Comment by Matsta | Hacker News Reader

Comment by Matsta | Hacker News Reader

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Ahh this brings back some memories.

The articles mentions the guy who made the cooking stuffing software. He was pretty active on a private part of a forum I'm still part of.

Anyway eBay went after the forum as well, and promptly deleted his account and all the threads mentioning eBay. They also moved their servers offshore and deleted pretty much every thread that mentioned eBay in it.

I do remember he wrote a massive long thread about how the FBI raided his house and seized all his computers. He said the FBI agents weren't even told why they were conducting a raid on him and actually felt kind of sorry for him. He charged a pretty hefty price for the software ($500/month for the basic plan), but it was pretty advanced. They figured out that they could spoof referrers in flash, so rather then have a 1x1px image file, it was a tiny .swf file.

People were banking on that though, eBay first, then Amazon. You could buy shitty porn traffic and parked domain traffic for literally $1-2/1000 uniques visitors and stuff them all with cookies.

It was also round the same time Craigslist cracked down on affiliate marketers. People were literally getting hundreds of conversions a day on rebill offers like credit ratings and dating verification offers. One guy fled to South America so Craiglist and the FBI couldn't find him as he was literally making 6 figures a day.

I probably have said too much, but now everyone is pretty smart now. Facebook were the last ones to smarten their act up since their whole system/backend had so many loopholes in there it wasn't funny. Plus their security team only worked Monday-Friday, so if you noticed up until 2012, there would be a bunch of spam on your feed during the weekends.

I also tend to believe that these companies sanctioned this activity until they were against it. A year after they claim to have started investigating it, they invite one of the guys to a private dinner where he is the only non-eBay employee in attendance, and treat him like a king. Its a contradiction.

Very interesting stuff. That must have been a fun forum at the time, when easy money was to be made like this. Thanks for the insight.

it's Ockham's razor time:

Cookie-stuffing results in a significant cost to eBay and no additional revenue. No sane company would sanction it (beyond maybe turning a blind eye to someone doing the odd bit of cookie-stuffing if they earned most of their commission on driving real sales). Of course, plenty of sane companies that have departments that don't talk to each other about ongoing investigations and sales guys focused on next month's commission...

The program managers' role was to encourage an apparently very effective affiliate marketer to drive more real traffic to eBay, whether that was because they believed most of his referrals were genuine, thought they could persuade him to switch strategy to actually doing real marketing for eBay or simply adopting a business-as-usual approach whilst waiting for the fraud investigation to conclude. Either way, by his own admission Hogan wasn't remotely interested in investing in actually driving traffic to eBay even if they provided additional cash to support it...

I agree. The interests of an individual may not always 100% align with the overall interests of the company. That's true at eBay as it's true at almost every company out there.

I am more interested, for example, at making the clients I talk to on a day to day basis happy with my work than I am on the exact profit margin my company makes every time I bill an hour of my time to that account. I see my job as making my clients happy, not making my company's stockholders richer. Hopefully one leads to the other.

Agree. The reality is that the people managing the affiliate programs aren't that knowledgeable. Any encouragement was just blind rah rah boostering, with no comprehension of how they were driving commissions.

If anything, this just shows how clueless big companies are about online marketing "techniques".

I also tend to believe that these companies sanctioned this activity until they were against it.

Why? It provided absolutely no value to them. Actually worse, it cost them affiliate fees on sales that rightfully would have been affiliate fee free.

There is no scenario where it makes sense that eBay (edit: wow originally wrote Amazon) would endorse this.

they invite one of the guys to a private dinner where he is the only non-eBay employee in attendance, and treat him like a king.

Have you considered that maybe his sense of truth is a little skewed?

So eBay is cutting him a check for $1 million to $2 million per MONTH. This equates to $2 million to $4 million a month in profits for eBay that they share 50% with the affiliate.

When his traffic drops, the affiliate manager calls him and asks to do whatever it takes to get his numbers back up. It looks bad on her. "Why is affiliate revenue down 20% this month?" her boss asks.

She doesn't even CARE that it's crappy traffic. She needs affiliate revenue to rise and rise every month no matter what.

Every person at eBay doesn't have to act in the best interests of eBay, just in the best interests of their job at eBay. I'll believe that there were dozens of people at eBay who were encouraging him to do whatever he could to get his numbers up, no matter if it was white hat, grey hat or black hat. They didn't care.

And then suddenly one day someone cared.

I'm not saying its right to defraud them. I'm saying I can believe they condoned it at one point.

Obviously eBay thought that the traffic is compliant. They didn't know that this was just cookie stuffing and that the sales they were paying to him for would happen anyway. When his affiliate sales declined, affiliate manager would of course be worried and try to re-engage the affiliate. But how stupid eBay affiliate managers could be if they didn't notice that actual sales volume was the same whether with his traffic or without. Well, maybe not completely stupid after all, if they finally had some grey matter to realise something fishy (and so simple) was going on..

The problem is that, unbeknownst to them, consumers received a stuffed cookie from eBay from some random website having no awareness of anything regarding eBay at the time. It's only because these consumers just so happened to visit eBay on their own initiative within 30 days and performed specific activities that an affiliate payment was generated. Had these affiliates not even been involved, there would be no change in the behavior of the consumers; they would have visited eBay anyways and eBay would therefore not have had to pay out any commissions.

I agree with the rest of your analysis. Someone who was incented according to affiliate activity likely did encourage this, even if they suspected or had knowledge that it wasn't above board.

Saying "one rogue account rep sanctioned this" (which even that I deeply doubt) is quite a world removed from saying that the company sanctioned it, which was your original statement.

I'm not saying the rep was "rogue". I'm saying eBay set up their affiliate program to encourage affiliate sales "no matter what" and then in 2008 they started caring for quality of affiliate links when they didn't care before. Let me try this another way.

There are companies out there that pay salespeople a percentage of total revenue they get customers to buy, regardless if the order is profitable for the company. So salespeople offer 50%-75% discounts for their products to customers in order to get customers to buy, the salesperson makes the commission off the full retail price before discount, and the company loses on every sale with -75% gross margin. It's a fast-track to bankruptcy. No sane company would do this right? That company was called Ecomom. It happens that companies do things against their interest without knowing it as long as top line sales go up.

Companies give people license to do things in their own interest that are NOT in the companies interest all the time.

Right, I agree with you. It's easy to imagine an affiliate rep who is incentivised by affiliates doing well, i.e. they get paid based on affiliate sales. You can even imagine some ebay affiliate reps being "ok" with a description of how they're generating their hits because they're incentivised by the affiliates doing well. Until someone upstairs figures out what's going on. Then, of coure, the affiliate rep is completey clueless about what happend and is shocked that someone would do this!

What a scam both ways.

> Why? It provided absolutely no value to them. Actually worse, it cost them affiliate fees on sales that rightfully would have been affiliate fee free.

Well, it provided value to ebay's affiliate manager who could boast about how much revenue his affiliate program drives in. In a big corporation there are many factions. :)

Exactly.

Theory: Not eBay, eBay but maybe the affiliate managers encouraged it. Maybe they get cut based on affiliate sales so it was in their best personal interest to have as many aff sales. Downsides are plenty but only if discovered and if top eBay management didn't like it.

If they were investigating him, they wouldn't want him to stop the illegal behavior until prosecutors had a good case. If they turned off the cookie stuffing, it may have prevented the criminal case which would make the civil case harder.

Said too much? Everything you said could have been learned by a lurker on Black Hat World.

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