Follow-Up: No Autosurf Cure For Struggling Newspapers

Our site has been serving more pages, fueled in large measure by readers’ interest in the AdSurfDaily case and our reports on Ponzi fraud and securities fraud.

We got a mention in the Seattle Post-Intelligencer last week (and later on Google News, which picked up the P-I column) in response to our column on whether the paper could save itself by employing the autosurf business model.

Lots of people want folks to believe that autosurfing is a perfect machine that cures all financial ills. We asked why a famous newspaper such as the Post-Intelligencer, at death’s door, wasn’t installing an autosurf script to save itself if this purportedly curative model was all it was cracked up to be.

After all, the P-I actually is a professional advertising business, one with an actual product — not a company that pretends to be a professional advertising business, as is the practice of virtually all autosurfs. The P-I employs professional sales people, professional accountants, professional designers, professional artists, professional writers — people who know advertising inside and out.

Why not leverage its marketplace advantages and existing readership base and enter the autosurf business? To hear autosurf operators tell it, thousands of small business owners in Greater Seattle — and the entire audience of the newspaper — could earn handsome sums if the paper installed a script that rotates ads that people click on to earn “rebates.”

So easy a six-year-old could do it!

The P-I, according to autosurf operators, could keep 50 percent of the take and use the money to subsidize the print publication, save lots of jobs, save money for a Rainy Day and make Hearst’s balance sheet the envy of Wall Street.

We speculated that the P-I, even at death’s door, didn’t install a surf script because it had no interest at all in harming people and destroying the credibility it had accumulated through its storied history. People getting harmed is perhaps the most common result of the autosurf trade.

The notion that the paper even would consider a surf model always was just plain silly. But we raised the question because lots of people would have you believe there is something noble about the model, something magical, something curative.

If the print edition of the P-I dies, it will die with its nobility, its honor, its rich history of service and value intact.  So will a lot of print publications that also have websites and the same marketplace advantages as the P-I.

Good people get hurt — good people lose jobs — when one technological age ends and another begins. Some people will recover quickly. Others will recover as the overall economy improves. There are no guarantees that the salary levels they once enjoyed will be reached again.

People perhaps will have to learn new skills and find new ways to compete. They might have to work twice as hard to earn half as much money. The reality is that legitimate wealth can be created only through legitimate effort. It is possible, of course, to accumulate large sums of money through illegitimate effort, but it’s not legitimate wealth; it is the proceeds of a crime.

Legitimate Firms Won’t Drink From The Autosurf Well

The New York Times yesterday carried a story about upheaval at America’s top newspapers. The Times interviewed editors and publishers. Not a single one of them even mentioned the word “autosurf.”

When the ailing newspaper business isn’t willing to take the autosurf cure to save itself, it gives people contemplating spending money with a surf lots of useful information.

Elsewhere yesterday, though, plenty of autosurf operators were telling the Web-viewing public that advertising riches were right around the corner if only business owners — advertisers — would plunk down sums ranging from $6 to $9,500.

Advertisers simply could view other advertisers’ ads for 10 minutes a day, and receive back a daily “rebate” ranging from 1 percent to 12 percent. In short order — at daily interest rates that would cripple banks — the advertisers would receive back 100 percent of their ad spend and profits in excess of the spend.

Some of the autosurf sites excitedly tell advertisers not to worry, that they don’t have to buy anything from the other advertisers. The only thing they have to do is view ads.

Yes, “Look at the ads but don’t worry about buying anything” is part of the autosurf sales pitch — a pitch that normally includes tortured construction after tortured construction, messages at odds with themselves. Don’t people already know they don’t have to buy anything if they choose to look at an ad — in an autosurf or elsewhere?

Viewers of the autosurfs are called “qualified consumers,” members of a highly appealing “captive audience.” A new wrinkle is to give them important-sounding titles such as “Account Executive” and “VIP.”  The surf’s gambit is that you’re dumber than a box of rocks and actually will be overcome with joy to become a qualified consumer and account executive yourself — perhaps even one with VIP status for an additional fee.

Should you do any of these things, of course, the knowledge that you don’t have to buy anything from anybody is certain only to add to your joy. This means, of course, that nobody has to buy anything from you, either. Everyone just sits around clicking on ads. Fabulous profits stream in so long as you continue to purchase ads while not worrying about buying or selling anything.

Sometimes the surfs say things such as, “Better than Google!” or “Is this the new Microsoft?” or “Web 3.0 has arrived!” or they’re “Revolutionizing” advertising or they have a “Unique” revenue-sharing model.

What the autosurf operators don’t tell prospects is that the U.S. government views them as purveyors of unregistered securities that are taking money from incoming investors to pay older investors — the classic Ponzi set-up. And they don’t tell prospects that federal prosecutors never have lost a Ponzi case against an autosurf.

They also won’t tell prospects that some of their autosurf colleagues set up the business by installing a simple script, throw up some graphics, pay people for a while to keep new money coming in — and then run with large sums of cash, only to set up shop elsewhere and repeat the scam.

No television station will touch the autosurf model. No radio station will touch the autosurf model. No dying newspaper will touch the autosurf model, not even to save jobs. It is the exclusive province of scam artists and practiced hucksters — as well it should be.

They Read It In The Newspaper

The big news in the autosurf world last week was the surrender to forfeiture of Andy Bowdoin and AdSurfDaily, which gave up its claims to tens of millions of dollars seized by the government in August amid wire-fraud, money-laundering and Ponzi allegations.

Members read about it in the newspaper — and on websites and Blogs. ASD didn’t announce its capitulation on its Breaking News website.

It also didn’t announce that a second forfeiture complaint had been filed last month to seize other assets tied to the firm. Members again read about it in the newspaper — and on websites and Blogs. The St. Petersburg Times has done some fine reporting on the ASD case.

Among the property the government seeks in the second forfeiture complaint is a home whose mortgage allegedly was retired with $157,000 in Ponzi proceeds; it’s the home Andy Bowdoin’s stepson shares with his wife. Prosecutors said the couple also obtained a 2008 Honda CRV with Ponzi proceeds.

On June 10 and June 11 alone, prosecutors said, Bowdoin family members used nearly $240,000 in Ponzi proceeds to make personal purchases. The purchases were made just days after a company rally in Las Vegas had concluded. Millions of dollars were collected at the rally.

Prosecutors also noted that Andy Bowdoin bought a $50,000 Lincoln shortly after another multimillion-dollar rally in Miami, and that ASD funds were used to purchase a 20-foot Triton Cabana boat, jet skis, trailers — and another car, an Acura.

The December forfeiture complaint also cites a claim that Russian hackers stole $1 million from the company and that Bowdoin didn’t call the police or other authorites to report the theft. In addition, it paints a picture of ASD insider’s plotting ways to steal even more money.

Insiders already had removed hundreds of thousands of dollars from the company, thus making ASD even more of a Ponzi, prosecutors said. “Ad packs” were given away like cash, and rank-and-file members — unbeknownst to them — were shouldering the burden to pay for all of the insider manipulations.

ASD’s experience should have been a huge setback to the autosurf trade — you know, the trade that pitches a miracle cure for small businesses.

But the surf operators are a resilient bunch who’ve reportedly taken their show on the road, locating surf sites in Panama and Uruguay. The cure is portable it seems, and yet we can’t cite a single example of a prominent company willing to stake it reputation and bet the value of its brand by taking a drink from the well.