Facebook Sued for Stifling Competition, Click Fraud
It’s a saga we’re all familiar with by now: create a pretty awesome web service, start a trend, become a media sweetheart, make lots of money (VC or acquisition), get slapped with a lawsuit. Or two. Or fifty billion. Facebook added two more lawsuits to its heap recently: a countersuit from Power.com and a click fraud proceeding.
Facebook filed suit against Power.com in December. Facebook claimed the one-stop social-media aggregator was infringing upon their copyright, violating their TOS and scraping proprietary data. At the time, we weren’t sure whether “proprietary data” included user information.
Power.com finally decided not to take this sitting down. TechCrunch reports that Power.com has now filed a countersuit, claiming Facebook is “unlawfully withholding the data that users own (as stated in Facebook’s own ToS), and is stifling competition by refusing to allow third party services like Power.com to access the data, among other things.”
Facebook also faces legal action from RootZoo, an erstwhile advertiser. After analytics from their Nov 2007-June 2008 campaign varied greatly from Facebook’s reported data, RootZoo requested Facebook’s logs and a refund. Facebook said no to both.
RootZoo’s complaint uses 2 June 2008 as an example of the discrepancies between the two. While Facebook reported 804 clicks on their ads, RootZoo’s analytics programs show 300 clicks from the social networking giant.
While there have been rumblings about Facebook click fraud for some time, this is the first suit in the matter.
What do you think? Does Facebook have anything to worry about from these legal claims against it? Is there anyway to avoid getting slapped with lawsuits once people see you’re making some money?
Ballmer on Advertising: “We Have Reset and Won’t Rebound”
Microsoft CEO Steve Ballmer was honored as Media Person of the Year at this year’s Cannes Lions International Advertising Festival. As he addressed the festival, however, he pulled a bit of a Calacanis (you guys do remember when Calacanis called seo “bull@#&%” in an SES keynote, right?). Ballmer told the assembled media and advertising gurus that, basically, we can kiss the good old days of rolling in dough goodbye.
Among other tales of doom and gloom, as reported by the Guardian:
- “I don’t think we are in a recession, I think we have reset. A recession implies recovery [to pre-recession levels] and for planning purposes I don’t think we will. We have reset and won’t rebound and re-grow.”
- “There won’t be [only traditional] newspapers, magazines and TV programmes. There won’t be [only] personal, social communications offline and separate. In 10 years it will all be online. Static content won’t cut it in the future.”
- “Some say that the ad-funded model has not led to profitability. Google’s search site makes money but past Google is there a publisher with an ad-funded or fee-based model that has made lots of money? No.” [Sour grapes there, dude?]
- The old approach of simply trying to replicate a print newspaper online is doomed to fail, Ballmer added.
Meanwhile, ClickZ focuses on some of Ballmer’s other remarks, including how much MSFT has increased its advertising spend recently:
Steve Ballmer said the company’s spending on annual measured media has climbed from $200 million to $700 million over a four-year period, as the company serves up new campaigns for Bing, Xbox, Windows, Internet Explorer, and other products.
But ClickZ agrees that Ballmer’s bearish on the future of advertising overall:
Rather, he sees a bigger future for marketing investments that cost less — and will therefore contribute fewer jobs and less money to the economy. “In an economy where the cost of production is close to zero, you get all kinds of changes to the monetizaton models.”
What do you think? Has the Internet permanently changed the way advertising will work, or will models—and prices—recover to resemble their offline predecessors?
Pilgrim’s Partners: SponsoredReviews.com – Bloggers earn cash, Advertisers build buzz!
