Moola's Interesting Business Model

Moola is a new website, in private beta, that puts two visitors up against each other in a simple Flash game. The interesting thing about the site is that people are playing for real money.

Moola gives each new user $0.01 to start. You play against another player at your level, and the winner takes all of the money from the other person. So each time you win, you double your money. Win 30 times in a row and win $10.7 million. A user can “cash out” at any time and have a check delivered to them with their current balance. If you lose, you start over at $0.01.

The service is advertising supported. You have to watch a short video ad (every time I played it was for and then answer a question correctly about the ad. Once you’ve done that, you can play the next round.

I tried playing a few games and it seemed legitimate. I can’t tell if I was playing against a computer or not, though. Moola always found a rival to play against me within seconds, and the games are very simple and could be easily played by a computer. Given how easy it would be for Moola to beat successful players by automated means, I would assume that the risk of fraud is significant. The CEO of Moola addressed this question on the Moola blog.

What’s more interesting is Moola’s business model: paying users to watch ads. At the very least, they succeeded in getting stuck in my head.

Moola also has a multi-tiered referall system. When you refer a user, you get a 4% bonus calculated based on any money they cash out for the following year. You get a 3% bonus from any friends they refer, and so on to the fourth level. Multi-level referrer programs are smart, in a pyramid scheme kind of way.

It’s in private beta now. You can sign up for the beta on the home page.