just that, it has created a referral model with incentives for its members to recruit other members.  It is a concept very similar to what is used in multi-level marketing (MLM) which actually scares some people away from Agloco due to the bad connotations associated with this model. Getting a piece of the action from your referral’s referrals conjures up images of Ponzi schemes, which are actually illegal.  This alone is enough to scare some people away.  But the referral process used by Agloco is not only legal, it is an effective way to quickly build a community of members and reward the early members more abundantly than the late comers.

What are the risks?  Financially there are no risks for the users.  You don’t have to pay anything to become a member or to use the Viewbar software which you can download for free.  Worst case, if the company folds, you lose nothing.  There are however some concerns from the users about privacy and the possibility of having spyware in the Viewbar.  Akshay Mavani, a co-founder of Agloco has affirmed that there is no spyware in the Viewbar.  The Viewbar simply tracks your surfing habits and places ads on your screen based on this information.  In a sense, it is no different from Google’s toolbar, for instance.  In fact, Ray Everett-Church, who is Agloco’s Chief Privacy Officer and an internationally acclaimed expert on privacy law guarantees that there is no spyware in the Viewbar.  Agloco also says that everything the Viewbar tracks will be disclosed in the privacy statement and that it will not sell or rent your personal information to anyone.

If Agloco succeeds in building a large community around its business model it could do very well.  Agloco’s goal is to have 10 million members by July of 2007.  Early members who provide referrals will benefit the most from the network effect of these referrals.  The Agloco Viewbar is scheduled to be available in March, and once the word gets out the competition for recruiting new members will start getting more difficult.

Since you have nothing to loose, you may want to consider becoming a member of Agloco and start referring friends now.  If the concept catches on, you could do very well by participating in Agloco’s early success.  If not, you don’t loose anything. 

In the spirit of full disclosure, if you sign up with Agloco by clicking on a link from this article you will become my referral.

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