Year: 2008

Posted on

PPC Platform Competition and Google’s "May Not Copy" Restriction

By all indications, Google AdWords features far more advertisers than competing PPC platforms such as Yahoo Search Marketing and Microsoft adCenter. (Consider: Search for “thinkpad x60 power supply” at Google, and there are six relevant ads from vendors who actually sell that product. Search at Yahoo Search or Microsoft Live Search, and there are various ads from indexers and aggregators, but only one or two from vendors directly selling the product. Other searches for offbeat, unusual or region-specific keywords show similar patterns.)

Why do more advertisers choose Google? Because more users search at Google, Google can offer wider ad distribution than any single competitor. So if an advertiser had to choose just one ad platform, Google would be the natural choice.

But in principle advertisers can easily use multiple ad platforms. Ads are trivially small plaintext data, and In principle ads can be copied from platform to platform without restriction. So why don’t more Google advertisers use Yahoo, adCenter, and others too?

One possible answer comes from a little-noticed Google AdWords API Terms & Conditions restriction which substantially hinders advertisers’ efforts to use multiple providers — exactly prohibiting software vendors from helping advertisers copy AdWords campaigns to competing platforms. In this article, I identify the restriction at issue, analyze its effects on advertisers and competing ad platforms, critique response from Google, and compare this restriction with Google’s commitment to “data portability” in other contexts.

The Restriction at Issue

To use the Google AdWords API, a software developer must accept Google’s AdWords API Terms & Conditions. The T&C’s include the following requirement:

“Any information collected from an input field used to collect AdWords API Campaign Management Data may be used only to manage and report on AdWords accounts. Similarly, any information or data used as AdWords API Campaign Management Data must have been collected from an input field used only to collect AdWords API Campaign Management Data. For example, the AdWords API Client may not offer a functionality that copies data from a non-AdWords account into an AdWords account or from an AdWords account to a non-AdWords account.” (emphasis added)

Sure enough, searching the web for commercial tools to synchronize PPC campaigns or to export data from Google to competing platforms, I found none.

The “May Not … Cop[y] Data” Prohibition: Effect on Advertisers

The quoted restriction prevents advertisers from easily exporting ads from Google to a competing paid search provider. Consider: The essence of an export procedure is to copy data from an AdWords account to a non-AdWords account — exactly what the restriction prohibits.

Indeed, available export procedures are strikingly complex. For example, to import a Google AdWords campaign into Microsoft adCenter, Microsoft offers a 17-step procedure (with some steps made more complicated by the presence of multiple sub-steps).

Microsoft’s procedure is necessarily convoluted because Google’s “may not … cop[y]” restriction prevents Microsoft, or any other vendor, from writing a tool that connects to the Google API, downloads an advertiser’s ads, and uploads those ads directly to, e.g., Microsoft adCenter. Instead, advertisers must download data manually, reformat it to match adCenter’s requirements, and upload it to Microsoft — just as Microsoft’s lengthy procedure specifies.

For many advertisers, Google’s restrictions on data export impose an ongoing burden even beyond the advertiser’s initial signup with a competing PPC provider. Consider an advertiser that changes its ads or keywords often — perhaps selling seasonal merchandise, or experimenting with alternative advertising strategies. Such an advertiser would typically prefer to make changes in one place, and have the changes automatically propagate to all the advertiser’s PPC platforms. If Google remains the advertiser’s primary PPC provider, the advertiser would probably want to make changes in Google’s interface, then have other PPC platforms optionally automatically copy those changes. But Google’s “may not … cop[y]” restriction applies equally to ongoing resynchronizations. If an advertiser made daily changes to its Google campaigns, it would have to daily repeat the manual export/import process — a task that would be both time-consuming and prone to error.

In short, the net effect of the quoted restriction is to reinforce the tendency of small to medium-sized advertisers to “single-home” — to use only Google AdWords, to the exclusion of competing platforms.

At their peril do advertisers rely solely on Google: If advertisers get stuck using only Google, for lack of any easy and efficient way to buy some traffic elsewhere, Google can charge prices higher than competing platforms. Of course Google can’t raise prices infinitely; at some point, advertisers would overcome the lock-in, accept manual export, and copy ads to competitors. But Google’s “may not copy” restriction increases the costs of multi-homing — letting Google charge that much more than competitors, without advertisers facing compelling incentives to look elsewhere.

The “May Not … Cop[y] Data” Prohibition: Effect on Competing Ad Platforms, on Publishers, and on Users

By encouraging small to medium-sized advertisers to advertise only with Google AdWords, Google’s API restriction reduces the number of advertisers using competing ad platforms. This harms competing platforms in two distinct ways. First, it reduces competitors’ coverage — preventing competitors from featuring relevant ads that pertain to obscure user searches. (Consider the power supply example from the first paragraph of this piece — better and more useful ads at Google.) With fewer relevant ads, the competing platform offers users an inferior service — inviting users to look elsewhere, and reducing the likelihood of a paid click that would earn the platform an advertising fee.

Second, by reducing the number of advertisers bidding for advertising positions at other platforms, the quoted provision dramatically reduces revenue at those platforms. My December 2006 Optimal Auction Design in a Multi-unit Environment estimates the revenue benefits of additional advertisers based on publicly-available data and estimates of market fundamentals. The intuition is straightforward: When many advertisers seek positions for a given search term, they must bid higher to avoid being outbid and receiving inferior listing position. Conversely, when only a few advertisers seek positions, prices can be strikingly low since even a low bid earns a prominent position.

Google’s API restriction also reduces the value of advertising inventory held by third-party publishers. Consider a publisher seeking to sell its sponsored search or other text ad inventory to a provider of sponsored search services. In general, Google can afford to pay more because Google’s revenue per search is higher than competitors’. But how much will Google offer? Google maximizes profits by narrowly outbidding competitors; anything higher is waste. So the weaker competitors become, the lower Google can bid — and the less revenue publishers receive for the traffic they sell. Google’s “may not copy” API restriction serves a role in weakening competing platforms — keeping advertisers using Google alone, and hence reducing competing ad platforms’ ability to pay for publishers’ inventory.

End users also suffer from Google’s restriction on copying ads. Were it not for Google’s restriction, more advertisers would sign up to use competing ad platforms — increasing the usefulness of Yahoo Search and Microsoft Live Search for the users who choose those services.

Google’s Response

I forwarded these concerns to Google in March, and I managed to get in touch with Doug Raymond, product manager for AdWords API. Doug offered three rationales for the restriction. The list below summarizes his arguments (black) and my responses (blue).

  • Google: The quoted provision only applies to third-party developers. Individual advertisers remain free to write software that exports their Google campaigns.
    • Small to medium-sized advertisers don’t want to be developers. Rather, they want to use code that others write. That’s exactly why the AdWords API offers a concept of developers, rather than requiring that every advertiser write its own code.
    • As a leading provider of centralized computing services, as distinguished from small programs individual users build themselves, Google well knows the benefits of rigorous design by competent professionals.
  • Google: Advertisers can extract their data in other ways, e.g. a comma-separated-value (CSV) file.
    • Manual export is convoluted, slow, and error-prone. API-based access would be faster, easier, and more reliable.
    • The existence of an inferior alternative does not justify imposing restrictions that prohibit superior implementations.
    • In other contexts (detailed below), Google has made strong requests for, and commitments to, data portability.
    • In other contexts, Google emphasizes the benefits of streamlined, automated data transfer — never viewing convoluted manual procedures as an acceptable alternative.
  • Google: Third-party developers ought not have free access to advertiser data.
    • Google’s AdWords API already offers an appropriate security model to limit developers to serving those AdWords advertisers that have specifically granted such permission. In short, a developer needs a password to access an advertiser’s account.

Google’s Position on Data Portability in Other Contexts

Google’s prohibition on AdWords API data export stands in sharp contrast to Google’s position on data portability in other contexts. Indeed, Google has previously taken a firm position in favor of data portability. Some specific examples: In a November 2006 interview at the Web 2.0 Summit, Schmidt specifically promised that “We [Google] would never trap user data.” Schmidt added that “If users can switch it keeps us honest.” Just last month, Google CEO Eric Schmidt called for open access to (and indexing of) social network data — telling IBM’s Business Partner Leadership Conference “People should be able to move from place to place, and their data is available everywhere” and “open is best for the consumer.” Well-known Google blogger Matt Cutts summarized Google’s commitment to data openness with the catchy title “Not trapping users’ data = GOOD” and a long list of Google products that support data export.

I credit that Schmidt’s statements refer to other kinds of data — search engines’ records of users’ search history, and a wide assortment of data held by social networks. But the same principles plainly apply to access to search ads: Just as consumers benefit from being able to move their data as they see fit, so too do advertisers benefit from flexibility.

Moreover, it strains credibility for Google to ask social networks to share their data with Google, while Google simultaneously imposes contractual roadblocks preventing others from accessing Google data.

Next Steps and Google’s Other Restrictions

Google already faces antitrust scrutiny for its striking growth and market share. In that context, it’s particularly hard to defend the restriction at issue — a barrier to competition, without any apparent pro-competitive purpose. Regulators might reasonably require that Google remove the quoted provision — letting third-party developers export and synchronize AdWords data if advertisers so desire. This would be a trivially straightforward requirement — just a sentence to be stricken from Google’s AdWords API T&C’s. Because Google’s existing APIs already provide the required data, Google would not need to add any new code or any new API functions.

Other AdWords API restrictions also deserve scrutiny. For example, Google insists that advertising tools collect AdWords instructions through separate fields not used for other ad platforms — blocking simplification via a single interface to streamline advertisers’ decisions. Google prohibits advertising tools from storing Google data in a single relational database along with data for other ad platforms — increasing the complexity of designing a system to manage campaigns on multiple platforms. And Google prohibits reports that compare Google ad performance data (e.g. costs and profits from advertising at Google) with data from other ad platforms — hindering advertisers’ efforts to evaluate competitors’ offerings. I gather Google defends these restrictions on the grounds that they purportedly prevent advertiser confusion. Perhaps — but their more obvious effect is to increase the costs and complexity of using competing ad platforms. Perhaps I’ll consider these restrictions in greater detail in a future article.

Meanwhile, I’m struck by Google’s calls for data portability in other contexts. With Google’s ongoing request that other companies provide data to Google, perhaps Google will return the favor by abandoning its “may not copy” restriction — ideally promptly and unilaterally, without requiring that regulators force Google’s hand.

Posted on

Debunking Zango’s "Content Economy" updated May 29, 2008

Zango often touts its so-called “content economy” — purportedly providing users access to media in exchange for accepting Zango’s popup ads. After four years of debunking Zango’s claims, I’ve come to suspect the worst — and my investigations of Zango’s media offerings confirm that Zango’s media library is nothing to celebrate. This article reports the results of my recent examinations. I show:

  • Widespread copyrighted video content presented without any indication of license from the corresponding rights-holders. Details.
  • Widespread sexually-explicit material, including prominent explicit material nowhere labeled as such. Details.
  • An audio library consisting solely of prank phone calls to celebrities (without the “music” Zango promises). Details.
  • Widespread material users can get elsewhere for free, without any popups or other detriments. Details.
  • Widespread material that content creators never asked to have included in any Zango library. Details.

Widespread copyrighted video content presented without any indication of license from the corresponding rights-holders

Many of the videos in of Zango’s video library are the work of major movie studios, TV networks, and other third parties that own and assert copyright in their respective works. These videos consistently appear without any statement of authorization (e.g. “used with permission”) or even the ordinary copyright notice. I therefore conclude that Zango’s site features these videos without authorization from the corresponding rights-holders.

Zango Offers Daily Show with Guest Chris Rock Zango Offers Daily Show w/ Chris Rock

Zango Offers 'Borat' Zango Offers Borat

For many videos in Zango’s library, it is trivially easy to determine the video’s source. For example, text in the corner of Zango’s “Ashley Judd Nude Photoshoot” indicates the video comes from “Norma Jean & Marilyn” (1996, released on DVD by HBO Home Video). The title of Zango’s “Wild Things” suggests the video comes from the 2004 Sony Pictures movie by the same name; watching the video confirms the match. Zango’s “Girls Next Door Nude Compilation” begins with the distinctive Playboy logo. Zango’s “Chris Rock on the Daily Show” reproduces a video clip from Comedy Central’s Daily Show. It’s easy to find scores of other examples plainly labeled as well-known copyrighted works.

Other videos in Zango’s library are harder to identify — at least those without extensive entertainment industry experience. For example, I cannot easily determine the specific movie that included the scenes shown in Zango’s “Paris Hilton Striptease” or “Rachel Hunter in the Bathtub.” But the clips leave little doubt that they were filmed professionally and that the respective studios hold copyright in the resulting works. Similarly, I cannot easily determine the specific source of Zango’s “Branding Beat Down.” However, every frame of the video bears the distinctive Fox logo — indicating that the video originated with the Fox Broadcasting Company.

As to at least eight of the files in Zango’s library, I have specifically confirmed that Zango’s reproduction occurs without authorization from the underlying rights-holders. (Details below.) As to selected other files, I have sent inquiries to the corresponding rights-holders. I will update this page if I confirm whether Zango has properly licensed the content at issue.

Infringing videos are remarkably prominent in Zango’s video library. For example, as of May 27, Zango’s home page linked to “Borats First Trip To An American Gym” (s.i.c.). This clip was listed as the second most popular video in Zango’s entire content library, and it was placed in the top-center of Zango’s main www.zango.com web page, “above the fold” (within the portion of the page visible without using scroll bars). Yet the title of the video plainly indicates that the video contains the copyrighted work of others. Moreover, the video features the “DIVX Video” logo, indicating that DivX software was used to extract (“rip”) the video from a DVD. No authorized reproduction would be provided with a DivX overlay, so the presence of the DivX marker confirms that this video was reproduced without permission from the creators of Borat.

Other online video sites have been the target of major copyright litigation. For example, Viacom last year sued Google, alleging that “YouTube appropriates the value of creative content on a massive scale for YouTube’s benefit without payment or license.” In defense, Google points out that YouTube receives videos from independent — potentially granting Google immunity for these infringements due to the Digital Millennium Copyright Act‘s safe harbor for infringements occurring at the direction of users (17 USC 512(c)(1)).

Unlike YouTube, Zango’s video library offers no prominent “upload” function. Some of Zango’s videos arrive through the Revver video-sharing service (discussed below), probably originating with a variety of independent users. But many of the copyrighted videos Zango offers reside on Zango’s servers, not on Revver servers. (For example, all eight of the sexually-explicit videos linked in the first paragraph of the next section are hosted on Zango servers.) Because Zango offers no “upload” function by which ordinary users could have put videos onto Zango’s site, it therefore appears that these videos were provided by Zango or its agents, not by independent users. If so, Zango will not find protection in the DMCA’s safe harbor for infringements caused by users.

Moreover, even if Zango’s videos were provided by independent users, the circumstances of the reproduction seem to render Zango ineligible for the DMCA safe harbor. For one, the safe harbor requires that Zango lack actual knowledge of the infringements. But the infringing videos were obvious and self-evident, not just from their titles and contents, but also from their prevalence in featured results Zango chose to highlight. In addition, the safe harbor requires that Zango not receive a financial benefit directly attributable to the infringements. But Zango used these videos to induce users to download its popup-generating software, a financial benefit that is directly attributable to the infringing videos. (Consider the case of a user who installs Zango in response to solicitation offering a specific copyrighted video clip. Example.) Furthermore, Zango has the right and ability to control the infringement (e.g. by removing the infringing videos). Because Zango’s financial benefit can be directly tracked to a specific infringement, and because Zango has the right and ability to prevent such infringement, Zango seems to fail the test in 17 USC 512(c)(1)(B).

Zango may claim that its videos are fair use. The Copyright Act sets out a four-factor test for determining whether reproduction of a copyrighted work is permissible, despite lack of authorization from the rights-holder. The fair use test calls for considering 1) the purpose and character of the use (e.g. whether commercial or nonprofit), 2) the nature of the copyrighted work, 3) the amount and substantiality of the portion used, and 4) the effect of the use upon the potential market for the work. Factor one is easy: Zango’s use is clearly commercial, which tends to cut against a finding of fair use. Zango might claim that its presentation of excerpts (rather than entire movies) supports a finding of fair use under the third test — but Zango exactly chooses what it views as highlights (e.g. the explicit portions of full-length movies), yielding clips with a greater than usual effect on the potential market for the underlying works. In short, a fair use defense is at best uncertain.

Wide-scale copyright infringement could expose Zango to substantial liability. The Copyright Act provides for statutory damages of “not less than $750” per violation. My examination indicates Zango is reproducing (at least) hundreds of copyrighted videos without any statement of authorization. Furthermore, such videos have surely been downloaded repeatedly — giving rise to potential statutory damages that could easily reach seven digits or more.

Widespread sexually-explicit material, including prominent explicit material nowhere labeled as such

Celebrity Videos Featured by Zango Celebrity Videos Featured by Zango

Prominent Video - Explicit but Unlabeled
Prominent Video – Explicit but Unlabeled

Browse Zango’s video library, and it’s easy to find sexually-explicit video. As shown in the first inset image at right, the bottom-right corner of each Zango “Browse” page gives a list of celebrities — each of them female, each featured in various states of undress. Among other explicit videos of these celebrities, Zango offers “Britney Spears See Thru“, “Britney Spears Black Dress Upskirt“, “Paris Hilton Striptease“, “Rachel Hunter in the Bathtub“, “Jessica Alba’s Chest and You“, “Jessica Simpson Nipple Slip“, “Anna Kournikova Panties Oops“, and “Angelina Jolie Sex Scene.”

The titles and descriptions of many of Zango’s videos suggest that their subjects were unwilling participants. See e.g. “nipple slip” and “upskirt” above, as well as additional videos like Zango’s “Arab wife’s sexy dance secretly taped” and Zango’s “Girlfriend Finds Hidden Camera.”

Through its placement and labeling of sexually-explicit videos, Zango creates a substantial risk that users will receive explicit materials they did not seek. For example, on May 24, I clicked “Browse” to flip through Zango’s content library. Using Zango’s default sort, the third video was entitled “the pool” with comment “havin fun in the pool” (s.i.c.). (Screenshot of the link from within Zango’s video library.) This title and comment give no indication that the resulting material is explicit. But clicking the “Watch” button immediately yields a large video showing two male adults swimming nude, then exiting the pool (entirely disrobed). As best I can tell, Zango did nothing to alert users to this explicit material, nor does Zango prevent (or even discourage) children from viewing such material.

Zango’s May 24 “the pool” video was not a mere anomaly. The same video remained linked in the same way in my tests on May 25 and 26, and on portions of May 27.

In litigation documents, Zango last week claimed that it never distributes explicit material to those do not want it. In particular, Zango argues: “Zango never sends unwanted links to pornography web sites” and “Zango only directs adult-oriented advertisements to a user after that user, by his own behavior, has demonstrated interest in such content.” I disagree. The preceding paragraphs offer a counterexample — Zango prominently providing a link to sexually-explicit materials, and provideing that links to users who never demonstrated interest in any such content. Zango may claim that these links tout videos — not a “web site” as in the first quoted sentence. Alternatively, Zango may claim that the links are not “advertisements” — hence beyond a strict reading of the second quoted sentence. But the underlying contradiction remains: Zango says it doesn’t provide pornography except when users seek it; yet in fact Zango does sometimes deliver explicit materials unrequested.

That Zango funds and distributes sexually-explicit materials is well-known. See e.g. the Sunbelt Blog’s February 2008 conclusion that “80% of [Zango’s] business comes from Seekmo, the porn side of its business.” See also Sunbelt’s off-hand November 2006 remark that “hardcore porno videos [are] funded through Zango Seekmo installs.”

But the scope of explicit materials within Zango’s video library is quite striking. Consider the first page of Zango’s library listings for Angeline Jolie. Beyond the “sex scene” video linked above, the listings also include “Angelina Jolie Taking a Bath”, “Angelina Jolie Under the Sheets”, “Angelina Jolie in Bra & Panties”, “A fairly long nude scene staring Angelina Jolie” (s.i.c.), “Angeline Jolie Getting It On”, “Angelina Jolie Nip Slip”, “Angelina Jolie Hardcore”, and “Angelina Jolie Dominatrix”, and “Angelina Jolie Hot On The Runway.” That’s ten explicit results out of twenty links — suggesting that explicit materials are remarkably widespread on Zango’s site.

The initial version of this article also flagged Zango’s “Nice But” (s.i.c.), a video that on May 27 occupied the fourth-most prominent position in Zango’s “Browse” listings. The thumbnail image of this video appeared to feature a full-screen display of a man’s naked buttocks, filling the entire screen. In a follow-up, Zango points out that in fact, the video shows an extreme close-up zoom of of two hands. So this image and video are not actually explicit. Yet a viewer merely flipping through Zango’s listings would nonetheless see an image that is, by all indications, explicit. The title “but” (s.i.c.) and the keyword “naked,” both adjacent to the thumbnail, reinforce the user’s perception of having seen an unrequested explicit image. Although the image is not actually explicit, the image’s content, placement, and labeling make it likely to leave users with the same feeling as an unrequested image that is actually sexually explicit: In both instances, a viewer who merely sees the image and does not watch the video will think he has seen an unwanted explicit image. In my view, Zango errs in mocking this harm. To the users who Zango tricks, the harm is perfectly real.

Zango’s audio library consists solely of prank phone calls to celebrities

Zango Offers Prank Phone Call Recordings Zango Offers Prank Phone Call Recordings

Zango’s content library offers three types of media: Videos, screensavers, and audio. Despite Zango’s much-touted “content economy,” Zango offers just eight audio clips. And although Zango’s “About Zango” description promises to provide free access to “music,” in fact all eight of these audio files are recordings from talk radio — just voices, with no music at all.

All eight of Zango’s audio recordings share a common theme: Prank phone calls to celebrities. In each, a caller pretends to be someone famous (e.g. the Prime Minister of Canada), and calls a celebrity (e.g. Bill Gates) under the guise of a bona fide discussion. The caller proceeds to berate the celebrity (e.g. by criticizing the features and reliability of Windows).

A comment in several of the videos reveals the source of the recordings: The Masked Avengers, which Wikipedia describes as “a Canadian radio duo … of disk jockeys and comedians Sebastien Trudel and Marc-Antoine Audette, known for making prank calls to famous persons by pretending to be government officials or officers in charitable organizations.” I wrote to Mr. Trudel, who confirmed to me that he has not granted Zango any license to use or reproduce these clips.

After placing these recordings in its content library, Zango further syndicates the materials onto Zango’s partner sites. For example, celebsprankd.com (screenshot) features all eight recordings, but requires users to install Zango before listening. Whois reports that Celebsprankd comes from the Vancouver, B.C. advertising firm Neverblue Media — a conclusion confirmed by the presence of the Neverblue.com web server at the same IP address. Neverblue describes itself as a “leading … online marketing company” offering “premier” advertising and “solid business leads” — claims arguably inconsistent with distributing and profiting from prank phone calls, not to mention distributing Zango. (But these recordings aren’t Neverblue’s only tie to Zango. This month alone, my Automatic Spyware Tester found eleven incidents of Neverblue affiliates buying popup traffic from Zango. I’ve also found dozens more incidents as to Neverblue affiliates buying traffic from other spyware.)

What of Zango’s distribution of these prank call recordings? With so few clips yet such prominent placement (including five of these eight audio recordings featured on Zango’s home page), senior Zango staff surely know what the files contain. Does Zango support prank phone calls? Wasting celebrities’ time under false pretenses? Recording phone calls without permission, even in states that specifically require such permission? It’s hard to reconcile these practices with Zango’s supposed reforms.

Widespread material users can get elsewhere for free, without any popups or other detriments

Much of Zango’s content is available elsewhere without charge and without installing any software that tracks online behavior or shows popup ads. For example, clicking Zango’s “Browse” tab and retaining defaults, every single video on the first page of results is syndicated from Revver. Users could just as easily get these videos directly from Revver, as receive them from Zango. But if users watched these videos at Revver, Zango’s software would not track their web browsing and searching, and users would not receive Zango’s popup ads.

Zango Falsely Claims that Uninstallation Eliminates Content Access Zango Falsely Tells Its Users:
“Uninstallation … eliminates content access”

Furthermore, Zango makes untrue claims about the necessity of its software. For example, Zango claims that “uninstallation … eliminates content access.” It does not. For files hosted at Revver, installation of Zango is not necessary to watch the videos in the first place, and uninstallation does not interfere with watching the videos later. Moreover, even many Zango-hosted files can be accessed without installing Zango, or after uninstalling Zango. For example, Zango’s “Chris Rock on the Daily Show” is actually just a standard Windows Media Video (WMV) distributed from the following URL: preview.licenseacquisition.org/123/1054944882.36393/yikers_chris_rock_on_the_daily_show.wmv . Zango’s “Borats First Trip To An American Gym” (s.i.c.) is preview.licenseacquisition.org/123/1054944854.02531/yikers_borats_first_trip_to_an_american_gym.wmv . Similarly, Zango’s “Bill Gates Gets Pranked” is a WMA hosted at preview.licenseacquisition.org/13/12295/12295.wma . Any user who knows these URLs can easily receive the corresponding files — without ever installing Zango, or after uninstalling Zango. Zango ought not claim otherwise.

Presenting material that content creators never asked to have included in any Zango library

By syndicating videos from Revver, Zango causes its video library to feature materials that content creators never asked to have associated with Zango in any way.

Zango’s syndication of Revver videos has prompted numerous complaints content creators who post videos to Revver. For example, Chris Pirillo asked why his videos are appearing on Zango. (“I don’t remember giving Zango permission to push crapware on my behalf.”) Revver forum user JPPI pointed out the irony of Zango claiming his videos were “FREE, thanks to Zango” when in fact the videos were free all along (even before Zango syndicated them). Revver forum user David complained that it is “kinda deceptive” (s.i.c.) “to make it sound like Zango was the one who made the video free.”

In response, Revver Vice President Asi Behar agreed to ask Zango to remove any Revver videos that Revver authors specifically so designate. But such removals do nothing to cure the deception of Zango requiring that users install its software before watching materials widely available elsewhere for free. Furthermore, such removals do nothing to protect Revver content creators who are unaware of Revver’s relationship with Zango. The word “Zango” appears nowhere on Revver’s official web site (as distinguished from Revver’s forums and some Revver-hosted videos). Thus, a Revver content creator has no easy way to learn about Revver’s relationship with Zango — not to mention learn of the option to request exclusion from Zango.

Zango’s syndication of Revver videos risks tainting the good name of Revver content creators. Consider a user who searches for a Revver video and finds that video hosted at Zango (just as Chris Pirillo did last year). The user may mistakenly conclude that installing Zango is in fact necessary to watch the video. If so, the user is likely to end up with a negative view of the underlying content creator — mistakenly concluding that, e.g., Chris Pirillo has partnered with Zango or endorses Zango’s activities. Revver forum complaints indicate that numerous Revver users share this concern. Yet Revver continues to syndicate videos to Zango without first checking with content creators.

Zango’s problems in context

Last week, Zango was one of four finalists for the Software & Information Industry Association’s CODiE Best Video Content Aggregation Service. In my view, that award is misguided: Far from deserving praise, Zango should be criticized and shunned for reproducing others’ copyrighted work without any apparent license to do so, showing sexually-explicit material unrequested, and offering users a lousy value by bundling extra ads with content users could get elsewhere for free.

Meanwhile, Zango continues litigation with Kaspersky. Recall: Kaspersky blocked Zango’s software from installing; Zango sued; Kaspersky successfully defended on the grounds that the Communications Decency Act, 47 USC 230, immunizes Kaspersky’s behavior because Kaspersky is an “interactive computer service provider” blocking material that, in its subjective opinion, is “objectionable.” In Zango’s appeal, Zango claims its software is not “otherwise objectionable” (brief pages 12-15; PDF pages 17-20). If it’s not objectionable to show explicit material unrequested — not to mention to infringe copyrights on a massive scale, and to insert extra ads around material available elsewhere without such ads – then I don’t know what is.

Finally, I’m often asked whether Zango continues the behaviors I previously reported. Installing through sneaky fake-user-interface pop-up ads that mimic the appearance of official Windows dialog boxes (as I reported last summer)? Yes. I made a fresh video showing such installations just last week.Defrauding advertisers through popups that cover merchants’ sites with their own affiliate offers(as I reported last spring, in September 2005, in summer 2004, and otherwise)? Definitely. This month alone, I reported six Zango incidents to just one of my advertiser clients — not to mention scores of other incidents targeting other web sites and advertisers. Zango repeatedly claims its problems are all in the past, but my hands-on testing continues to indicate otherwise.

Posted on

Microsoft adCenter (teaching materials) with Peter Coles

Coles, Peter, and Benjamin Edelman. “Microsoft adCenter.” Harvard Business School Case 908-049, January 2008. (Revised February 2010.) (educator access at HBP. request a courtesy copy.)

Microsoft considers alternatives to expand its presence in online advertising, especially text-based pay-per-click advertising. Google dominates, and it is unclear how Microsoft can grow, despite considerable technical and financial resources. Microsoft considers a set of alternatives, each with clear benefits but also serious challenges.

Teaching Materials:

Microsoft adCenter (Teaching Note) – HBP 908062

Posted on

TheLadders (teaching materials) with Peter Coles, Brian Hall, and Nicole Bennett

Coles, Peter A., Benjamin Edelman, Brian J. Hall, and Nicole Bennett. “TheLadders (A).” Harvard Business School Case 908-061, April 2008. (Revised March 2015.) (educator access at HBP. request a courtesy copy.)

Despite strong appeal among job seekers and outside recruiters, TheLadders’ corporate job listings seem to lag. Could raising prices help solve the problem? TheLadders considers this strategic paradox.

Supplments:

The Ladder (B) – Supplement (HBP 914017)

The Ladder (C) – Supplement (HBP 916017)

Teaching Materials:

The Ladder – Teaching Note (HBP 909005)

Posted on

Opening Dot EU (teaching materials)

Edelman, Benjamin. “Opening Dot EU (A).” Harvard Business School Case 908-052, March 2008. (Revised April 2008.) (educator access at HBP. request a courtesy copy.)

EURid considers possible market mechanisms to allocate initial domain names within the Internet’s newly-created “dot EU.” European Union regulations and community norms substantially constrain EURid’s approach, preventing the use of the most natural economic mechanisms (such as auctions).

Supplement:

Opening Dot EU (B)- Supplement (HBP 908053)

Posted on

Coupons.com and TRUSTe: Lots of Talk, Too Little Action updated March 20, 2008

Six and a half months ago, I reported a variety of bad practices at Coupons.com. Key among my concerns: Coupons.com stored data in deceptive filenames and registry entries designed to look like part of Windows — with names like c:\WINDOWS\WindowsShellOld.Manifest.1 and HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Windows\CurrentVersion\Controls Folder\Presentation Style. Furthermore, Coupons.com failed to remove these files upon a user’s specific request to uninstall.

Because Coupons.com was certified by TRUSTe Trusted Download, I reported these behaviors through TRUSTe’s Watchdog form. TRUSTe investigated and, it claimed, required Coupons.com to make changes. Last month, TRUSTe declared success: “Coupons, Inc. rolled out a number of significant changes …. To improve registry key and naming (s.i.c.), the new version of the software uses an improved security scheme that writes only one registry key placed in a typical location, named in an appropriate manner.” TRUSTe concluded by giving itself a pat on the back — calling this sequence “an excellent outcome” in that “[a] user found a problem, filed a complaint, and TRUSTe worked with the Participant to make necessary corrections.”

I wanted to see for myself whether TRUSTe’s oversight is as effective as TRUSTe claims. So I downloaded Coupons.com’s current software onto an ordinary computer in my lab. (I couldn’t use a VMware virtual machine because Coupons.com detects VMware and refuses to install.) To my dismay, Coupons.com’s software continued to create the same deceptively-named files and registry keys I reported in August:

c:\WINDOWS\uccspecc.sys
c:\WINDOWS\WindowsShellOld.Manifest.1
HKEY_CLASSES_ROOTManifest.Template.1shellex
HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Windows\CurrentVersion\uccspecc
HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Windows\CurrentVersion\Controls Folder\Presentation Style
HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Windows\CurrentVersion\Explorer\EnableAutoTrayHistory
HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Windows\CurrentVersion\Internet Settings\UrlDecoding

I prepared a screen-capture video to confirm and memorialize the deceptively-named files and registry keys. (My video begins by showing the New York Times front page, to demonstrate the date of testing.)

I then used Control Panel – Add/Remove Programs to attempt to uninstall Coupons.com’s software. I found that the specified files and registry keys all remained in place — even though TRUSTe further promised that “[t]he new version uninstaller removes the files.”

What’s going on? Maybe TRUSTe tested a different version of Coupons.com’s software than the version offered to the public. Maybe Coupons.com posted the wrong file. But whatever the reason, TRUSTe’s claims are inconsistent with my test results.

TRUSTe’s Oversight and What to Do Next

My testing indicates that Coupons.com has not made the changes TRUSTe specified. In particular, Coupons.com continues to use multiple registry keys and filenames with intentionally deceptive locations and names — exactly contrary to TRUSTe’s claim that “only one registry key” is used and that it is placed in a “typical location” with an “appropriate” name. Furthermore, Coupons.com leaves these files and registry keys after uninstall — exactly contrary to TRUSTe’s claim that the new uninstaller “removes the files left behind.”

Far from TRUSTe’s self-congratulatory rhetoric, Coupons.com’s practices reflect badly on TRUSTe: Despite clear violations widely reported 6+ months ago and a supposed investigation by TRUSTe, the problems continue to this day.

Worse, through two different channels, TRUSTe has falsely told users they can trust Coupons.com. First, Coupons.com has continuously remained on TRUSTe’s Trusted Download “whitelist” despite my initial report. That is, TRUSTe continued to certify Coupons.com even when TRUSTe knew of Coupons.com’s deceptive practices and even when there was no dispute that the practices were ongoing. A better strategy, per my September 2007 recommendation, would be to suspend violators until they have fully corrected their practices. Otherwise, a user looking at the “whitelist” cannot know which companies are truly in good standing, versus which have fallen short and are must make improvements.

Second, TRUSTe has posted announcements (1, 2) that falsely characterize the status of Coupons.com’s improvements: In September TRUSTe promised the changes would be “completed within 90 days” — but in fact, they’re still not in place 180 days later. In February TRUSTe proclaimed the changes complete — but in fact Coupons.com’s software still has the same problems I previously identified.

These failings go to the core of TRUSTe’s promise to “make privacy your choice.” TRUSTe claims to be giving users the information they need to make informed decisions. However, TRUSTe’s information is systematically in error — to the benefit of the companies that pay TRUSTe to get certified, but to the detriment of any users who mistakenly rely on TRUSTe’s investigations.

An Additional Violation: Executable Software Left Behind After Uninstall

My recent tests also revealed a new file I hadn’t noticed in prior tests: c:\WINDOWS\system32\cpnprt2.cid. How did I miss this file? It appears only after a user first prints a coupon — not when a user initially installs Coupons.com software. So this file wasn’t created in my prior testing.

Despite the file’s unusual .CID extension, the file is actually a DLL containing executable code. Although “cpnprt” bears some relationship to Coupons.com’s product name (“CouPoN PRinTer”), I can see no proper reason to place this file within c:\WINDOWS\ rather than in c:Program Files\Coupons with Coupons.com’s other files. So Coupons.com’s improper file locations include not only data files (like those listed above), but also executable code.

Moreover, I see no proper reason for calling the file a .CID rather than the DLL that it is. This misnaming serves to further obfuscate the file’s purpose and to prevent typical users from determining that the file contains executable software code.

In separate testing, I confirmed that this file remains on a user’s computer even after the user removes Coupons.com’s software. (This too is shown in my screen-capture video.) So Coupons.com leaves behind not just data, but also executable software. Leaving executable code stands starkly in contrast to Coupons.com’s license agreement which mentions only that “license keys wil not be removed when the Software is uninstalled” — but says nothing about software code left behind.

Coupons.com violates TRUSTe Trusted Download requirements when it leaves executable code after a user’s uninstall request. Trusted Download rule 7.(a)(ii) requires a complete uninstall and allows only limited exceptions — none of them applicable here. (The closest exception allows “properly disclosed anti-fraud … measures” — but this practice is not “properly disclosed,” nor is surviving executable code required to track whatever practices might conceivably be at issue.) Coupons.com’s cpnprt2.cid file therefore constitues another violation of applicable Trusted Download rules.

Coupons.com’s Ongoing DMCA Litigation with John Stottlemire

Last summer I mentioned Coupons.com’s misguided DMCA litigation against John Stottlemire. The case drags on: John’s blog reports ongoing events, including John’s motion to dismiss, the court’s granting of that motion, Coupons.com’s second amended complaint, and John’s second motion to dismiss.

My view remains that this litigation is ill-advised for Coupons.com: Coupons.com has too much work to do, improving its own software and its own business practices, to waste management time and attention on pursuing a user who merely helped others remove deceptively-named files and registry keys. Coupons.com has nothing to gain here: Even if Coupons.com can force John to stop telling users how to remove unwanted Coupons.com software, others will immediately pick up where John left off.

There’s plenty more to be said about the case — especially, concern at using the DMCA to stifle useful public-interest discussion of how to remove unwanted software from an ailing computer. But I’ll leave that to others: TechDirt, Wired, and various bloggers.

Update (March 20, 2008)

TRUSTe’s Response and My Hands-On Testing

In a March 19 posting, TRUSTe claims that the issues described above reflected Coupons.com software available only between March 15 and March 17. But TRUSTe stands behind its February report that Coupons.com had “addressed [the] concerns” TRUSTe previously raised based on my prior article. I emphatically disagree. In particular, my hands-on testing, memorialized in video records, clearly demonstrates that Coupons.com continues to violate TRUSTe’s prior instructions and applicable TRUSTe rules. Consider my March 19 video:

1. At 0:02, I demonstrate the current date and time. I then run an InCtrl scan to record existing files and registry keys.

2. At 1:15, I begin to browse the Coupons.com site, and at 1:25 I attempt to print a coupon. 

3. At 1:33, I begin to install the Coupon Printer program, including providing a name and email address when requested (2:20). 

4. At 2:55, I browse c:\WINDOWS\ to show the newly-created and deceptively-named CID file (as discussed above).  I then proceed to find a file by the same name placed in c:\WINDOWS\system32 also.

5. At 3:30, I rerun Inctrl to identify newly created files and registry keys.  The results are visible beginning at 5:35.  I notice the HKEY_CLASSES_ROOT\English.cpl registry key in the listing (5:45), and at 5:50 I use Regedit to confirm that the key is indeed present. 

6. At 6:30, I request an uninstall in the usual way (Control Panel – Add or Remove Programs).  I then show that deceptively named file remains in c:\WINDOWS\ (7:14) and c:\WINDOWS\system32 (7:08); despite my uninstall request, these files were not removed.  I show that the deceptively-named registry key remains also (7:02). 

The Violations Revealed by My Hands-On Testing

The preceding video presents three separate different violations of TRUSTe rules and of TRUSTe’s prior representations of Coupons.com’s supposed compliance:

A) Step 4 shows a deceptively-named file placed on a user’s computer. There is no proper reason to call this file a .CID rather than the DLL that it is. Nor is there any proper reason for Coupons.com to place the same file in both c:\WINDOWS\ and c:\WINDOWS\system32. Indeed, my tests indicate that Coupons.com sometimes uses one of those folders, sometimes the other, and sometimes both — a randomization procedure with no proper purpose, but with the natural effect of confusing users and hindering detection and removal.

These deceptive filenames are exactly contrary to TRUSTe’s claim that it has resolved the problem of Coupons.com’s “inappropriately-named files.” These deceptive filenames and randomized locations also violate TRUSTe rule 14(e)(v), which prohibits “using randomized or intentionally deceptive file names … for the purpose of avoiding detection and removal.”

B) Step 5 shows a deceptively-named registry key. Coupons is not, and is not commonly known as, “English.cpl.” Indeed, the file extension “CPL” indicates a Control Panel applet or extension — but Coupons.com offers no such extension. Neither does Coupons.com have any proper basis to place its configuration data in HKCR — a registry area reserved for file extensions and COM class registrations. Rather, Coupons.com clearly chooses this area to store its configuration data because users would never think to look here. Indeed, in repeated testing, I found that Coupons.com sometimes used other keys instead. For example, in a separate video early on March 19, I found that Coupons.com used HKCRWeb.Template.URL rather than HKCREnglish.cpl. Randomization of registry keys further confirms that Coupons.com uses these registry locations to avoid detection.

These randomized and intentionally-deceptive registry keys are exactly contrary to TRUSTe’s claim that all registry keys are “placed in a typical location [and] named in an appropriate manner.” These deceptive filenames and randomized locations also violate TRUSTe rule 14(e)(v), which prohibits “using randomized or intentionally deceptive … registry entries for the purpose of avoiding detection and removal.”

C) Step 6 shows that Coupons.com fails to remove all its files and registry keys upon a user’s specific request to uninstall.

The retention of these files is exactly contrary to TRUSTe’s claim that the “new version uninstaller removes the files left behind.” The retention of these files also violates TRUSTe rule 7.(a)(ii), requiring a complete uninstall and allows only limited exceptions — none of them applicable here.

The retention of these files also violates Coupons.com’s license agreement — which mentions only that “license keys will not be removed when the Software is uninstalled,” but says nothing about software code left behind. Although TRUSTe’s Trusted Download rules do not specifically require that a company comply with the provisions of its license agreement, I take such compliance to be so obvious that it does not require a specific mention. Coupons.com’s violation of representations in its own license agreement therefore constitutes yet another violation of TRUSTe requirements.

Additional Violations: Coupons.com Retrieving Windows CD key and system serial numbers

In testing using API and registry-monitoring tools, I have determined that Coupons.com retrieves a wide variety of sensitive Windows registry keys and computer configuration settings including Windows Product ID, Windows CD key, motherboard serial number, and hard drive serial number. These numbers serve to identify a specific individual computer, and these numbers persist over the lifetime of a computer. Coupons.com. These practices stand in sharp contrast to Coupons.com’s representations to users:

  • The Coupons.com “promo” promises that “The Coupon Printer does not gather or ask for any personal information about … your computer.” Yet my testing indicates that Coupons.com gathers detailed computer-specific information about each computer on which it is installed.
  • Coupons.com’s privacy policy similarly promises that “The Coupons, Inc. software … only collect[s] information about what coupons have been printed and redeemed from your computer” — again, directly at odds with my observation that Coupons.com collects far more information.
  • Coupons.com’s license agreement discloses this information collection only by admitting that the “software uses anonymous, assigned numbers and/or anonymous information about your computer or device.” But the numbers at issue are not anonymous: These numbers identify a specific individual user based on the user’s unique and unvarying Windows CD key, motherboard serial number, and hard drive serial number. TRUSTe rule 1.qq defines such information to be pseudonymous (“information that may correspond to a person [such as] machine ID”), while rule 1.i defines anonymous information to exclude all pseudonymous information. Coupons.com thus errs in characterizing these numbers as “anonymous.” Moreover, Coupons.com errs in disclosing this data collection practice only in its license agreement; because this practice speaks to user privacy, it belongs in Coupons.com’s privacy policy.

TRUSTe’s Ineffective Investigation and Response

TRUSTe staff could have identified each of these defects when they tested Coupons.com software in February. Instead, TRUSTe staff issued a boilerplate endorsement — failing to identify shortcomings that would have been apparent in any careful analysis.

Remarkably, even after my post above and even after John Stottlemire’s March 18 post detailing many of these issues in great detail, TRUSTe nonetheless described Coupons.com’s problems as “corrected.” TRUSTe even called this process “a good example of how the [Trusted Download] program should work.” I emphatically disagree: Coupons.com remains flagrantly in violation of TRUSTe’s instructions and rules, and TRUSTe has failed either to obtain suitable corrections or to eject Coupons.com from its whitelist.

To this day, Coupons.com is in breach of TRUSTe’s rules, and TRUSTe knows it. Yet Coupons.com remains listed on TRUSTe’s whitelist as if its practices are beyond reproach and as if the company is in good standing vis-a-vis TRUSTe’s rules. That’s outrageous, and users should demand better.

Posted on

Delaying Payment to Deter Online Advertising Fraud

In a new article, I introduce an alternative method of fraud prevention for certain online advertising systems. By delaying payments, a merchant or network differentially harms bad affiliates (who rightly worry they may get caught) without unduly harming good affiliates (who know they’ll get paid, and who receive a bonus in compensation for the delay). With a suitable delay, a merchant or network can deter many bad affiliates while retaining the good.

My working draft:

Optimal Deterrence when Judgment-Proof Agents are Paid in Arrears – with an Application to Online Advertising Fraud

Details on my approach, including initial data on merchants’ and networks’ current payment terms.

(update: published as Edelman, Benjamin. “Deterring Online Advertising Fraud Through Optimal Payment in Arrears.” Financial Cryptography and Data Security: Proceedings of the International Conference (September 2009). (Springer-Verlag Lecture Notes in Computer Science.))

Posted on

Critiquing C-NetMedia’s Anti-Spyware Offerings and Advertising Practices

Not every “anti-spyware” program is what it claims to be. Some truly have users’ interests at heart — identifying and removing bona fide risks to privacy, security, stability, or performance. Others resort to a variety of tricks to confuse users about what they’re getting and why they purportedly need it.

This article reports the results of my examination of anti-spyware software from C-NetMedia. I show:

  • Deceptive advertising, deceptive product names, and deceptive web site designs falsely suggest affiliation with security industry leaders. Details.
  • The use of many disjoint product names prevents consumers from easily learning more about C-Net, its reputation, and its practices. Details.
  • High-pressure sales tactics, including false positives, overstate the urgency of paying for an upgraded version. Details.

Note that C-NetMedia is unrelated to the well-known technology news site CNET Networks. Details.

Deceptive advertising, deceptive product names, and deceptive web site design falsely suggest affiliation with security industry leaders.

Some C-NetMedia products are marketed using practices, keywords, labels, and layouts that falsely suggest they come from security industry leaders. This suggestion comes from both the actions of C-Net itself, as well as from the actions of C-Net’s marketing partners.

Google Shows Deceptive Ads for C-Net's Products
Google Shows Deceptive Ads for C-NetMedia’s Products

Consider the top three ads for a Google search for “Spybot”, a popular early anti-spyware program (full name “Spybot Search & Destroy”). As shown at right, the top three ads each specifically mention “Spybot” — the first two, in directory names; the third, in its domain name. Furthermore, all three ads also include the distinctive and original phrase “Search & Destroy” that specifically describes the genuine Spybot product. Yet in fact each of these three ads takes users to the unrelated site spywarebot.com (emphasis added) (screenshots: 1, 2, 3). Clicking the first ad immediately takes a user to spywarebot.com via the ClickBank advertising network. As to the second and third ads, traffic flows through independent “landing page” sites which in turn show ClickBank links to promote Spywarebot. These landing pages are hosted on the deceptively-named domains named spybot-sd-info.com and www-spybotcom.com — each further (but falsely) suggesting an affiliation with the genuine “spybot” product.

C-NetMedia partners similarly fill top ad spots for a search for “Ad-Aware”, another well-known anti-spyware program. The top ad promotes C-Net’s adwarealert.com — a name particularly likely to confuse users because the ad’s title and domain differ from the user’s request by just a single letter. The first ad takes the user to adwarealert immediately, while the second ad takes users to a www-ad-ware.com landing page which also promotes adwarealert.com (again via ClickBank).

Other deceptive C-NetMedia partners pervade search results for spyware-removal search terms. See e.g. “Spybot-free.com” using distinctive “Spybot” “Search & Destroy” marks to promote C-Net’s spywarebot.com. See also C-Net’s Registrysmart.com advertising with ad title “Microsoft Antispyware” in Google results for searches on “Microsoft Spyware”. Because the Registrysmart ad title touts “Microsoft Antispyware”, users might reasonably think the ad will yield an official Microsoft site that actually provides the free “Microsoft Antispyware” product. But in fact the link leads only to a C-Net site with paid products.

C-NetMedia may claim that these ads were placed by affiliates. But the actions of these affiliates are prominent — occurring on search terms as well-known as “Spybot” and “Ad-Aware.” These actions are also longstanding: My October 2006 False and Deceptive Pay-Per-Click Ads shows that some of these ads have continued for more than a year. Furthermore, these affiliates act for C-Net’s benefit, and C-Net has the right and ability to monitor them, to oversee their activities, and to limit their efforts as it sees fit. Finally, FTC litigation confirms that companies can be liable for the actions of their affiliates and marketing partners. See e.g. US v. APC Entertainment (advertiser liable for sexually-explicit unsolicited commercial email sent by its affiliates), In the Matter of Zango, Inc. (advertising software company liable for nonconsensual and deceptive installations of its software by its partners), In the Matter of Direct Revenue LLC (same).

C-NetMedia’s involvement in these advertising practices is heightened by C-Net’s own selection of product names. C-Net, not its affiliates, chose product names so close to established market leaders — names that invite consumer confusion. C-Net furthers the confusion by calling its products “official” (e.g. “The Official Ad-Ware Client“, emphasis added) when there is no meaningful sense in which C-Net’s products are more “official” than any other. Indeed, when users arrive at C-Net sites after requesting similarly-named better-known competitors, C-Net’s offerings are exactly not the official products users specifically requested by name.

Some C-Net sites are also deceptive in that their titles and graphic design falsely suggest they are an official part of Windows. Consider antispyware.com. The site’s heading presents the generic title “AntiSpyware For Windows” — without mentioning any company name or showing any other prominent indication that the product is not actually part of Windows. Furthermore, antispyware.com shares numerous graphic design elements with official Microsoft sites: Like official Microsoft sites, antispyware.com features a broad blue bar across the top of the page, bold white type at top-left with smaller white type at top-right, a grey navigation bar down the left edge (with thin black lines as section separators, and with simple black text), a grey nav bar down the right edge (with broad grey bars to separate sections, and with blue bulleted text), a grey background, a skewed 3D rendering of a product screen at page center, and a vivid colored bubble at top-center, linking to a product download. See the two screenshots below — antispyware.com on the left, and the official Microsoft Windows Defender download page on the right. These many visual similarities make it especially likely that a user at antispyware.com will mistakenly believe the site is an official Microsoft offering.

 
C-NetMedia’s Antispyware.com
  
Microsoft Windows Defender

Some C-NetMedia sites give users the false impression that they are bona fide informational sites rather than commercial advertisements. For example, Remover.org presents itself as a general-purpose spyware information site, but Remover.org actually promotes only one product — C-Net’s “AntiSpyware For Windows.” Furthermore, Remover.org claims to have “one goal and one purpose: to win the war on spyware” — suggesting a non-commercial purpose, when in fact Remover charges a fee for its removal program. The totality of these practices suggests that a user at Remover.org may reasonably think he is viewing an ordinary informational site and/or a source of unbiased reviews, when in fact the site is a C-Net advertisement.

Hindering Consumer Investigations through Use of Numerous Product Names and Domains

C-Net uses exceptionally many product names and domain names. My analysis indicates that the following products and domains all come from C-NetMedia:

Site Whois IP Address Trademark
adware.pro Whois-Proxy 72.32.100.197  
ad-warealert.com Domains By Proxy (GoDaddy) 72.32.242.170 – C-Netmedia 77047467 – November 20, 2006 – C-Netmedia
adwarealert.com Domains By Proxy (GoDaddy) 72.32.29.230 77047467 – November 20, 2006 – C-Netmedia
adwarearrest.com Syber Corporation
8400 East Prencitce Avenue, Ste 1500  
Greenwood Village CO 80111		 72.32.134.197  
adwarebot.com Domains By Proxy (GoDaddy) 72.32.242.171 – C-Netmedia  
antispyware.com Domains By Proxy (GoDaddy) 72.32.26.195 77073855 – December 30, 2006 – C-Netmedia
antispywarebot.com    Domains By Proxy (GoDaddy) 72.32.48.186 77047469 – November 20, 2006 – C-Netmedia
errorkiller.com C&C Networks
3630 County Ct S
Mobile, AL 36619  		 72.32.242.171 – C-Netmedia    77047443 – November 20, 2006 – C-Netmedia   
errorsmart.com Domains By Proxy (GoDaddy) 73.32.26.195  
errorsweeper.com Domains By Proxy (GoDaddy) 73.32.48.186 77047440 – November 19, 2006 – C-Netmedia
evidenceeraser.com  Domains By Proxy (GoDaddy) 73.32.29.230 77073969 – December 31, 2006 – C-Netmedia
free-pc-repair.com Ofer Shoshani
747 Durshire Way
Sunnyvale, CA 94087		 72.32.100.197  
free-registrysmart.com    Domains By Proxy (GoDaddy) 72.32.242.171 – C-Netmedia 77047441 – November 20, 2006 – C-Netmedia
macrovirus.com Domains By Proxy (GoDaddy) 72.32.242.171 – C-Netmedia  
malwarebot.com Domains By Proxy (GoDaddy) 72.32.242.169 – C-Netmedia 77047470 – November 20, 2006 – C-Netmedia
privacycontrol.com Domains By Proxy (GoDaddy) 73.32.48.186 77073857 – December 31, 2006 – C-Netmedia
privacycontrols.com Domains By Proxy (GoDaddy) 73.32.48.186 77073859 – December 31, 2006 – C-Netmedia
regclean.com Domains By Proxy (GoDaddy) 73.32.48.186  
regrecall.com Domains By Proxy (GoDaddy) 73.32.90.213  
registrybot.com Domains By Proxy (GoDaddy) 72.32.242.169 – C-Netmedia 77047445 – November 20, 2006 – C-Netmedia
registryclear.com Bruce Cope
3630 County Ct S
Mobile, AL 36619		 72.32.134.197  
registrysmart.com PrivacyPost (Dotster) 73.32.29.230 77047441 – November 20, 2006 – C-Netmedia
regsweep.com Domains By Proxy (GoDaddy) 73.32.26.195 77047438 – November 19, 2006 – C-Netmedia
remover.org Domains By Proxy (GoDaddy) 72.32.26.195  
restore-pc.com Domains By Proxy (GoDaddy) 73.32.29.230  
spywarebot.com Domains By Proxy (GoDaddy) 73.32.134.197  
spywareremover.com C&C Networks
3630 County Ct S
Mobile, AL 36619		 64.49.219.215  

The United States Patent and Trademark Office’s Trademark Search provides the brunt of my evidence that the listed sites are associated with C-Netmedia. Other evidence comes from the 73.32.242.168-175 network block that C-Net uses at Rackspace. (Rackspace also hosts all of the other listed C-Net sites. The 64.49.219.215 server is indeed a Rackspace server, despite its distant IP address.) My conclusion is bolstered by the many other similarities among these sites, including their common substantive theme, structure, layout, registration method, and advertising relationships and suppliers. Furthermore, the sites’ programs are largely similar — with identical detections, false-positives, and user interfaces.

An ordinary user would face substantial difficulty in determining that a given site is operated by C-NetMedia or in finding C-Net’s contact information. At a few of the sites, a user would at least find a street address in Whois. But the other domains all lack useful Whois data. Furthermore, while the listed web sites offer email and/or chat support, they all lack a phone number, mailing address, or even a legal name or place of incorporation. A user seeking to send a formal complaint therefore has no clear means to do so. Savvy users might notice a reference to C-NetMedia within a program’s license agreement. But these references appear only in the licenses shown by programs’ installers — not in the license agreements linked from the corresponding web sites. So these references to C-Net are especially hard to find after a user has already received C-Net software.

A user who manages to identify the C-Net company name, e.g. from trademark applications, is still substantially stymied in learning more about the company. The name “C-NetMedia” immediately suggests an association with CNET Networks, Inc., the well-known news site at www.cnet.com. In fact C-NetMedia and CNET Networks are entirely unrelated. But by choosing a name that matches an existing company, C-Net hinders attempts to learn more about its practices: Searches for “C-Net” overwhelmingly yield references to CNET Networks.

C-Net’s use of many names brings valuable benefits to C-Net but real costs to users: The numerous names prevent users’ unfavorable views of specific C-Net products (examples: 1, 2, 3, 4, 5) from easily spreading to other C-Net products. If C-Net had only a single product, users searching for that product would easily find the complaints of prior dissatisfied users. But by shifting from name to name, C-Net can abandon product names with unfavorable coverage, in each instance starting fresh with a new name. In this regard, C-Net’s approach is strikingly similar to Direct Revenue’s use of dozens of company and product names.

It seems C-Net sometimes uses the name 2squared to describe its offerings. The 2squared.com site claims to be the maker of at least some of C-Net’s products (including ErrorSweeper and RegClean). While C-Net’s trademark applications list one address in Mobile, Alabama (590 B Schillinger Road South, Suite 8), 2squared provides the adjacent suite 10.

C-Net’s trademark applications all list Erik Mv. Pelton as their attorney of record. Mr. Pelton’s tm4smallbiz.com site indicates that he is a bona fide trademark attorney with an office in Arlington, Virginia.

High-Pressure Sales Tactics and False Positives

C-NetMedia SpywareBot False Positives C-NetMedia SpywareBot False Positives

Once a user installs C-NetMedia’s free trial software, C-Net resorts to high-pressure tactics to encourage users to make a purchase.

I tested C-Net’s SpywareBot on a clean PC running Windows XP with no service packs,. My test PC was supplemented only by the ordinary analysis tools I use to study spyware and adware infections. SpywareBot detected Regsnap, my registry change-tracking tool, as the “Absolute Keylogger.” Bold red “Warning” messages repeatedly alerted me to the supposed “43 parasites” on my computer, and a “toast”-style slider arose from the bottom-right corner of my screen. Perhaps this was just an ordinary false positive — a mistake that any security program can make. But C-Net’s error was unusually self-serving in that C-Net requires users to pay a fee — in this case $19.95 — before removing any of the items it detects.

C-Net’s many products mean extended further investigation would be required to fully determine the effectiveness and error rates of C-Net’s various programs. Due to the seriousness of the advertising practices described above, I have chosen to post this article without fully testing for such false positives or other deficiencies across all of C-Net’s programs and across a variety of test computers. I will update this article to link to any such research performed by others.

Other Anomalous Marketing Practices: Affiliate Programs, Certifications, and Logos

C-NetMedia’s marketing programs are striking in their generosity: C-Net offers its affiliates 70% commissions on users’ purchases. Such large commissions tend to suggest that charges to users bear little relationship to the underlying cost of providing the service. In particular, when a user arrives at C-Net’s site through an affiliate link, at least 70% of the user’s payment goes towards marketing costs. But if marketing receives 70% of revenue, relatively little remains to fund product design or other core business functions. A user might be better off with a free product — such as the free products with names nearly identical to the names C-Net selected.

Many C-Net sites feature McAfee Hacker Safe certifications.C-NetMedia sites systematically and prominently tout certifications that are substantially irrelevant to the true attributes of C-Net software. For example, C-Net’s Adwarealert site boasts a McAfee HackerSafe logo. When this logo appears on a site offering security software, a user might reasonably think the logo means the site’s software will keep the user safe from hackers. But in fact HackerSafe signifies nothing of the kind: HackerSafe has merely checked the Adwarealert web server for a set of known security problems. C-Net’s use of the HackerSafe certification thus has the tendency to deceive, i.e. to leave users with an untrue impression of the certification’s significance.

Update (February 14, 11:30am): I notice that McAfee has withdrawn HackerSafe certification of C-NetMedia sites. C-NetMedia sites now show blank space where the logo previously appeared.

Adwarealert also features a Microsoft “Certified for Windows Vista” seal. Microsoft’s certification list confirms that Adwarealert did receive this certification. But it seems Adwarealert does not truly qualify for this certification because Adwarealert violates rule 1.11 of the Microsoft certification requirements, namely the requirement that a certified program comply with all applicable guidelines from the Anti-Spyware Coalition. The ASC’s Risk Model negatively characterizes incomplete or inaccurate identifying information; obfuscation; and misleading, confusing deceptive or coercive messaging or false claims to induce users to take action. By failing to readily provide accurate contact information, by using misleading product names, and by reporting false positives with a request for payment, Adwarealert violates each of these requirements. I therefore conclude that Adwarealert is ineligible for the “Certified for Windows Vista” certification.

C-NetMedia’s sites also feature unsubstantiated claims of product benefits. C-Net sites feature the following logos: “Guaranteed – 100% No Adware or Spyware”, “#1 Most Advanced Privacy Software”, “#1 Registry Cleaner”, “100% Safe and Secure”, “Total Privacy Protection,” “Most Advanced Anti-Spyware Detection,” and “World’s #1 Spyware Remover.” None of these claims contains, references, or links to any substantiation, documentation, or other supporting details. Some of these claims are presented in graphical form, i.e. in logos that appear to be endorsements or certifications. But C-Net gives no indication of any bona fide third party offering these endorsements; instead, the graphics seem to be C-Net’s own creation.


Work To Be Done

My analysis shows ample room for online advertising and security vendors to better protect users from C-NetMedia’s deceptive advertising practices:

  • Google and other search engines could block the widespread deceptive ads from C-NetMedia and its marketing partners. C-Net and its partners have continued these practices for more than a year. Google claims to be tough on malware, and Google does exclude some harmful organic search results. But Google has been ineffective in removing the false and deceptive ads shown above, among many others, despite ample complaints from users and security researchers.
     
  • McAfee could remove its Hacker Safe certification from C-NetMedia sites. At present, the McAfee logo gives users the false impression that McAfee endorses C-Net and the McAfee vouches for the effectiveness of C-Net’s software. I gather neither is truly the case. Indeed, McAfee’s HackerSafe certifies some C-Net sites at the same time that McAfee’s SiteAdvisor characterizes rates those same sites as red. In my view, the SiteAdvisor rating better describes the view of security experts and better serves typical users. (Disclosure: I serve as a member of the Board of Advisors of McAfee SiteAdvisor.) (Update, February 14, 11:30am: McAfee has withdrawn HackerSafe certification of C-NetMedia sites.)
     
  • Microsoft could withdraw its Certified for Windows Vista certification on the basis of C-NetMedia’s violations of various ASC rules, as cited above. Anticipating this kind of harmful marketing practices, Microsoft’s certification rules provide ample basis for excluding C-Net on the basis of its deceptive advertising. Microsoft’s concern should be particularly acute because C-Net copied the layout and format of the Microsoft Antispyware site, because C-Net marketing partners trade on Microsoft’s brand name and product names, and because C-Net products worsen the experience of Windows users (i.e. by charging a fee for security software, when Microsoft provides similar software for free).
     
  • ClickBank could eject C-NetMedia from ClickBank’s affiliate network due to the pattern and practice of false and misleading ads placed by ClickBank affiliates in their promotion of C-Net offers. ClickBank’s Client Contract specifically prohibits fraudulent, deceptive, false or misleading information in advertising messages (clause 7.n.), and Clickbank reserves the right to immediately suspend violators (9.d.). But at present, C-NetMedia seems to remain a ClickBank clent in good standing.

Thanks to security researcher Janie Whitty for references on C-NetMedia’s trademark registrations.

Posted on

On Best-Response Bidding in GSP Auctions

Cary, Matthew, Aparna Das, Benjamin Edelman, Ioannis Giotis, Kurtis Heimerl, Anna R. Karlin, Claire Mathieu, and Michael Schwarz. “On Best-Response Bidding in GSP Auctions.” Harvard Business School Working Paper, No. 08-056, January 2008.

How should players bid in keyword auctions such as those used by Google, Yahoo! and MSN? We model ad auctions as a dynamic game of incomplete information, so we can study the convergence and robustness properties of various strategies. In particular, we consider best-response bidding strategies for a repeated auction on a single keyword, where in each round, each player chooses some optimal bid for the next round, assuming that the other players merely repeat their previous bids. We focus on a strategy we call Balanced Bidding (BB). If all players use the BB strategy, we show that bids converge to a bid vector that obtains in a complete information static model proposed by Edelman, Ostrovsky, and Schwarz. We prove that convergence occurs with probability 1, and we compute the expected time until convergence.