Weather Underground, Incorporated v. Navigation Catalyst Systems, Incorporated et al

Filing 287

REPLY to Response re 283 MOTION for Withdrawal of Attorney William Delgado, Bruce Sendek, Benjamin Steffans, Nicholas Stasevich filed by All Defendants. (Attachments: # 1 Index of Exhibits, # 2 Exhibit A, # 3 Exhibit B, # 4 Exhibit C, # 5 Exhibit D, # 6 Exhibit E) (Delgado, William)

EXHIBIT E

Epic Fails: Who is Next?

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Epic Fails: Who is Next?
Written by pacelattin
May 13, 2012 # 1:18 pm # Marketing Insights, Specials # 10 Comments

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Epic Fails: Who is Next?

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Last week Epic (fka Azoogle) confirmed with Performance Marketing
were indeed closing down, unable to pay their publishers and affiliates. This would be
the biggest failure of an affiliate network since COPEAC’s demise, leaving many people
in the industry wondering what network would be next. Many affiliates are rightly
concerned that these developments signal that other networks may be about to fail.
The stories about Epic are disconcerting: the staff of Epic including Matt Mirman, who basically ran the
network, was completely left in the dark about the company’s future. The board of Epic never told them
anything, but at the same time many of the top executives including Don Mathis, the former CEO, separated
parts of the company to form a new entity called Kinetic Social, leaving many to believe they knew the time was
near for Epic’s complete failure.
The same problems that plagued COPEAC eventually caught up Epic: they were owed tens of millions by nonpaying advertisers and faced significant cash flow problems. As soon as publishers started talking about the
issues, it was probably only time that they would be unable to survive. Without the cash flow from the other side
of the business: the display and social, it was hard to save the company.
This comes only a few weeks after the announcement that Adteractive was going under, leaving many CPA
networks with major unpaid bills.
Affiliates should be very concerned. Many networks are paying out before they are paid, have little cash
reserves and worse, do not have a long-term business plan on how to make money besides brokering offers.
This is obviously part of the CPA game, but it’s a very dangerous game for those companies that have a few
core advertisers and affiliates that support them.
What are the major issues plaguing the industry that will cause problems?
1) Enforcement Actions
The FTC has made it clear that networks will be held accountable for more and more things, including the
actions of their affiliates. Combine this with more and more various State Attorney General actions, legal costs
are going up.
2) New Credit Card Rules
Hundreds of offers have been pulled because of new rules about re-billing that go beyond weight-loss offers.
Membership based sites that bill the credit card monthly, are facing strict new rules and many card processors
will not give merchant accounts to these companies. This is one of the issues that caused Neverblue’s parent
company to go bankrupt.
3) Education Offers Dying
The EDU industry was huge for almost a decade. New regulations by both the US Department of Education and
the schools themselves, have made it almost impossible to promote EDU offers like they used to be. Several
EDU companies have already bankrupted, and expect more.
4) Desperation
Too many networks are desperate for unique offers without checking credit worthiness or doing basic
background checks on companies. This means that they are working with companies that may not pay them, and
then not be able to pay affiliates.
Who do you think will go out of business next?

http://performinsider.com/2012/05/epic-fails-who-is-next/

5/15/2012

Epic Fails: Who is Next?

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Written by pacelattin
Pace Lattin is one of the top experts in interactive advertising, affiliate marketing. Pace Lattin is
known for his dedication to ethics in marketing, and focus on compliance and fraud in the industry,
and has written numerous articles for publications from MediaPost, ClickZ, ADOTAS and his own
blogs.

There are ten comments. Join the discussion.

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10 Comments

•

David says:
May 13, 2012 at 2:56 pm
Wow, I didn’t know there were so many problems in this industry. This is very interesting.
As I mentioned before, I have always kind of wondered about whether I was getting paid properly or not.
David recently posted..How I Failed With My First Rental Property And Turned It Into A Loser…
Reply to this comment »

•

Zara says:
May 14, 2012 at 5:28 am
Pace, very nice article and great analysis. I am lucky that I am accepted in top affiliate networks and
therefore am always paid on time!
Reply to this comment »

•

Blackberry 10 says:
May 14, 2012 at 10:44 am
I guess EWA is next in line.The reason is 98% of the offers they run are brokered from other
networks.when most of the BIG networks fail/have cashflow problems ,it will have a ripple effect on the
networks which broker the offers(Like EWA).The effect has already started.I have the experience in the
recent months how EWA is missing payments and failing to send payments on time (Most of those
promoting EWA offers will agree with me)
Already Neverblue (parent co filed for Bankruptcy),Clickbooth (with yahoo lawsuit),CX Digital are in
deep trouble ,may follow the suit soon
Blackberry 10 recently posted..BlackBerry 10 leak details screen-sharing, video apps and more
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Jemin says:
May 14, 2012 at 11:41 pm
True. Waiting on EWA payment as we speak.
Reply to this comment »

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Epic Fails: Who is Next?

•

Page 5 of 11

Sad Affiliate says:
May 14, 2012 at 10:55 am
I vote that Neverblue will be next to fail. Their parent company can’
don’t pay.
Reply to this comment »

•

NotSurprised says:
May 14, 2012 at 1:20 pm
I’m thinking CB then NB
Reply to this comment »

•

Byrl Lane says:
May 14, 2012 at 3:29 pm
This is what ends up happening. Definitely not for everyone. I wonder if the CEO received a golden
parachute when he departed.
The FTC is cracking down on these guys but what are they going to do to make to the other guys pay up.
It seems like they being impartial by not persuading both parties to hold up their end of the deal.
Byrl Lane recently posted..Mom runs over 3-Year-Old Daughter’s Back with a Van
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•

EPIC failure.. says:
May 14, 2012 at 8:24 pm
Don Mathis will pay for the mess he has created.
Quit talking about EPIC. Talk about Don Mathis. He is the crook behind all this.
Reply to this comment »

•

Kate Brown Wilson says:
May 14, 2012 at 10:32 pm
At first I really don’t get the main point in this article but as I have read it briefly it shows that there are
many problems we don’t know about the industry,I really admire your courage in sharing this for me to
know.
Kate Brown Wilson recently posted..condor
Reply to this comment »

•

john says:

http://performinsider.com/2012/05/epic-fails-who-is-next/

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Epic Fails: Who is Next?

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May 15, 2012 at 10:44 am
probly justin beiber lol
Reply to this comment »

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