I've started this article about
ten times. I know what I want to say, but want
to insure that my intent is clear to readers.
I'm writing this article not with the intent to
hurt Tucows, but with the intent to help small
Unfair Competition & Abuse
Last summer, rumors were abound
that an employee of Tucows was using Tucows statistical
information in order to determine which products
produced the highest return on investment, with
the intent to clone them and create competitive
products. While not illegal, it is definitely
questionable from an ethical standpoint. No real
proof existed, so what can be said. It was nothing
more than a rumor.
An article cannot be written based
on rumors. What facts do we know? According to
the State of Michigan corporate records Alto Software,
Inc. is owned by a Tucows employee. Alto Software's
two products Alto Block All and Alto Memory Booster
were posted on Tucows. Both products have high
download counts and held top download positions
from November 2003 to February 2004. In order
for Alto Software to maintain top positions throughout
the holiday season they would had to have spent
thousands of dollars in advertising dollars.
Abuse of Power
Abuse of power sounds pretty absolute, unfortunately
that line isn't as clear as one would think. It
appears that the ad spots held by Alto Software
were provided free of charge. Free advertising,
while possibly an employment perk, and not of
itself bad, resulted in the cost per click to
increase significantly for other developers in
those categories. In order for Alto Software to
maintain their top position, the cost per click
was raised from $ .04 per click to more than $
.40 per click from November to January. Alto Software
increased the cost per click, in order to maintain
the top position, but were never required to pay
for the clicks. This forced other developers wishing
to remain in a top listing to pay significantly
more for each click. The handful of developers
bidding on keywords and categories were forced
to spend significantly more money each month,
in order to maintain their position and compete
against Alto Software's products.
A software promotion company (softwarepromoting.com)
that appears to be a subdivision of Alto Software,
guaranteed listings on Tucows.com. Softwarepromoting.com's
website even went so far to say, that software
promoted using their services was exempt from
the Tucows removal process. Competing submission
services were unable to provide these guarantees.
The legitimacy of Alto's promotion service also
requires close scrutiny.
Alto Software clearly had an unfair
advantage over their competitors. It would appear
that a Tucows employee personally profited from
their position at Tucows. There is a fine line
between breaking ethical rules and using your
unique position to make a profit. It appears that
line was clearly crossed.
Developers need to track their advertising dollars
and measure their return on investments. They
should be aware of any rapid increases in spending.
Developers, need to know who their competitors
The developers affected by this
are in a very narrow market but it really could
have happened to anyone.
Apparently the upper-management of Tucows was
unaware of what was occurring, while ignorance
is not an excuse, it appears that Tucows has taken
the first steps to resolve the problem. The employee
is no longer employed by Tucows. As one of the
developers I spoke to said "Tucows is bending
over backwards to make things right." I personally
hope that this is the case. I encourage Tucows
to make an effort to reach out to all the developers
that were effected, whether they are aware of
the problem or not. The loss suffered by these
developers is difficult to measure, not only did
they pay excessive amounts for advertising, but
they also lost a portion of sales to a competitor
with an unfair advantage, during the holiday season.
Here is my challenge to Tucows,
reachout to the smaller developers as well as
those with deep pockets and make things right!
The second part of the challenge is to put strict
policies in place to prevent this from occurring
The challenge to developers is to
stay alert, and be aware that this can happen.
There are a number of download sites owned by
developers, the disclosure is usually obvious,
developers need to pay attention. Spending advertising
dollars on a competitor's site is probably not
a good business decision. Clearly Tucows is held
to a higher standard because of its stature in
the industry. The fact that Tucows is a publicly
traded company only emphasizes their accountability.
It was not to Tucows benefit, for this to occur
and it is likely that they will be taking radical
steps to ensure that it does not happen again.
If handled correctly, Tucows may become one of
the safer places to advertise in the future.
About the Author:
Sharon Housley manages marketing for NotePage,
a company specializing in alphanumeric paging,
SMS and wireless messaging software solutions.
Other sites by Sharon can be found at http://www.softwaremarketingresource.com
, and http://www.small-business-software.net
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