Myspace Sues 20+ Ad Networks For Over $500 Million

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Jon

Jon

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Jun 21, 2006
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Well, while I sit here typing this, I'm pretty shocked by the news. Here at ASW in Vegas, spirits were high for the last 2 days, but have since been shattered by Myspace's announcement to sue at least 20-25 ad networks that many of you know all too well. Some really big ones, others are small to medium sized. Basically, they aren't just going after the big guys in this one, they are obviously doing this to make a point the first time around.

This news is coming from 3 different trusted sources, who gave me the thumbs up to leak the news (even before some of the companies on the list will find out they are on it) but would prefer to remain anonymous. Who can blame them either, eh?

I've got a bunch of confirmed sources on the story as well.

Here's what I know for sure:

Myspace's lawsuit against the networks are to ban them, and their owners from visiting the myspace.com site.

Myspace is seeking punitive damages from $20 million to $75 million PER network.

Myspace is using the strict California state anti-spam laws as basis for the punitive damages cash amount. These laws are meant for email, not bulletins, but for some reason, they are using this as the reason for the crazy damages suit.

I have a list of 6 confirmed networks and 14-17 unconfirmed networks, but will hold off on releasing the names of them until I am absolutely sure they are involved. I was debating on releasing the names, but seeing as this is one hell of a blow that will most likely kill off a network, I think it's safer to just wait a bit and see who is really on the list and who isn't.

The biggest network being hit is CPA Empire for a staggering $75 million.

I've been saying this for a while now, Myspace was actively monitoring the spam-friendly haven forum known as Screennameforum.com. The list of networks being sued reads like a shopping list, because they all, at some point or another drafted known Myspace spammers and phishers into their programs to promote their offers, even AFTER cease and desist letters were issued to them by Myspace.

It really sucks that this is happening, but at the same time, I don't blame Myspace for their actions, nor do I blame them for doing this and using the networks as an example of their anti-spam rules. This should act as a warning to the entire industry, that spam, no matter email or social networking, is probably not the best route to pursue.
 


If this does in fact happen, and the confirmed networks are found guilty, we'll be seeing a lot of people filing for bankruptcy. Shakeups like this are good for the industry in the long run. Kills off the bad ones and only keeps the good. I do feel bad for the networks on the list I have, because I'm pretty good friends with all of their owners and a lot of their AM's, and would hate to see them close shop and disappear.

As more information comes my way, I'll post it.
 
I have never read the legal definitions for what constitutes spam and their associated penalties but from what I've read recently spam e-mail has increased. Given that these aff networks have so many clients working through more legitimate venues I have a feeling MySpace may have a hard time trying to get $20 million+ for spam unless the companies were stupid enough to have documented policies against punishing/encouraging spammers. If they didnt at least take measures to give the social spammers a slap on the wrist and new affiliate ID then maybe they deserve the penalty.

I imagine a settlement + agreement to improve cooperation in the future will be the likely result. Smart policy might be to close an account that is complained about for spam, set dead aff Ids to act as a corporate affiliate for any deals resulting from the defunct IDs, and leave re-registration available so that the best will return. Spam affiliates would be forced to improve their tactics, stop altogether, or generate a large $ bonus for the aff network (who takes over their dead IDs) in the process. By shutting down the account, I mean to also pay the affs their balance and not hoarde it all or the system ends without the repeated gains.
 
It's 3am here in Vegas now, just got off the phone with 2 more network CEO's that have confirmed that they are indeed being sued, and both are in the $20M-$30M area. Insane.
 
Wow I can't even name 20 ad networks. Thats so many.

But there will be an out of court settlement for these cases...the numbers are so high.

The networks can only do so much to police thier users.

They will have to take a stand against myspace and terminate any afiliate on the spot caught using myspace to promote an offer.
 
so i guess this concerns everyone even those ignoring the myspace market if our network goes bankrupt. way to go rupert - this is part of a vast right wing conspiracy to draw attention away from the war in iraq.
 
Wow - this is a huge bombshell!

I agree it's ultimately good in the long run. It's going to sting for quite a while, but ultimately good offers will find better and cleaner networks, and good affiliate managers will be able to find jobs because of it.
 
Jon said:
It really sucks that this is happening,
Click to expand...

I don't think it sucks at all. I think spamming is lame, spamming MySpace has always been equally as lame. I suspect the idea that bulletins on MySpace are not e-mail are not going to be a very successful defense to any of this.

I have no sympathy or empathy for anyone who was making money Spamming MySapce. Anyone who thought a billion dollar company owned by even a bigger billion dollar company was going to allow some spammers to essentially destroy their business was a major league fool.

While I hope the networks that have actively taken a stand against myspace spamming, I know some of them openly promoted it all the while, and I hope their entire network evaporates.
 
Spam wasn't destoying myspace. There is no evidence of that especially considering how Myspace traffic shows no signs of slowing.

Like email or aim spam, most spam is ignored. Some gets through but any metwork that has millions of users will be spammed.
 
EFUT EFUTURE said:
Spam wasn't destoying myspace. There is no evidence of that especially considering how Myspace traffic shows no signs of slowing.

Like email or aim spam, most spam is ignored. Some gets through but any metwork that has millions of users will be spammed.
Click to expand...

That is an idiotic position. E-mail spam sucks. I know I get thousands of e-mail spam a day. Saying it is just ignored is dumb.

It certainly is having an impact on MySpace, evidenced by this action none-the-less. Don't be one of the fools.
 
I hate email spam, too but I still use email because I have filters that elliminate 95% of it. I hardly get any in my inbox. If you ignore myspace bulletins you will avoid 95% of myspace spam. The majority of myspace usuers also ignore bulletins becasue they are crap. So the problem almost fixes itself.

But despite the fact that email spam exists you can;t just go after every company that is utilyzing email spam- that is too costly and difficult even with CANSPAM laws.

Myspace need to simply make it harder for spammers to well..um..spam by restricting more of the code. Disabling live links in bulletins & messages would be a big help for example.
 
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