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Cashing Out: Week of October 12-18th, 2008 in Online Marketing News
Belts Tighten as Layoffs Increase
Layoffs hit several major companies this week as the market impacts were felt in the online tech sector. Companies announcing layoffs included:
Yahoo -According to the The Wall Street Journal an estimated 1,000 jobs are being cut
Zillow – Who despite strong growth eliminated 25% of its workforce
Hi5 -Trimmed 15% of its staff from HR and QA Testing and Design
AdBrite – Laid off 40% of its staff, mostly impacting Marketing and Sales
Twitter Changes Captains
Jack Dorsey stepped down as CEO of Twitter. The position now falls to Co-Founder Evan Williams. Despite praise for Dorsey’s role in the company according to Williams’ blog the move was driven by the board. Dorsey will continue with the company in the role of chairman.
Twitter has created a vastly loyal following but many still doubt whether the company can actually make money. In a great quote from Wired, Union Square Ventures’ Fred Wilson expressed his frustrations about the doubt: “It’s like the stupidest question in the world: How’s Twitter going to make money?” he asked. “It’s like ‘How was Google going to make money?’”
The company raised about $15 million this summer bringing the value of its resources to around $20 million with a company valuation of about $80 million.
DarkMarket Sting Nets 56 Worldwide
The FBI on Friday announced that its two-year long undercover operation against users of the blackhat forum DarkMarket netted 56 arrests worldwide and prevented $70 million in economic losses. DarkMarket allowed buyers and sellers of stolen identities and credit card data to meet and do business in an entrepreneurial, peer-reviewed environment. It had 2,500 users at its peak, according to the FBI.
British police say they’ve arrested five DarkMarket users in recent days, and 11 since the sting began in late 2006. The other arrests have been in Turkey, Germany and the United States, according to the FBI. Documents uncovered by a German radio network on Monday first revealed that DarkMarket had been secretly run by an FBI cybercrime agent for the last two years, until its voluntary shutdown earlier this month.
Norwegian Police Raid Microsoft Subsidiary
Norwegian economic crime police raided the Oslo headquarters of Fast Search and Transfer ASA on Thursday on suspicion it had inflated revenue before it was bought up by Microsoft Corp. for $1.2 billion in January.
The police were acting on a complaint filed by the government Financial Supervisory Authority in April, which claimed that Fast broke basic accounting and documentation rules by inflating its reported revenue by 250 million kroner ($40 million).
Last month, Microsoft head Steve Ballmer said during a visit to Oslo that his company had reviewed Fast’s books ahead of the purchase and was not worried about the complaint.
FTC Coordinates Shut Down of Worldwide Spam Ring
Authorities announced that one of the largest spam operations in the world, a vast network involving countries from New Zealand to China and the United States which the Federal Trade Commission received more than 3 million complaints about, was shut down. The sites, including one called “Canadian Healthcare,” were difficult to distinguish from legitimate online pharmacies — making the pitches more persuasive, said Steve Baker, the FTC’s Midwest Region director.
The operation violated the federal CAN-SPAM Act of 2003, meant to restrict commercial spam. As part of their inquiry, FTC staff made undercover purchases from the sites. No one asked the clandestine buyers to provide verification of a prescription and the shipped drugs did not include doctors’ instructions or dosage information, officials said.
Those spearheading the enterprise, known as “Affking” on the Internet, included a U.S. and a New Zealand citizen, according to court documents. Servers in China hosted the Web sites and the drugs were shipped from India, while operatives in Cyprus and the former Soviet republic of Georgia processed credit card information, officials said.
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