VentureBeat's Matt Marshall looks into the controversial post transaction marketing techniques of two Seattle area companies --WhitePages and Intelius -- and concludes that "Intelius is certainly no worse than WhitePages." The analysis follows Seattle Weekly's scathing profile of Intelius, which noted hundreds of consumer complaints and pointed to some of founder Naveen Jain's past legal troubles.
Both companies provide online directory services so that consumers can look up phone numbers and conduct background checks. And both offer advertising and special offers after a purchase is made to obtain the electronic records. After that purchase, is where things get interesting.
I recently looked at the tactics of both companies as well, and what Marshall reports is accurate. WhitePages' post transaction marketing offers provided through a partner site known as US Search just keep coming and coming, making it nearly impossible to get to those records requests. I was left wondering why anyone would use the US Search product. (Editor's note: The post has been corrected to reflect that the marketing offers in question come through the WhitePages' partner and advertiser US Search, not directly from WhitePages.)
WhitePages' John Lusk tells VentureBeat that their offering is provided by a third-party company by the name of US Search, and acknowledges that the messaging is not very clear. He said the company is planning to change that as part of a larger rebranding effort that's coming in June.
Marshall writes:
"And WhitePages is stuck: The company is sort of addicted to the money it gets from US Search for directing it the traffic. It gets paid for every click through to the US Search page, and that income is much more lucrative than the advertising WhitePages gets to its own services."
An interesting read, which also points out that Microsoft is using the WhitePages' service for its people search on MSN.
In an interview today with TechFlash, Jain said he wonders why Microsoft would engage in business with a company that is involved in deceptive marketing practices. He also said he stands behind the practices of Intelius.
"We believe that Intelius is useful and that the advertising is transparent because all of the advertising on Intelius is looked at by a privacy and consumer protection committee," he said.
I have an email into WhitePages founder Alex Algard to get his reaction to the story.
UPDATE: Here's Algard's statement on the report.
"WhitePages does not do post-transaction marketing. Some companies do, but we have chosen to not engage in that practice. End of story on that. Furthermore, I do not think it is fair to blame WhitePages for what might potentially happen on third-party websites, when we make it clear to users that they are clicking on sponsored ads.
We are highly protective of the trust that we have built with our users, and it is unfair to compare us to with other companies with lower standards."
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