Pay to surf (PTS) is a business model that became popular in the late 1990s though it saw significant decline after the dot-com crash. Internet users installed programmes that tracked their browsing, and displayed targeted ads. Companies would use income from advertising placed on the users screen to pay them for time spent browsing the web.
A PTS company would provide a smaller program to be installed on a member’s computer. Advertisers’ banner ads were then displayed while the member was browsing the web. Since the company’s Viewbar software tracked websites that the user visited, the PTS company was able to deliver targeted ads for their advertisers. Advertisers paid the company a small amount (typically US$0.50) for every hour of a member’s surfing.
Members were usually limited on the amount of time per month for which they would be paid to surf (typically 20 hours). However, PTS companies also paid their members for each new user referred to the company (typically US$0.05 – US$0.10 per recruit). It was profitable for a member to garner as many referrals as possible, encouraging some users to recruit members using spam, though officially forbidden by the user’s agreement. Minors, many of whom flocked to these business models as an easy source of income, were required to obtain consent from a parent or legal guardian.
The most well-known PTS company was AllAdvantage. It launched in March 1999 and grew to 13 million members in little over a year with the multi-level marketing system of recruiting new members. The scheme capitalized on the notion that anyone could make money on the internet without much effort.
By late 2001, with the dot-com bubble’s collapse, very few PTS companies remained as 100% of the revenue came from internet advertising. This was an area hardest hit.
As with many Internet business models, PTS companies attracted people trying to defraud the company out of money. The companies had to deal with spammers, often having to terminate member accounts. Software utilities started appearing which allowed users to simulate surfing activity. Some users also created mechanical mouse-moving devices which ran around their desks (i.e. “JiggyMouse”). These programs and devices allowed users to get paid simply for leaving their computers on. This began an arms race between the PTS companies who built fraud-prevention software and fraud program developers, with each releasing increasingly sophisticated versions of their software.
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Ofer Abarbanel is a 25 year securities lending broker and expert who has advised many Israeli regulators, among them the Israel Tax Authority, with respect to stock loans, repurchase agreements and credit derivatives. Founder of TBIL.co STATX Fund.