Online Media

Are Online Pay sites part of a secret Cartel?

As per Merriam-Webster Online, A cartel is defined as :

2
: a combination of independent commercial or industrial enterprises designed to limit competition or fix prices

This is a common phenomenon, where a group of companies or Enterprises “fix” certain aspects like Areas of operations, market areas, prices, discounts and even behavior towards a perceived or actual common rival.

Often, such cartels are present, about whom, public and Governments are aware about. However, there could be cases where such cartels could operate in a way that is hidden from common knowledge and one needs to analyze a lot deeper to figure out the truth and the extent to which such a cartel operates.

I am going to explore one such case of a probable cartel that none talks about, but some of us might be able to sense them.

The Origin of Online Paying sites
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The first site that I joined and which paid Online for discussions and answers was Mylot.com in the year 2007. Then, I joined Clixsense.com- a paid to click site.
However, sites that paid for writing content, and other things were in existence before that. I once read a comment by a user of a site that one of the sites existed even before 2003!

How these sites came into existence, and for what purpose?
I have not gone into depths on this topic, and this topic is a bit obscure one since such sites are not as Hot and famous like say Google, Twitter, Facebook etc.
Yet what I have made out is that since yearly 2000 s, Internet users’ numbers started to rise exponentially due to rise in broadband connections, Wireless connections and Media blitz.
They first expanded in the Western World, and then in countries like those in Middle East, China, India, Indonesia, Malaysia, Japan, South Korea, Pakistan, Bangladesh, Brazil and many more.

Some Entrepreneurs calculated that if people used a site a lot, then they are likely in between to see and/or click advertisements displayed on the web pages of that site. Such clicks could lead to direct purchases, or at least bring certain brands to customers'(in this case the web site users) mind that they could eventually purchase something of that brand either Online or Offline.
To keep and retain such customers on the website, they came up with a plan to pay the users for the things they did on the website(applicable except for direct pay to click-ads sites).
Initially, sites like Mylot.com paid users a certain undeclared amount based on how much they interacted on that site- how much they responded and discussed.

Expansion of Online sites- Year 2009 onwards
_____________________________________________

Initially, the sites such as Mylot, and some sites in the arena of pay to write paid a very miniscule amount to the users- a fraction of their Ad revenue. So making 10 US Dollars on an average took 3 to 4 months(1/2 months for exceptional users).
The writing sites which paid were more for professional kind of bloggers and it was not easy for a casual blogger, or writer there. Even Helium.com had stringent norms and reaching 25 USD took quite a lot of time.

So, why such sites started expanding- sites like Mypage5.com, which was a combination of Pay for writing blog and Mylot like discussions and commenting, Bubblews, Wikinut, and later Tsu, Mykites and Blogjob emerged?
The answer could be this:

There were some enterprising guys who laid out grand plans of capturing Millions of users on their sites aka Facebook or Twitter, and promised a larger slice of Ad revenues, or even Media events.
They laid these plans before Venture Capitalists or Angel Investors. Such VCs or Angel Investors like well thought out plans and they have in the past supported seemingly risky or not so promising ventures like Skype- which did well eventually.
So they hooked on and gave Millions or even Billions of Dollars of funding to such proposers of Online work payment sites, and they expanded.

What went great and what caused the downfall of many
____________________________________________________

As described in the previous section, sites armed with tons of Venture Funding money attracted users with higher payout rates- a classic example was Bubblews and to some extent Mypage5, but there are other sites too. Some like Wikinut went on more steady and conservative path and hence survived on this pay to work online path a bit longer.
Users flocked to such sites like the Gold Rush of the earlier centuries.
The advertisers too came a lot to these sites. Cash and Revenues were flowing freely initially.

Yet many do rise, but not all manage to stay afloat. The advertisers in many cases did not get Return on Investments (ROI) as expected, or perhaps they got other better avenues to explore.
Due to lower Advertisement support, these sites losses begin to mount. Venture funding too lowered as the time when VCs or Angel Investors start expecting returns on investment and fresh funding might have been curtailed.
All this put the sites in quandary. Some began to pack. Some like Bubblews initially lowered pay rates a lot, and eventually packed up, with announcements that seemed like very honest admissions, but done in a not too transparent manner and one which disappointed users, many of whom had devoted a lot more time on these than one can expect.

Is a Cartel in place among Online sites
________________________________________

Year 2013 starting: Mypage5.com goes almost dead- no fresh payouts, no announcements from the Admin, and Bubblews which was gaining users before sees a sudden spurt in the userbase and hype.

Late 2014- Bubblews goes on a downswing and new players like Tsu, Persona Paper and a few more start getting hype and user base.

Mid to late 2015- Bubblews goes down and sites like Blogjob, Mykites etc gain audience. Wikinut stops being a paying site, though I think it always operated with a steady approach, so we can leave this site.

May 2016- Blogjob temporarily suspends its rewards program, and last reported sites like Persona Paper were either down or not in good times.
Now, I have heard that some new site is emerging.

While to some such a pattern might seem to be of little interest, but is there any smoke without fire?

Somehow, I can see that if someone goes down, some other comes up.
I have an explanation, which I cannot prove, yet it just might be right.

When a site like Arvind Dixit’s Bubblews is going downhill, such site owners or Admins try to “sell” their idea, or site rights and make a decent exit. Now, many of such guys to whom things are sold are also based in and around the Silicon Valley of California, US, and many have a number of connections. So, some connection buys another one’s site or idea, lays out new plans and gets some venture funding. Early on, the sites make some good money to show off, and vast userbase.
However, when downswing happens, the userbase sentiments’ and aspirations go for a toss and they are in for disappointing times.
Some of these are even such people who do not work Offline, and rely heavily for their daily needs on Online sites.
They are the worst hit, along with some of the retrenched staff of such Online sites.
Yet these owners operate in a way that things do not become apparent and go away without any liabilities.

To sum it all up, trends and patterns indicate that the way things operate in case of Online Pay for work sites, there is something more than what meets the eyes. Now, whether this is being done in legal but not so moral ways, or there is something even legally not strong? Well, the secret is not yet out in the open!

Source referred:

Definition of Cartel at Merriam-Webster Online

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1 thought on “Are Online Pay sites part of a secret Cartel?”

  1. An article written in professional manner. However, would like to add that some online websites continue to exist. Not all suffer from sword of mismatched RoI. Everyone does mistakes. In order to gain traffic, such websites end up luring users but all such tricks prove fatal in the end.

    So, they are short lived. A simple rule says – reduce your costs and profit will grow automatically. While upgrading is better, not all upgrades are actually necessary. It is necessary to check and evaluate each and every step.

    Like

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