The AGLOCO Controversy. How Paid For Surf Scams Work
Every once in a while the media uncovers the shady world of online scamming. The AGLOCO scandal is the latest example. If you don’t know what I’m talking about, take a look at Lars’ post called Agloco hot or not and get the latest situation in this controversy.
What boggles my mind most is the fact that most people think that Agloco is something new. This couldn’t be further from truth, paid to surf programs or autosurf programs as they are also known have been with us almost since the inception of the World Wide Web.
Why are autosurfs scams? Well, the basic idea of the paid to surf programs, at least in its initial stage, was simple and straightforward. People were paid to view some online offers, in the hope that somehow they will be convinced to actually buy into them. It didn’t take very long though to observe that the conversion ratio for this sort of programs was extremely low and the interest of the advertisers quickly faded. This didn’t mean however that paid to surf had died, they would simply evolve into a much darker, complex stage and this where frauds began.
The basic conclusion that the administrators of these programs drew, was the fact that it is relatively easy to attract participants in them, but extremely difficult to attract advertisers, so a new way was needed to use this potential attractiveness without using advertisers at all. The most obvious solution? Ponzi structures. What is a Ponzi scheme? Well, it is a structure that functions like an investment program where the money paid off actually come from other investors and no real revenue is generated. For this, there must always be a rather lengthy period between the moment a participant invests the money and the moment he receives the promised amount. In the case of paid to surf programs, this period is conveniently covered by a period in which the participant must browse certain sites belonging to the other users of the network.
So how is a paid to surf program really structured? Well, its users come from two distinct categories. Those that invest and those who don’t. For both of the categories it is made rather clear from the beginning that they can make a lot more money if they bring in other participants. This happens mostly because a Ponzi structure requires a user base which increases exponentially over time to keep on functioning. The first category, those who do not pay are usually awarded very small sums (1$ per day is considered a lot) with the notable exception when they manage to attract (via the affiliate program) some paying participants. The paying participants are offered much better deals and the sum they can potentially win depends on the sum invested and the number of referred participants.
The fact that all the users are required to surf these sites ensures that the program has an appearance of a legitimate business, it also gives the owners a method to eliminate those who complain because these will usually stop surfing for the program when they begin realizing the scam.
Quite often though, these programs are not pure Ponzi schemes, but also have other venues of monetization. Quite often they will sell this traffic that they generate. Who would buy this sort of traffic? Well, despite the very low conversion ratio, there are customers. Most of them usually employ this method to attract attention to their own paid to surf programs and other will employ this technique to manipulate stats that measure the traffic (Alexa for example). This is the reason why such stats are looked at skeptically in the webmaster world. There are companies though such as the reputable Text Link Ads that still use this factor to give weight on how much a link is worth. This is the reason for which shady marketers still buy this sort of traffic.
This is a mere introduction to the world of paid to surf programs and many other issues still remain uncovered. If you have any questions, I will do my best to answer them.
UPDATE: I have submitted the story to Digg. you can vote it here
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Comments
I agree with you regarding the low conversion and low value of ads in such a channel. After all, would any sane business person advertise if they knew that the viewer, rather than being motivated by their interest in the service/product, was financially rewarded for clicking/viewing their ad?
Also, the Ponzi nature of the scheme is that they require a critical mass of serfs to er… surf. But these peeons are only getting credited for 5 hours a month!!! most Agloco’ers think it is 5 hours a day! LoL And Agloco reserves the right to minimize this further. Once the trickle of pennies starts to the peeons, the whole scheme will unravel. I give it less than 3 months - after the viewbar is released. Correction: IF the viewbar is released.
But I disagree with some points you bring up. For example, people aren’t ‘investing’ in Agloco, except with their time. And there is no requirement to surf specific sites. It seems that you haven’t looked at the basics of how the fabled Agloco viewbar is supposed to work. Yes, it is more commonly sighted than a unicorn but it does not force you to view specific sites.
Well scams happen and when they happen their always seems to be some bearded Norway guy held holding the bag.
I have heard rumours about Lars. But Like always I keep my opinions neutral lets hope everyone can keep with http://netneutrality.com . And make information more accesible and more safe for the general public.
@Babak
I know you are disagreeing now, but wait and see. I have absolutely no doubt that at some point Agloco will offer a “special” offer which will bring monetization closer to the model I described. The weird thing about Agloco is the fact that they still don’t have their program running, except the affiliate part. I am 100% convinced that when they’ll start (if they start) they will try to capitalize on their users, rather than on advertising.
I am even willing to make a bet on it 
Regards, George
@Kevin
Lol! Lars is the good guy :). He simply made a fairly long post regarding the entire situation linking to all the appropriate resources (including Babak’s post at tradersnarrative).
Regards, George
See my reply to a likeminded post on Agloco
http://aglomerate.com/2007/03/27/reply-to-kumikos-agloco-is-a-scam-post-2/
You guys just post this to get traffic to get adsense revenue!
@ 1dollar
I will give you something else to ponder on. Autosurfs do not equal MLM. If you really want to know how they work, with proper examples I suggest that you take a visit to the “Den of Thieves” especially this sub forum.
Be aware that all the programs listed there are scams, although some of them will actually pay up a limited amount of time, before they can’t face the exponential rate of growth associated with Ponzi scams. What you fail to recognize is that Agloco is not a valid business, because it doesn’t have a proper revenue model.
If you really want to make money online, I strongly suggest that you find an alternative.
As for the Adsense part, a read of this thread at Bloggst, will show you the reason for their presence.
Best regards, George
Autosurfs and Agloco is not the same. Autosurfs show you sites from advertisers, Agloco doesn’t, it’s just a small viewbar that will display ads just like the ads you will see from Adsense when you visit a site.
Agloco is not an autosurf. It’s revenue model is based on advertising similar to adsense. The money doesn’t come from the members but from the advertising industry.
you wont lose anything for trying and nobody can tell yet if its a scam. what if they pay?? agloco is new and i have high expectations for them. i believe they would pay! 
” Well scams happen and when they happen their always seems to be some bearded Norway guy held holding the bag.
I have heard rumours about Lars. But Like always I keep my opinions neutral lets hope everyone can keep with http://netneutrality.com . And make information more accesible and more safe for the general public. ”
What the heck was that? :-O
Im full agreement, tell 1dollar to learn to read the fine print
Its a scam-
http://15000dollarmission.blogspot.com/search/label/Agloco scam
Linking your post on Sunday´s post
Very nice coverage of many of these programs George, and I like how you angeled it at these schemes in general instead of just AGLOCO. I don’t know why so many people think it is different though, but most should like I said in my own article, that there’s no such thing as a free meal.