Where are they now: AllAdvantage.com

"Where Are They Now" is a bimonthly series based on the popular Industry Standard special feature, in which we profiled 10 dot-coms from the Web bubble of the late 1990s (see the list of companies on page two). Feel free to read or leave comments at the bottom of this page. You can also leave suggestions for future Where are they now? installments in the comment form on this page.

Founding: AllAdvantage launched in 1999, co-founded by CEO Jim Jorgensen, previously CEO of Challenger Sports, a sports training company. Other co-founders were vice president of corporate development Carl Anderson, vice president of product management Johannes Pohle, and CTO Oliver Brock. The company raised $200 million in two venture capital rounds, with Softbank as lead investor.

History: AllAdvantage tried to build a successful company by paying users to view ads as they surfed the Web. In an email interview with The Industry Standard, Mauro Calvi, vice president of international for AllAdvantage, explains the concept. "The AllAdvantage site was fundamentally a sign-up and download page," he says. "Users would register, obtain a unique ID and download a 'viewbar', or an applet that sat at the bottom of your screen and rotated banner ads while tracking the user's surfing behavior."

As part of the emphasis on privacy (the management prided itself with having created the first chief privacy officer position), the company would stress that the user could turn tracking on or off. Surfing profiles created through the viewbar (see inset photo) would target the user with relevant advertisements. To grow its userbase to a meaningful size, the company launched one of the most successful viral marketing schemes of its day. "Get Paid to Surf the Web" soon became a well-known slogan.

While AllAdvantage paid members as much as 53 cents per hour of surfing, another component that drove viral growth was paying members for referrals. Members who got the big checks made the bulk of their loot off of recruits. It was classic multilevel marketing, although some considered it a pyramid scheme: The more people you convinced to sign up, the more money you could make. Spam was an early problem as members attempted to recruit "friends" via newsgroups and message boards, but the company eventually terminated accounts of those with too many spam complaints. Other users employed free, downloadable programs that simulated human surfing habits. This type of fraud was difficult to stamp out, despite the company's vigilance about updating its software to combat such scams.

Ad buyers could also be skeptical. As one online agency executive stated in a June 1999 Industry Standard article, "I doubt any of our clients would be interested in the kind of user only looking at an ad to make a cent or two." As of June 2000, AllAdvantage had a total of 6.5 million members. In July of the same year, the company took in $14.4 million in revenue but paid out $49.8 million -- and had lost $102.7 altogether.

What Happened: The company made numerous turnaround attempts, to try to reverse the slide. It informed its U.S. members in June 2000 that they would get paid for fewer hours of surfing per month -- 15 instead of 25 -- at 53 cents per hour. Soon after, market conditions forced the company to pull its planned IPO, but it wasn't ready to throw in the towel yet. AllAdvantage once again retooled its pricing structure, giving members 20 cents an hour for 20 hours of surfing per month -- or just $4 per month, max. It also offered members the chance to win a daily sweepstakes and planned to allow members to spend their accrued cash on products online. Another strategic move: Creating an ad network to sell space on third-party sites.