All Over at AllAdvantage

Ad-sponsored surfing program AllAdvantage has given up on trying to make money by paying people to look at banner ads as they browse the Web.

“We are sad to report that the major changes in the marketplace that occurred during the last year now require that we close the AllAdvantage Viewbar [a window that displayed banner ads while users surfed] and our pay-to-surf, sweepstakes and other incentive programs,” states a message on the AllAdvantage Web site.

“The advertising and capital markets have changed so fundamentally that it is now impossible to continue our infomediary incentive programs and benefits, including the Viewbar software.”

Spokespeople from liquidation firm DoveBid confirmed that it plans to auction off at least some of AllAdvantage’s assets — including servers and office furniture — later this month.

It isn’t known whether the Hayward, Calif.-based firm is fully out of business, although the voicemail of chief executive officer Jim Jorgensen was disabled, as was that of AllAdvantage’s public relations staff. Calls left in a general mailbox were not returned by press time, and a previously posted number for technical questions was out of service.

The company’s corporate information was also disabled on the site, although it did provide instructions for uninstalling its “Viewbar,” and said in the front-page message that it would not sell, lease, or distribute user information to third parties.

The company, which launched in 1999, went through a number of changes in its business model, each time prompting speculations about its viability. A tendency toward secrecy and reluctance to answer press inquires didn’t help stem rumors that AllAdvantage was in trouble.

After all, AllAdvantage.com earned most of its revenues from banner ads on its Viewbar, and the problems facing online advertising especially impacted the pay-to-surf players, for which member payments were often their single greatest expense.

Following a pulled IPO in June, AllAdvantage was forced to retool its payment model several times, first reducing the maximum cash it paid users, and then offering sweepstakes entries as an alternative to cash — each time raising member ire.

Rumors only increased when a similarly positioned firm, Los Angeles-based mValue, shuttered its doors permanently in October, after having tweaked its own payment system several times.

The company also came under heat from members who alleged that it was often late in paying, although it publicly denied any culpability. Many members also claimed that the firm routinely invalidated certain legitimate users’ accounts on the pretense of fraud, to avoid payout. This too, the company denied.

In September, AllAdvantage began to give signs that it was moving into what would become one of its new business areas, striking a technology licensing deal in Japan. But technology apparently didn’t pan out as a viable business for the firm — it never confirmed whether it had landed any clients other than the one it has in Japan, which is actually a joint venture between itself and a major investor, Softbank.

It is not known whether the joint venture, AllAdvantage Japan, will continue; calls to Softbank were not returned by press time.

In November, AllAdvantage quietly cut 35 percent of its staff — about 150 staffers — and said it would begin revamping itself into a B2B play. According to that new plan, AllAdvantage would focus most of its energies on becoming a database management application service provider and a specialty ad rep firm to sell banner space in applications. A spokesman envisioned it working for marketing technology companies in the area — like Radiate, EverAd, and Conducent — but did not comment on whether it was in talks with any players.

AllAdvantage also flirted with charging for software distribution — a deal with outsourced technology vendor MyCIO.com began the firm distributing antivirus software to users, in return for a slight fee.

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