Many commenters in previous TechCrunch posts on PayPerPost compared their business model to payola in the music industry. At PayPerPost, bloggers are offered cash to write about products. Disclosure is optional, and often the bloggers are required to only express positive comments. The company is now well funded, and a number of competitors have launched. This “virus” seems here to stay. Don’t look for PayPerPost to require blogger disclosure anytime soon. Instead, they are creating a distraction, designed to keep the buzz about PayPerPost going strong, as well as to move people’s attention away from the core issue of blogger disclosure of product shilling. In a move reminiscent of big tobacco funding tobacco research, PayPerPost is announcing a new initiative on Monday called DisclosurePolicy, which “provides policy creation tools, best practices and forums for discussing the delicate balance between content creator freedoms and audience transparency expectations.” DisclosurePolicy creates a disclosure policy for bloggers to post on their blogs, based on their answers to a few questions. They will also pay every blogger who posts a PayPerPost disclosure policy on their blog $10. While that sounds like a fine idea, PayPerPost bloggers should also be disclosing the fact that they are being paid for their post prominently within the post, not on some separate page in their blog. Also PayPerPost subtly works with the language they use, particularly around the definition of “compensation” to suggest that all blogs have bias (and therefore PayPerPost isn’t really that bad). Here are the three choices – bloggers must choose one: This blog does not accept any form of advertising, sponsorship, or paid insertions. We write for our own purposes. However, we may be influenced by our background, occupation, religion, political affiliation or experience. This blog does not accept any form of cash advertising, sponsorship, or paid topic insertions. However, we will and do accept and keep free products, services, travel, event tickets, and other forms of compensation from companies and organizations. This blog accepts forms of cash advertising, sponsorship, paid insertions or other forms of compensation. If you are a PayPerPost blogger, or the New York Times, or anything in between, you must pick the third option. That’s because “taking advertsing” and “paid insertions” are defined as the same thing. And even if you have no form of advertising or other revenue on the site, you have to admit to bias based on “background, → Read More

We first covered PayPerPost when it launched three months ago. The service is a marketplace for advertisers to pay bloggers to write about products for a fee. Commenters to our original post were polarized into those violently for and those againt the product. The key area of controversy is the fact that advertisers can mandate that posts be positive on the product, and disclosure of payment is optional for the blogger (screen shot at end of post shows sample available writing opportunities). The controversy didn’t stop venture capitalists from quickly jumping on board, though. On Tuesday PayPerPost will announce a $3 million round of financing led by Inflexion Partners and with participation from Villiage Ventures and Draper Fisher Jurvetson. Dan Rua from Inflexion and Michael Barach from Villiage Ventures will take board seats. Josh Stein from Draper Fisher Jurvetson will become a board observer. Rob Hof from BusinessWeek and I spoke to founder Ted Murphy and DFJ’s Josh Stein earlier today about the financing and the product in general. The conversation is available as a podcast at TalkCrunch. Rob’s post on the news tonight is here. Ted says his business is doing quite well in spite of (or possibly due to) all of the controversy raised by paying off bloggers to write about certain products. And Josh Stein at DFJ seems excited about the potential profitability of the company while downplaying the ethical issues raised by this and other blogs – the market will sort things out, he says. Some back of the envelope calculations based on numbers Ted disclosed in the podcast suggest that revenues after the first few months of operations have topped $100,000. Podcast Interview with founder Ted Murphy and VC Josh Stein is here. → Read More

Ted Murphy, CEO of advertising firm Mindcomet, has launched a new service called PayPerPost.com. You guessed it, it’s a marketplace for companies to connect with bloggers who are willing to blog about a product – for a price. The companies can set guidelines for their requests such as whether a picture must be included and whether they will only pay for positive blog coverage. There does not appear to be any requirement that the payment for coverage be disclosed. There is a requirement that PayPerPost.com must approve your post before you are paid. Wow. TechCrunch does not accept payment for posts. Is this a bad joke designed to torpedo the blogosphere’s credibility in general? It doesn’t appear to be. If we’re all trying to negotiate a space between Hollywood and mainstream journalism, this is taking things way too far towards the most insipid parts of Hollywood. Clearly comfortable with the “all press is good press” paradigm, Murphy is emailing bloggers with a link to scathing coverage at Business Week (“Polluting the Blogosphere“) and even includes the words “As seen in Business Week” in the company logo. Blogger Jeremiah Owyang gave us the tip on PayPerPost.com and assures us that though he has grave concerns about this, Ted Murphy is not the devil. I don’t know if I’m convinced. If you visit the Mindcomet.com website you’ll see that they do advertising for some very high profile clients. I can imagine many of them wouldn’t want to be associated with a project like this at all. Like EarthLink. They have a major campaign underway to improve advertising by paying people to make authentic promotional materials for them. How ironic. → Read More