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  1. #1
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    VCLK Tanks
    ValueClick is having their first quarter conference call tomorrow. The stock was downgraded by Standard and Poor's and is in a continued nose dive.

    http://quotes.nasdaq.com/asp/summary...lected=VCLK%60

    http://www.forbes.com/markets/2005/0...otix&referrer=

    Forbes lists the main reason for the drop as increased competition from Google and increased lawsuits over Valueclicks entanglements with adware.

    It is amazing that a pay per click outfit is tromping all over a performance marketing design. I think the main reason for this is trust. BeFree/Valueclick is notorious for pulling every short cut possible...beFree was an early partner and pioneer in developing parasites. BeFree killed its PPC merchants by allowing popup bandits and trick for clicksters to erode the legitimate PPC traffic.

    Valueclick killed most of the trust in its PPC model by running popups in their banner ads and other tricks for clicks schemes.

    The quarterly report will be interesting. I am interested to see if Google is really stealing the merchants and affiliates from VCLK as fast as the Forbes article implies.

    The best thing that could happen for affiliate marketing would be for Valueclick to fail, and for the market to pass to a company that wants affiliate marketing to succeed.

  2. #2
    ABW Ambassador ticketguyz's Avatar
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    Quote Originally Posted by yintercept
    The quarterly report will be interesting. I am interested to see if Google is really stealing the merchants and affiliates from VCLK as fast as the Forbes article implies.

    The best thing that could happen for affiliate marketing would be for Valueclick to fail, and for the market to pass to a company that wants affiliate marketing to succeed.
    Maybe Google will enter the AM scene from the other end. Can't say I'd mind as they seem to run a quality operation. How are they stealing merchants and affiliates from ValueClick though? Isn't it just ad space that they're overtaking?

  3. #3
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    Quote Originally Posted by ticketguyz
    Maybe Google will enter the AM scene from the other end. Can't say I'd mind as they seem to run a quality operation. How are they stealing merchants and affiliates from ValueClick though? Isn't it just ad space that they're overtaking?
    CJ's parent company (Valueclick) is a direct competitor to Google adsense. Reading the different press releases from VCLK, it seems that the parent company VCLK really is far more interested in the ad space market than the affiliate market. I suspect the upper management of VCLK still see affiliate marketing as an annoying amateurish phase that the Internet is going through. Some pundits think that affiliates and smaller merchants will quickly be consolidated out of the market, and the big multimedia ad companies will be all that is left.

    Read through the Valueclick site. You really don't see much excitement about having the lead role in affiliate marketing. The VCLK excitement is almost all directed toward their ad space offerings. Valueclick is an ad company first and foremost. The ad paradigm seems to dominate the majority of the company's thoughts and efforts.

    VCLK is also losing its dedicated merchants and affiliates to Google. It really doesn't seem that CJ and BeFree have been doing all that much to help affiliates maximize their revenue. In most cases, if you stick a Google ad on your affiliate pages, you will quickly get a higher return from Google than from BeFree and CJ.

    We are basically in the same position as in 1999. Then BeFree dominated affiliate marketing. BeFree had an IPO and secondary offering that raised a ton of capital. BeFree mispositioned its offerings and lost the majority of its market share to LS and CJ. They merged with Valueclick, a pure ad play, that also raised a ton of capital.

    The behemoth bought CJ, and once again is mispositioning itself in the market. Once again the biggest player in affiliate marketing is apparently undercutting their market and mispositioning the company as an ad company and not as an affiliate company.

  4. #4
    notary sojac Herb ԿԬ's Avatar
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    Google/Adsense has an affiliate program they seem to be testing, but by invitation only, unless they've changed it recently.

  5. #5
    2005 Linkshare Golden Link Award Winner  ecomcity's Avatar
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    Quote Originally Posted by yintercept
    CJ's parent company (Valueclick) is a direct competitor to Google adsense. Reading the different press releases from VCLK, it seems that the parent company VCLK really is far more interested in the ad space market than the affiliate market. I suspect the upper management of VCLK still see affiliate marketing as an annoying amateurish phase that the Internet is going through. Some pundits think that affiliates and smaller merchants will quickly be consolidated out of the market, and the big multimedia ad companies will be all that is left.

    Read through the Valueclick site. You really don't see much excitement about having the lead role in affiliate marketing. The VCLK excitement is almost all directed toward their ad space offerings. Valueclick is an ad company first and foremost. The ad paradigm seems to dominate the majority of the company's thoughts and efforts.

    VCLK is also losing its dedicated merchants and affiliates to Google. It really doesn't seem that CJ and BeFree have been doing all that much to help affiliates maximize their revenue. In most cases, if you stick a Google ad on your affiliate pages, you will quickly get a higher return from Google than from BeFree and CJ.

    We are basically in the same position as in 1999. Then BeFree dominated affiliate marketing. BeFree had an IPO and secondary offering that raised a ton of capital. BeFree mispositioned its offerings and lost the majority of its market share to LS and CJ. They merged with Valueclick, a pure ad play, that also raised a ton of capital.

    The behemoth bought CJ, and once again is mispositioning itself in the market. Once again the biggest player in affiliate marketing is apparently undercutting their market and mispositioning the company as an ad company and not as an affiliate company.

    As usual your "spot on" in your analysis Yintercept. My mantra since ranting on affiliate boards from the beginning was... The sooner the networks distance themselves from the Advertising Mindset ...the quicker they will live up to their promise and original mission statement.

    No one at VC or LS can fathom that the shopper/consumer factor into their ebiz plans. They are just pawns to be manipulated and abused by the mass advertising tricksters playing the grand eyeball numbers game funded by advertising budgets.
    Webmaster's... Mike and Charlie

    "What have you done today to put real value into a referral click...from a shoppers viewpoint!"

  6. #6
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    Sadly, VCLK raised so much capital in the dotcom IPOs of BeFree and VCLK that they can dominate and define the affiliate marketing landscape. The market keeps voting against them, as we can see with the company's continue stock market woes.

    Were they to really embrace affiliate marketing, they would easily be a $100 a share company like. As it stands, they've successfully capped the potential of this market, and with nothing to show for it but several hundred million dollars of lost investment capital.

  7. #7
    ABW Ambassador Andy's Avatar
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    Yep, I think the smart companies are staying as far away from the "gray area" as possible. It's evolving now, and is looking more illegal and unethical than ever before, although it always has been in my opinion.

    As long as companies continue to cater to thieves who benefit financially from the work of others, they are in danger of losing everything when the rug is pulled out from under them.

    Andy

  8. #8
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    Whaaat? Spot on??? Valueclick's site deals mainly with valueclick, so surprise surprise they feature what valueclick does. CJ's site, hold on, features CJ! OMG! CJ must hate valueclick!!! Yes, valueclick thought so little of CPA that they purchased CJ, that makes a lot of sense.

    It is simply they have kept the two brands fairly seperate. There is actually some CJ cpa ads on valueclick, but valueclick's main model is cpm/cpc through traditional banner ads.

    The reason people are saying google and them are competitors is because google is a) taking advertisers from the banner market with their text ads, b)entering the cpm banner market themselves.

    And read recent posts about google, they are embracing a new form of scum and no longer kick out site scrapers. So they have their problems too.

    Chet

  9. #9
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    Chet, thanks for the astute observation. I should begin posts with a full description of terms. ValueClick is a thing called a corporation. It is a publicly traded corporation. The coporation Valueclick trades on the NASDAQ stock exchange under the symbol VCLK.

    Because they are a publicly traded corporation, they are required to file certain financial documents throughout the year. For example they will have a thing called a quarterly report. A quarterly report is prepared by people called "accountants." The use structured documents called Balance Sheets and Income Statements to show the financial health of the company.

    These quarterly reports are generally released in a thing called a quarterly report. After market, on May 4, 2005. The company called ValueClick will have its quarterly meeting. Chet, are you following? This is really complicated stuff.

    A corporation is a legal entity that owns properties. The corporation Valueclick owns a property called valueclick. This property called valueclick is an internet based advertiser. They also own a property called mediaplex. They are in but are not the leader in the adspace market.

    The corporation Valueclick was super clever. They had an IPO at the height of the dotcom boom which gave them lots of money. The corporation Valueclick used that money to buy other internet properties.

    The corporation Valueclick owns BeFree and CJ. Entities owned by a bigger company are called "subsidiaries". BeFree and CJ are subsidiaries of Valueclick.

    Chet. This is really counter intuitive: In the American system of coporate governance, the owners of property are the owns that control the property. The owners are the boss.

    CJ and Befree, being subsidiaries of Valueclick, implement the game plan of Valueclick.

    The quarterly report prepared and given by Valueclick will be about all of the properties owned by VLCK, and is one of the best indicators of the direction that BeFree and CJ will take.

    The web site Valueclick.com is the corporate site for the Valueclick corporation. Hence it is the corporate web site for BeFree and CJ.

    And read recent posts about google, they are embracing a new form of scum and no longer kick out site scrapers. So they have their problems too.
    I agree 100% that market domination by Google is not a good thing. The whole reason I started a thread about the quarterly report is that I do not like this domination by Google. I believe that CJ and BeFree are the most valuable properties owned by Valueclick and that they need to make affiliate marketing the primary focus of the company.

    Today, there was an article about Valueclick trying to distance itself from Adware, 180solutions. The stock gained back the amount it lost yesterday.

    By owning BeFree and CJ, Valueclick has the dominant position in affiliate marketing. If the corporation makes affiliate marketing its primary focus, I believe they could be a $100 stock in a year or two. If corporation Valueclick continues to flounder about with internet advertising as their primary focus, I believe that the company will continue to flounder.

    I really do not consider this to be a good thing.

    We are all poorer because Valueclick/BeFree has a history of underselling and undermining their cash cow affiliate marketing. The market knows this which is why it is not giving Valueclick high multiples on the price of its stock.

  10. #10
    ABW Ambassador ticketguyz's Avatar
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    Quote Originally Posted by yintercept
    By owning BeFree and CJ, Valueclick has the dominant position in affiliate marketing. If the corporation makes affiliate marketing its primary focus, I believe they could be a $100 stock in a year or two. If corporation Valueclick continues to flounder about with internet advertising as their primary focus, I believe that the company will continue to flounder.

    I really do not consider this to be a good thing.

    We are all poorer because Valueclick/BeFree has a history of underselling and undermining their cash cow affiliate marketing. The market knows this which is why it is not giving Valueclick high multiples on the price of its stock.
    What's your basis for the $100 claim? Where is all the EPS going to come from that will drive the price of the stock up 1000% in a year or two? Won't CJ be profiting at the expense of, say, affiliates? I'm just curious where all this money will be coming from if they focus their efforts on AM. Can you point to any analyst's opinions that discuss the underselling and undermining of the cash cow? I'm not trying to debate you... just curious what's backing up your reasoning.

  11. #11
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    Read through the Valueclick site. You really don't see much excitement about having the lead role in affiliate marketing. The VCLK excitement is almost all directed toward their ad space offerings.
    sorry for having read your post and stupidly thinking when said you were looking around valueclick's website you meant you were looking around valueclick's website. My part of how they have kept their sites and companies essentially seperate, well hell - you got the great point that they bough CJ and BeFree because they hate affiliate marketing, hard to argue with that... and listing the various companies they own and pointing to them on their hompage? hiding things by putting them in the open is just a stroke of brillance...

    But i liked the consending part of your post, that is really neat to do, and maybe next time you will find the right time to post it.

  12. #12
    ABW Ambassador ticketguyz's Avatar
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    Quote Originally Posted by chetf
    sorry for having read your post and stupidly thinking when said you were looking around valueclick's website you meant you were looking around valueclick's website. My part of how they have kept their sites and companies essentially seperate, well hell - you got the great point that they bough CJ and BeFree because they hate affiliate marketing, hard to argue with that... and listing the various companies they own and pointing to them on their hompage? hiding things by putting them in the open is just a stroke of brillance...

    But i liked the consending part of your post, that is really neat to do, and maybe next time you will find the right time to post it.
    pssst....chet, it's "condescending"

  13. #13
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    I am only a novice at the condescending post. I read your work, but, I doubt I will ever master the art form.

    you got the great point that they bough CJ and BeFree because they hate affiliate marketing, hard to argue with that...
    These is a modern capitalist firm. They bought BeFree and CJ because they wanted the dominant position in the market. Buying the dominant position in a market does not mean a company likes what the company does.

    Like BeFree, I think Valueclick is split on their relation to affiliate marketing. Since Valueclick owns two of the top properties in affiliate marketing, the strange relation the company has to the market has a profound effect on the market.

    Personally, i think the VCLK quarterly report is one of the best places to guage and discuss directions in the market.

  14. #14
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    Quote Originally Posted by ticketguyz
    What's your basis for the $100 claim? [...] Won't CJ be profiting at the expense of, say, affiliates?
    The affiliate network gets a slice of the money from affiliates. They make their money by increasing the amount of money that affiliates make. The reason that Google is going gangbusters is because people are making money hand over fist with Google right now. I doubt that this will continue; however, you make money in this industry by providing a tool that helps other people make money. AM is not a zero sum game. It seems that BeFree and CJ just keep doing things that devalue their market.

    Affiliate marketing is more like commissioned sales than media advertising. Valueclick hobbles itself by thinking of their offerings in advertising terms. Mike's continued points about the advertising mindset is completely appropriate. Advertising is more of a fixed pool, commissioned sales is a much larger market.

  15. #15
    Yup, Sure ... now let me check ... Cagles Mill's Avatar
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    ValueClick (VCLK:Nasdaq - commentary - research) beat first-quarter earnings targets Wednesday and guided toward solid gains for the year.

    The Westlake Village, Calif., online marketing services company earned $8.7 million, or 10 cents a share, down from the year-ago profit of $13.4 million, or 16 cents a share. Year-ago earnings were boosted by a dime-a-share gain on the sale of a stake in a Japanese unit.

    Revenue rose to $51.4 million from $38.7 million a year earlier. The numbers beat the Thomson First Call consensus estimate, which called for an 8-cent profit on sales of $49 million.

    "Our multiple online marketing channel strategy helped drive 40 percent pro-forma organic revenue growth and a doubling of operating income year-over-year in the first quarter," said CEO James Zarley.

    The company also guided to an 8-cent second-quarter profit on sales of $52.5 million, matching the Wall Street earnings estimate and nudging the revenue guidance higher. The company guided to 2005 revenue of $218 million to $223 million, in line with the Wall Street target.

    ValueClick shares were unchanged in late action after adding 71 cents during regular trading Wednesday to $10.65.
    Personally, I wouldn't mind seeing them go down the toilet, but the first quarter results they posted today doesn't sound like they're doing too bad.
    Rick M.
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  16. #16
    ABW Ambassador ticketguyz's Avatar
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    Quote Originally Posted by yintercept
    The affiliate network gets a slice of the money from affiliates. They make their money by increasing the amount of money that affiliates make. The reason that Google is going gangbusters is because people are making money hand over fist with Google right now. I doubt that this will continue; however, you make money in this industry by providing a tool that helps other people make money. AM is not a zero sum game. It seems that BeFree and CJ just keep doing things that devalue their market.

    Affiliate marketing is more like commissioned sales than media advertising. Valueclick hobbles itself by thinking of their offerings in advertising terms. Mike's continued points about the advertising mindset is completely appropriate. Advertising is more of a fixed pool, commissioned sales is a much larger market.
    But to increase revenue is not always to increase profits. They could actually see lower margins if they do what's necessary to increase revenues. What do you propose VLCK do differently (in specific terms) to increase their profits in AM? I just don't buy your arguments at this point. Obviously CJ could make some improvements in infrastructure and provide some more metrics to help affiliates mitigate some of their risk, but they can't do anything to dramatically boost their own net income to a level that justifies a stock price increase of 1000%. Kicking out the parasites would likely hurt their earnings (hence, why they put up with them). Maybe if they enter the affiliate market themselves with full force and just wipe us peeons out they'll have a better chance of achieving what you say.

  17. #17
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    I am still confused why yintercept keeps talking about google going like "gangbusters" and advertising is bad. yintercept, you do know google is not a cpa or affiliate centered system right? That it is a traditional advertising model? And I am really confused by this statement, "Advertising is more of a fixed pool, commissioned sales is a much larger market." Do you have any proof that traditional web advertising cpm/cpc is smaller than cpa?

  18. #18
    MasterMike HardwareGeek's Avatar
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    I don't think BeFree will be around much longer.
    They don't even have it listed on valueclick.com

  19. #19
    Ad Network Rep ToddCrawford's Avatar
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    Quote Originally Posted by HardwareGeek
    I don't think BeFree will be around much longer.
    They don't even have it listed on valueclick.com
    BeFree is now Commission Junction. All of the people work for the same company now. The technology that BeFree marketed is called BFAST and it supports hundreds of strong programs and will be around for a long time. More details are available here - http://www.cj.com/solutions/adv_bfast.jsp
    Todd Crawford
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  20. #20
    ABW Veteran Mr. Sal's Avatar
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    Quote Originally Posted by ToddCrawford
    BeFree is now Commission Junction. All of the people work for the same company now. The technology that BeFree marketed is called BFAST and it supports hundreds of strong programs and will be around for a long time. More details are available here - http://www.cj.com/solutions/adv_bfast.jsp
    Thanks for that info Todd,

    Now I will know what to do with BeFree.

    Since BeFree joined Cj, I stop going to the BeFree Network because I thought that they where going to expire, so I didn't even bother to update my links or the datafeeds.

    Again, thanks for the update info Todd, it's too bad that the people at BeFree didn't had the decency to at least email their members to tell us that they where going to stay alive after the fact.

    Sal.

    .

  21. #21
    Ad Network Rep ToddCrawford's Avatar
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    We have made announcements regarding the merger with BeFree. We have also added the capability for you to get consolidated reporting and linked accounts via the CJ publisher interface. In other words, you can link all of your BeFree and any additional CJ accounts via the CJ publisher interface and get consolidated reporting and the ability to log into any of these accounts with one click.
    Todd Crawford
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  22. #22
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    Is it possible to get the befree merchants commissions consolidated with CJ's commission check. Right now, I get befree checks individually, 1 for each merchant which is why I hardly ever promote them.

    Consolidating befree commissions with cj commissions in a single check would be an incentive to promote befree merchants too.

  23. #23
    Lite On The Do, Heavy On The Nuts Donuts's Avatar
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    Karma.
    It has begun.

  24. #24
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    you do know google is not a cpa or affiliate centered system right?
    Damn. If I said that Google is a Cost Per Aquisition outfit as you claim, then I am the person you despise. All I wanted to do with a post to was find a provocative way to frame the violent swings that VCLK is having with its stock at the moment.

    Judging from the different press releases on VCLK and its wild swings in the last several days, Valueclick is having a tough time defining its position in the market.

    You are completely right. I should have begun the post with a detailed description of the product offerings of Google and a step by step comparison of how they match with a product by product comparison of VCLK. Instead, I took the cheap ass way of pointing to a press release by Standard and Poor's that said downgraded the stock on fears that Google was taking traffic from Valueclick.

    Google is a company that trades on the NASDAQ with the symbol GOOG. They main product is a search engine. Recently they released a pay per click (PPC) program called adwords. Originally adwords was restricted to listing on their home page. They later released a program called Adsense that allows third party web sites to run adwords pay per click ads on their web site.

    The corporate entity Google is a direct competitor of the corporate entity Valueclick in that the product adsense is a direct competitor to Valueclick's product called Valueclick media and, I believe it is a competitor with Mediaplex (I am not sure of the exact positioning of MOJO in the market).

    Google is an indirect competitor of CJ in that people are replacing CJ ads because they are finding that they get a better return from Google.

    I am surprised that a PPC marketing program is outperforming a performance market program because PPC lacks the market feedback that you get when you track the web traffic all the way through to sales. PPC traffic, especially when third parties are involved, has the problem that it is easy to fake clicks.

    What adsense has that CJ does not have is a bid mechanism. It seems to me that, in the rush to gain market dominance, the big three affiliate networks were doing everything possible to make their networks attractive by pushing down potential earnings of the affiliates. The market has been pushed low enough that it has driven legions of potential affiliate marketers out of the business.

    Come on, look at the crappy commissions at most affiliate programs. I ran some Alaska Air ads. Alaska Air gives $2.00 for a $1200.00 sale. What a joke!

    Google adwords is showing that the market is values web traffic at a substantially higher rate than the performance gigs are paying. This in itself is sufficient to make that claim that the networks have undercut their market.

    Speaking of undercutting the market, the conference call indicated that CJ's big push in the next several quarters will be its new PriceRunner program. This product is in direct competition with many affiliate sites. CJ will probably try to gain market share for Price Runner by further pushing down affiliate commissions, in finding ways to divert the traffic from affiliate sites directly to Price Runner.

    The company VCLK seems to have lost yesterday's gain because the company's mindset is entirely focused on gaining market dominance by crimping profit margins and commissions.

    Personally, I believe that Valueclick would become a $100 a share company if they turned from gaining dominance by crimping margins to creating more affiliate wealth by creating more positive feedback mechanisms to award quality affiliates. CJ would grow tich by making affiliate marketing more lucrative for entrepreneurs.

  25. #25
    ABW Ambassador ticketguyz's Avatar
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    "...by creating more positive feedback mechanisms to award quality affiliates..."

    Like what? Examples? How does it translate to more net income (and enough to justify a $100 share price)?

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