mValue Dead in the Water
The pay-to-surf company's demise deepens concerns about the model's viability.
The pay-to-surf company's demise deepens concerns about the model's viability.
Sponsored Web surfing company mValue this week confirmed rumors that it has ceased operations.
Similarly to competitors like AllAdvantage, ClickRebates’ ClickDough and others, Los Angeles-based mValue paid users cash or incentives in return for surfing the Web and viewing advertisements.
But the industry has been hit hard by questions about the value of online advertising, and investors’ reluctance to back online ad companies, especially following April’s correction.
Accordingly, companies like pay-for-surf firms — with high costs and revenues that waned as dot-coms struggled with marketing budgets — had to adjust their payment models and are struggling to find ways to secure a path to profitability.
MValue previously paid users 50 cents per hour, but then switched to a system of rewarding users with sweepstakes entries for a $1 million giveaway.
Hayward, Calif.,-based market leader AllAdvantage also revamped its model several times, first reducing the maximum amount paid and then offering sweepstakes entries as an alternative to cash. Last year, the company also came under heat from users for tardy payments. The company also filed for an IPO earlier this year, which it withdrew in June.
AllAdvantage also launched a number of ways to earn money aside from ad sales. Through a deal with outsourced technology vendor MyCIO.com, AllAdvantage distributes antivirus software to users in return for a slight fee. The company also hopes turn technology licensing into a revenue stream — the first deal of which will be an agreement to license technology to a new Japanese joint venture with investor Softbank.
Advertisers’ budgets are traditionally allocated in 4th quarter in time for the holidays. Despite efforts to distance themselves from advertising revenue as their sole source of income, if the pay-for-surf companies — now one fewer in number — don’t see an upturn then, they might be in for more stormy weather.
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