Online Fraud…or is it?
The Wall Street Journal Maketplace section had an article on the front page, top of fold about the US Securities and Exchange Commission shutting down the ‘autosurfing’ site 12DailyPro.com. There is a lot to learn from how this case is resolved. Here’s why…
The difference between the new economy and the old one is that the old economy players relied on ‘economies of scale’ in production, while the new economy relies on ‘economies of networks.’ 12DailyPro was (supposedly) a really efficient way to build a huge network of people interested in website promotion. It was one of the top 400 sites (rated by Alexa traffic) on the Internet. It is safe to say that it was a top brand in website promotion.
The SEC shut down 12DP because it claims that, because 12DailyPro got most of its revenue from membership dues, that it was a Ponzi scheme. That logic makes every fitness club in America, for instance, a Ponzi scheme. I’m guessing that the SEC has more info than it is releasing publicly. But for now, by simply claiming that 12DailyPro is a Ponzi scheme, the SEC has been able to shut down a top brand in the website promotion business, with very little uproar from anybody. Isn’t this guilty until proven innocent?
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