Why is this interesting? - The Phone Farm Edition

Colin here. When I was a freshman in college there was a service called AllAdvantage. It was a scheme where you’d get paid for having banners on your desktop, and you would be cut paper checks based on how much time you were exposed to the advertising. Genius! 

Their slogan was “get paid to surf the web” and the whole thing had a pyramid scheme vibe, whereby you would invite more people and then get a slice of their payouts. Some guy even painted his car with the colors and his referral code. The company managed to raise a lot of venture capital and also served as the precursor for a lot of the spyware and more nefarious parts of online advertising that exist today. 

Even though this was an earlier and more innocent time on the internet, chaos predictably followed. There was a tremendous amount of referral abuse and people gaming the system, including someone building software to make it seem as if a human was browsing 24/7.

According to Complex’s the 50 worst Internet startup fails of all time:

AllAdvantage was a great company for high school kids who wanted to make $100 a month, but failed to impress advertisers who didn't see the value in such a poorly paid demographic. The company paid out most of its venture capital to kids surfing the Internet, while failing to attract advertisers. The business model never had a prayer.

As of January 2001, AllAdvantage Inc. went out of business, having paid out most of its money to kids like me. But wow did that paper check in the mail make a college student’s day. 

Why is this interesting? 

Though the internet has gotten considerably more boring for me than the days of downloading Napster files and spending hours on AIM (while getting my Alladvantage checks), it made me smile to see that similar end arounds were recently being employed. 

A recent piece in Motherboard outlined the very futuristic idea of “phone farming”:

I made a small "phone farm," able to fabricate engagement with advertisements and programs from companies like Netflix, as well as video game trailers, celebrity gossip shows, and sports too. No one was really watching the trailers, but Netflix didn't need to know that. The goal was to passively run these phones 24/7, with each collecting a fraction of a penny for each ad they "watched.”

Hobbyists and those looking to make a bit of money across the U.S. have been doing the same, buying dozens or hundreds of phones to generate revenue so they can afford some extra household goods, cover a bill, buy a case of beer, or earn more income without driving for Uber or delivering for Grubhub. The farms are similar to those found overseas, often in China, where rows and rows of phones click and scroll through social media or other apps to simulate the engagement of a real human. Every few months, a video of these Chinese farms goes viral, but in bedroom cupboards, stacks in corners of living rooms, or custom setups in their garage, American phone farmers are doing a similar thing, albeit on a smaller scale.

This is, of course, a form of ad fraud. But like AllAdvantage, it’s not clear the platforms care all that much. As our lives are being increasingly tracked and monetized, with privacy eroding everywhere, I thought this was a small, interesting act of rebellion. Making the advertising industrial complex work for you. At least to buy some groceries, or as I did in my freshman year days, a case of cold beer. (CJN)

Recommendation of the day: 

Good cables are a luxury, and I like the stuff from Native Union. They use really nice materials including fabric, have a variety of lengths and applications, and are also experimenting with form factors including this cone cable that even I couldn’t manage to lose. I also really like the international travel chargers, allow 4 devices to be plugged into that hotel room that strangely only has one outlet. (CJN)

Quick Links:

• Reader Lilla sent in this tip after yesterday’s edition: “A friend of mine worked on a doc related to the conservation topic that you might like: Trophy. It's particularly interesting because of the range of characters and the interconnected web of storylines - big game hunters, locals, a rhino horn farmer, etc.”

• Bridgewater’s Ray Dalio on the impact of China’s Growth on the world economy. (CJN)

• Interesting minerals/geopolitics tidbit here in the FT. Glencore to halt cobalt mining, due to a dramatic fall in prices. “The price of cobalt has fallen more than 40 per cent this year because of a surge of supply from the DRC, the world’s largest producer.” Cobalt is one of the key elements needed for electric vehicles. (CJN)

• Friend of WITI Felix Salmon did a good podcast interview with venture capitalist Scott Kupor about his new book Secrets of Sand Hill Road. (NRB)

Thanks for reading,

Noah (NRB) & Colin (CJN)