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The Almighty Buck

Extortion and the UGO Network? 239

An Anonymous Webmaster asks: "I'm the webmaster of one of the largest websites on the UGO Network. This past month UGO gave notice to all affiliates that they say all guarantees are gone and will only make payments up to February's ad traffic at half rate. Yes they are currently 2 months behind on payments. (This includes HardOCP, ShackNews, BluesNews, VoodoExtreme, Telefragged, OldManMurray, my website and many others. UGO handed out contracts last week saying we must forfeit all our rights to previously owed money and rights to sue them to get those last 2 checks. Yes that's right, if we don't sign a paper saying we wont sue them they will withhold 2 months of payments they already owe and have available to them. Does anyone have any realistic advice for all these webmasters? A lawsuit just doesnt seem like it would really net any cash." Now this just doesn't sound fair at all. It's a shame that these big site networks aren't able to pay their sites what's owed, but is such extortion really the answer? I'm sure many webmasters may have found themselves in this position before. What did you do to resolve this kind of problem?
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Extortion and the UGO Network?

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  • by Anonymous Coward
    At the minimum, it seems that UGO is telling all of its clients to go away. It's probably better to take the money that's being offered and go elsewhere, as if they lose all their clients then all the future money is gone.
  • by Anonymous Coward
    Phillip Morris and R.J. Reynolds kill every single pack

    McDonald's sues London Greenpeace for presenting the public with the facts

    Disney expands its international market with help from the CIA

    Coors uses consumer support to help finance the KKK

    Ending oil protests with executions Nigeria belongs to Shell

    Pepsi dealt with the oppressive regimes in the Phillipines to build another Taco Bell

    General Motos creates competition with their "whipsawing" tactics role

    Dupont alone is responsible for four percent of the ozone layer hole

  • by Anonymous Coward
    Don't know what the limit in your state is but it varies from state to state anywhere from $250 to $5000 per claim. If they pay you monthly, you can break up the total amount into seperate claims for each month. File them a couple of days apart so that they'll get assigned to different days for the hearings. Ugo will either have to send a lawyer to represent them (for a week or more) or risk a summary judgement against them for non-appearance. Your state then sends them a notice of finding (guilty, of course) and even if they go out of business, you're first in line to claim their assets under the bankrupty laws. (court judgements always get first claim to any forfetures.) Remember, they can't screw you, I mean, change the contract without your permission.
  • by Anonymous Coward
    Call their bluff. Do not sign anything. Send them notice via certified mail that they breached contract, and after 30 days, if you do not get resolution, notify them you are terminating it, and call a collection agency. That's the advice I gave to someone else in this boat, and it worked.
  • by Anonymous Coward
    Yup, I'm posting anonymously too because all of UGO's paperwork requiring webmaster signatures has some clause about not discussing any UGO-related business deals with anyone. I wonder why... I know a few types of 'businesses' that operate the same way, only they tend to do away with the paperwork altogeher...

    UGO's ad-based revenue stream got shafted like everyone else's. I can sympathize with this. I don't sympathize with their treatment of affiliates. I've read the types of things they try to force affiliates into signing and, truly, I think selling your soul to Satan leaves you with more freedom and legal recourse. And hey, it's Satan, you expect twisted evil plots to cheat you.

    I advise any UGO affiliates who think they are being screwed now to re-read their contracts a few times, and carefully ponder each clause, specifically regarding termination and payment. Then go take a few advil and lie down.

    Suing will probably cost you more than you stand to gain. Just remember, YAHOO (You Always Have Other Options). They are trying not to pay because they claim to have no money. However, things like this seem to suggest otherwise: y-ugo-networ ks

    Perhaps the affected parties could get together to file suit against UGO. IANAL.

  • by Anonymous Coward
    I'm amazed about the number of /.ers who recommend caving into this company's threat. "Oh, they have no money". Bullshit! They have at least enough money to pay their lawyers and their executives.

    Perhaps they should renegotiate their loans, their executive pay and their contracts. But merely screwing over their customers is not acceptable to me.
  • by Anonymous Coward
    From the information you present this is an illegal contract that cannot be enforced even if you sign it. In order for a contract to be enforceable, there must be an "Exchange for Value". In this case, UGO says that it will only pay past debt if you sign away your right to sue. What is UGO offering you in addition to the past debt owed you? If nothing, then this is simply extortion and an illegal contract. To be legal the contract must go something like this. You convey your right to sue UGO to UGO, in exchange UGO gives you "Consideration" (ie $$$ or something of value) plus the money owed. The formula would be; Conveyance+extra$$$=contract The past debt doesn't really figure in the contract b/c it is already yours. If UGO isn't paying you the past debt then they are in breach. By the way the transfer cannot be for a token amount like a dollar, more like at least a $100, though mileage may vary in your jurisdiction. You should get a current copy of the contract from UGO and consult a local attorney. For God's sakes, don't tell UGO any of the above. It is likely that you may be able to sign UGO's K, get the 2 months past due, and retain your right to sue. So then you can sue UGO as soon as the check clears;^} If you can't afford an attorney because UGO is in default to you, Call a local law school. Many run legal aid programs. Though you will end up with a wet behind the ears whippersnapper, he/she is usually backstopped by a professor who will know the issues at hand. Large company sc***ing a smallholder is the sort of scenario that gets law students excited.
  • by Anonymous Coward on Wednesday May 16, 2001 @08:51AM (#219330)
    I can't believe you're not considering filing suit. Take a close look at your current contract and contact a lawyer. Some of the websites were mentioned in the summary: HardOCP, ShackNews, BluesNews, VoodoExtreme, Telefragged, OldManMurray... Get these guys organized, start a lawsuit toghether, and squeee UGO where it hurts. I dont know what other debts they owe, but it seems they're trying to extort you guys in favor of "larger, more powerful" debt holders. If thats the case, as a group, you may be the largest debt holder. Do not give that up for free. You should be able to force UGO to trade the debt they owe you for equity in the company. Im sure the smart and savvy people running these websites could do a much better job of running UGO.

    so whatever you do, DO NOT SIGN ANYTHING LIMITING YOUR RIGHTS! This contract is written by their lawyers to do one thing.. !@#%!@#$ you over!

    GET ORGANIZED with the other large web sites, and put forward an organized front. UGO can bully you guys one at a time, but not if you all stand together.

    You're already looking at lost money from UGO, more is obviously on the horizon, so whatever they're trying to withhold now may be just the trickle before the dam breaks. Forget about actually getting paid in dollars.. they dont have any.

    If you go to trial, or seriously threaten such.. they will likey reconsider, and may try to work out a debt for equity swap were you get like 50 cents on the dollar. Remember, you are their customers.. since its through your web sites that they make money for ads. They can't alienate you to the extent that you pick up shop and leave.

    good luck
  • uhh . . . you're looking for sympathy because you were driving to fast, endangering the rest of our lives, hit someone, and got a ticket????


  • It has nothing to do with police procedurees.

    I believe that all 50 states require you to maintain a safe following distance, which is enough to stop your car in time no matter what the car in front of you did. Barring a sudden shoot backwards, I have yet to see any explanation of how you can hit the car in front of you while keeping this distance--it's a matter of definition . . .

    hawk, esq.

  • >What if he wasn't driving too was raining and some idiot
    > stopped in the road to turn without signaling

    If he couldn't stop in time when the car in front of him decellerated, he was following too close. Driving the same speed as the car in front of you while following too close is driving too fast.


  • So most drivers aren't driving safely--is that really a surprise? It still doesn't change the law.

    hawk, esq.

  • >I don't know if that's necessarily the case when someone speeds past
    >you on the right, and slams their vehicle into the space in front of
    >you when all of the traffic ahead is slowing down, forcing you to stab
    >your brakes hard.

    But that's not "the car in front of you." that you're hitting--it's a car from another lane, and the collision would be his fault.


  • by hawk ( 1151 ) <> on Wednesday May 16, 2001 @08:26AM (#219336) Journal
    I am a lawyer, but this is not legal advice. If you need legal advice, go pay for it.

    If you want a lawyer fool enough to take a contingency fee on a small amount against a dotcom . . .

    I once had someone come in expecting me to *defend* a wrongful death case on a contingency (How would that work? I pay a third of the judgment if he loses? :)

    And the one hurt on a motorcycle, expecting me to arrange for "my compensation."--the fool had run into the car in front of him (Unless the vehicle in front of you disabled its backup lights and suddenly went into reverse, the fact that you collided with it is conclusive evidence that you were following too close . . .)

    hawk, esq

  • Take the 1/2 of the 2 payments and then sue them in small claims court. Tell the judge that you signed the agreement not to sue under duress. Withholding money would definitely be considered duress.

    Small claims is easy to do yourself, if the amounts involved are not above the limit ($5000 most places, I think). Unfortunately, you may have trouble with jurisdiction if your agreement with UGO specified one that is not close to you.

    Once you get a judgement, you may have to go to the collections agents that others recommended.
  • by _14k4 ( 5085 ) <> on Wednesday May 16, 2001 @08:33AM (#219344)
    See, the thing is. Who knows if UGO even has the money for the last two payments. Going on past history, they're just stalling the lawsuits.


  • by tomblackwell ( 6196 ) on Wednesday May 16, 2001 @07:58AM (#219346) Homepage
    Many of these ad networks have business models that guarantee that they will eventually fail.

    If they are forced to go out of business, no amount of complaining, emailing or suing will get you cash.

    I'd chalk it up to experience and move on. You may use this as an opportunity to exit the web, as you may find (as your network did) that it's much harder to run at a profit than it was a year or two ago. Tough conclusion to reach, but it's better to reach it with a few bucks left in your pocket.
  • I don't think that cooperatives based on advertising only are going to suceed...the ad market has been drying up for a long time and still is.

    More likely to suceed would be a gaming site like this:

    - A co-op based on membership fees, where visitors to the site would pay like $5 a year

    - The co-op as a whole sells merchandise --
    computer parts and stuff of interest to gamers at good prices

    - Individual sites within the co-op provide real content and little duplication (i.e. don't need 5 cut-and-paste news sites). No vanity sites either (you know what I mean).

    - The sites within the coop are run by paid staff at a fixed (and reasonable, i.e. not enough to buy porsches and stuff).

    - a small amount may be made by the co-op by selling advertising.

    - excess revenue from hardware sales etc. is either distributed back to the membership (i.e. the people who visit the co-op sites) yearly or used to build the site.

    It'd be really, really hard to run such a thing without some big time corruption or someone getting in there to skim funds off. But it could work.
  • by Sangui5 ( 12317 ) on Wednesday May 16, 2001 @09:56AM (#219349)

    I don't know about any particullar ones, but you may even be able to find one that will pay you 2/3 or so the amount owed themselves, in exchange for selling the debt to them.

    That is, they will take on all of the risk that the debt won't be settled, and just pay you some fixed portion of it. Collection agencies have a huge absolute advantage on collecting on bad debt. A lot of times all it takes is a letter from the collection agency to convince somebody to pay up. They know about all of the legal options there are to getting your money (liens on property/future income, small claims, whatever), and can do it quickly and cheaply.

    If you don't think it's worth a lawyer, contact a collection agency. If nothing else, they should be able to tell you the likelyhood of collecting.

  • Step 2: The lawyer will probably tell you that given the financial state of UGO, you might as well take what you can get and learn a good lesson about what happens when you participate in a business maodel that is doomed to fail from the start.

    By the way, I'm a partner in a large website and we make a little bit of money from banner ads. But we recognized pretty early on that the whole banner ad business was smoke and mirrors and my partner and I decided that if we were going to have any revenues that we would depend on that they would have to come from somewhere else. Also, we've searched out the best deals on web hosting, even to the point of putting some of our repetitively viewed files on a non-bandwidth limited DSL connection. It works...we have no out of pocket expenses and when all is said and done, we even clear a few bucks at the end of the month.

    I think that if you look at the kinds of web sites that are flailing around in the banner ad crash, you'll see that they're often birds of a feather with little to differentiate themselves. And since their operators have hitched themselves to a (rapidly) falling star, they are faced with the fact that they are either going to go out of business, find a business model that works, or cease to be a "business" and turn back into what many of them used to be: a hobby.

    There's not a lot of difference between the tightening of the high-tech industry and the demise of web site after web site. Those that are unsteady to begin with are going to go away and the industry is going to consolidate into a few successful businesses and many "successful" hobbies. And guess what? There's nothing wrong with that! It's the way that capitalism works.


  • by WorLord ( 16143 ) on Wednesday May 16, 2001 @11:00AM (#219355) Homepage
    I used to work for UGO about 3 years ago (or so) as the "Affiliate Manager". (This was back in the day before Joe Robinson and his cronies in New York acquired UGO). In fact, I left that job *because* of the acquisition - after moving to San Francisco (one of the first places on earth I would want to live) only six months prior for the express reason of working for UGO, there was no way in hell I was going to haul my butt over to New York (probably the last place on *earth* I will ever want to live) to work with that pack of wolves.

    All I can say is that the "NY suits," - as we called them back then - were as ruthless and morally depraved back then as they seem to be now. They had a history of having the "Inverse Midas-Touch" curse: everything (and everyONE) they've touched, before and after the aquisition, has turned to crap. Their business plans for the future of UGO (which *used* to stand for "Unified Gamers Online", BTW) could easily be summarized as "throw money at it until it becomes profitable, and milk the affiliates for all they are worth before giving them the finger." Once UGO was purchased (at an unbelievable profit to the original owner), the people on Park Ave. managed to run what was once a dedicated online gaming resource for the People(TM) into the ground by A) Firing any and all people who were associated with the "Old Regime," B) spreading out to other, unrelated forms of entertainment, and C) hiring third-rate porn writers to be primary writers and editors.

    They have a legal team seemingly funded from on high by the Prince of Darkness Himself, as is evidenced by exactly how badly and often they've screwed over employees, affiliates, and anyone else who's had the unfortunate foresight to get involved with them on any level. In fact, I've seen roughly 30 people that I personally know (or knew) get trampled by them monetarily speaking, and nothing has ever happened to them to balance the scales. Any ex-affiliate or ex-employee of UGO that doesn't speak badly about them was probably paid an unusually high bonus for their silence (and I speak from personal experience on that, but screw 'em: if they wanted my _continued_ silence, I'd still be getting checks.)

    If I were you, I would take the last two months pay and jet. My experience with the (many) other situations of this kind dealing with UGO would strongly suggest that a legal battle with them will be nothing short of a waste of your time and a massive drain on your resources. The only way you'll actually get something out of it is to take whatever money they're offering and wash your hands of it. It may not be the most honorable way of handling the situation, but in this case, I'd bet a week's pay that taking the honorable road will earn you starvation (if this web site is your only source of income).

  • Just tell them you will drop them.
    The reasoning is three fold.

    1. They are fearful you will sue. While it's not practical that has not entered the logic. So they'll be conserned that you will sue for moneys owed and they lose you.

    2. Something stinks. A sign of bad things. Cut the loss now instead of later when it'll be worse.

    3. If they think they need this then if you stick around you may find your survival depends on the rights they are now asking you to sign away.
    It is unlikely you'll need those rights normally but when someone asks you to forfit them then chances are really good you'll need em really soon.

    Lawsutes are impractical.
    So drop them.. If they cave then stay if they don't sticking around is probably not a very healthy thing to do.

    I'd like to add. In todays banner ad market I'm supprised more websites don't folow Slashdot's example and set up a banner ad server like AdFu..

    Ad services were nice. Someone RELIABLE dose all the hard work and you generate the traffic. It WAS a good healthy relationship. But things went bad. Unreliable services came up and no-so-savy people would buy out successful services.
    Eventually everyone would cave to pressuers and go the dishonnest route.

    There are some honnest guys left. They'll die off or get take over. The ecconomy is bad. The middle men won't survive. Just cut them out and stay afloat.
  • This needs a much higher score then +1... I will shamelessly burn karma to get it noticed.
  • What they are saying is, basically, we're broke, we can pay you all 2 more checks, and call it even, or we'll just withhold it all and you can take us to court.

    You can't get blood from a stone.

  • Sounds to me like UGO wouldn't be able to pay you even if they wanted to fulfill their obligations, because of cash-flow problems. My advice is to talk to a lawyer to figure out what you can realistically get from them, then cut your losses and move your website somewhere else.

  • You can sue 'em until the cows come home, but if they don't have any money, there really isn't much point.

    I guess you might get some priority treatment when they go through bankruptcy, but its not like they are going to have any assets that are worth anything anyway.

    Save your time and money and cosider it a (painfull) lesson learned.
  • by Funky Jester ( 24420 ) on Wednesday May 16, 2001 @08:00AM (#219363)
    publicize it on Slashdot! That'll show 'em.

    Oh, wait...
  • by Stepto ( 25864 ) on Wednesday May 16, 2001 @08:43AM (#219364) Homepage
    The days of getting paid 6 figures a year (or even five) for cutting and pasting news, or using the words "pimpdaddy smackdown" on your website is way over. It's a wonder UGO lasted as long as they did. Those who are smart, like OMM, saw the writing on the wall and made contingency plans.

    God knows what someone like Blue is going to do. Of all the sites, his is the most useful gaming cut and paste site on the net.

    The problem has been, and will continue to be, the cost of bandwidth. Serving out 100k hits a day or greater just costs way too much money for an independent person to deal with unless they are independently wealthy. One good /.'ing of your site, and your in hock to you ISP for thousands of dollars if you are running sko more cost effective co-lo. This makes networks like UGO sort of a required thing.

    But networks can't exist on ad banner money alone, and users expect the web to either be free or, failing that, MASSIVE bang for the buck.

    I still maintain that the furure of these networks is to offer massive content at a yearly subscription rate, paying affiliates by continuing to use ad banners. How would it work? Like this. Say an ad banner network, GAN, has 50 affiliates. They offer full access to all 50 affiliates for 9.95 a year. (here's the massive content/bang for the buck part) Now since the network cant survive on that alone and pay their affiliates, they also offer one single ad banner on their affiliate sites (at a rate much lower than has been done previously) and they pay their affiliates that way.

    For those who say "no fucking way I'm paying a yearly subscription and still put up with ad banners", well that's how magazines work. You pay your 4.95 for newsweek or "out" magazine AND LO AND BEHOLD! The mag ALSO has advertisements. And newspapers work the same way. And fucking paying for cable TV doesnt stop the commercials. Jesus, they even play commercials in front of movies in the theater now. Buck up and get with the fucking program hippie. The web isnt any different.

    Will Blue (or even the /. guys) continue to make a living this way? Probably not, he'll have to get a day job or start selling original content. But at least the sites will continue for those who want to run it as a hobby, and they wont have to worry about bandwidth costs.

    To think that anyone could make a living, or even deserve to, simply posting links readers send in is a little ludicrous. And yeah I understand the irony that that is exactly how /. works.


  • I wonder if the contract says that he gives up all rights to Sue them, or just to sew them over this issue.

    If they do have the money it would be an interesting (don't know the legality) tactic to allow them to later change the rules of the service or what-not, and point to this contracts "no sue" clause as protection.

    Yet one more reason a lawyer should be involved on your side. (and you should think of a different group to do buisness with).
  • Probably the same thing you just did. Wave those last two checks (at 1/2 value, which is more or less 1 check) goodbye, and post an anonymous story about it to Slashdot and other places to exact a satisfactory revenge for being cheated out of money.
  • While I can understand your frustration, this is NOT extortion. For what it's worth, it is called a settlement. They are offering to compromise debts for lesser amounts. Welcome to business 101. Forget the attorney, he'll probably just cost you money.

    No, you could always wait 'till they file bankruptcy, and then wait, as an UNSECURED CREDITOR, to see how much is left over to pay the debt to you. What, you've never had a customer file for bankruptcy before?! This is just the beginning!
  • My point is -- Cash is King. If you get cash now, on demand, it is better than being owed that money, and certainly better than owning part of nothing.

    There is nothing wrong with taking equity, but you are, in effect, doing what wall street is unwilling to do... give these people capital. I sure wouldn't bet a plug nickel on these folks. Don't like their business plan or the business acumen. So telling someone to take stock is a bad play.

    Obviously, if this company will survive, that is a different story. If they will live to fight another round of investment, again, different story. However investment is hard to come by, and their business plan is easily bypassed.

    Why should a valid creditor take less than he is owed? Because bankruptcy court could give him decidedly less, and then he pays a lawyer to boot. All a judgment on how likely it is this company survives. Don't know the company well myself. Seems like just another dot com with a spurious business plan.

    Better question, why is anyone still doing business with them?! Why not shift the contracts off to other vendors? No one is paying these prices these days. Still, do business with someone else, even at the lower prices, as these people can't be trusted to live up to contracts. Oh, and the punch line. When a traded company starts cutting deals like this, you really need to start watching the exits!
  • by macdaddy ( 38372 )
    At the very least, you and all the other webmasters involved should file formal complaints with the Better Business Bureau. I've done that before. Once it went far enough for me to get my $$. The other times I convinced enough other victims to also file and the business went under some sort of audit. Worked well. Check with your local office for details.


  • If the contract was terminated and the only question was whether to accept partial payment or fight for more, your analysis is reasonable.

    But as I read the question, this guy is being asked to accept a unilateral, retroactive change to an existing *and ongoing* contract. If his company agrees, what's next? They'll have no grounds to complain when the company retroactively cuts payments in half again in 6 months, then again, then yet again. Having gotten away with it once, why on earth wouldn't the company try the same trick again?

    Worse, by accepting this it's possible that his company is setting itself up for a lawsuit for "breech of contract" once it decides that enough is enough and tries to yank the ads before the end of the contract. Right now, it's likely that the other company has breeched the contract and his employer can yank the ads without risk. (The details, as always, are in the contract.) Once they've demonstrated a willingness to honor the contract despite non-payment, they might lose the right to consider non-payment a material breech in the future.

    IANAL, and I'll be the first to admit that this is one of those cases where you need to bring one in. Not to tell you what assholes the other guys are, but to tell you what you need to do to keep your options open in the future.

    P.S., if we are talking about an ongoing contract, the money at question isn't just the late payments. It's also half of every payment through the end of the contract. A lawyer might be able to make a good case that *this* is amount of money in question in any suit, plus treble damages for breech of contract.
  • by Sogol ( 43574 ) on Wednesday May 16, 2001 @08:17AM (#219381) Journal
    UGO obviously anticipate a class action and are trying to limit the number of class members with the waiver. You could wait and see if anyone else initiates a class action suit, and then become a class member for little or no legal expense. Here [] is the general idea of how this works. Here [] is a bunch of BS ,about how rich UGO will be by 2001 ;)
  • No kidding. I find it odd that a large portion of the crowd didn't see that immediately.
  • I am anything but a lawyer, and my solution is potentially libelous, but it a solution that protesters, Unions and consumers employ to publicly shame a contract-violator.

    I say, abandon any hope of payment from UGO, and replace all the UGO ads in your ad rotation with lemon-ads, saying things like:

    "I got screwed out of my ad contract with UGO"
    "UGO is doomed to go out of buisness in a few months, so don't even bother visiting their site"
    or just
    "UGO Sucks"

    Remember, if you buy a car from a dealership, and it's a piece of crap, you have every right to park your car in front of the dealership with a big sign that says "I bought this car from xxx dealers, and IT SUCKS".

    If I'm in a union, and my employeer violates my contract, the union has a right to strike and protest out front of the business with signs like "Marriot Hotel is Unfair and Violates the Contract".
  • by heiho1 ( 63352 ) on Wednesday May 16, 2001 @08:19AM (#219390)
    I worked for a company which was a subsidiary [of sorts] of UGO. Well, after working for them for a while, I gave them a month or so of notice. A day or so before I left, I received this threatening letter basically saying that I agreed never to say anything negative about UGO and gave up my rights to sue them for practically any reason and that I agreed to pay any bills which they might have outstanding for me. Well...(@#*&#$ that! I basically told them that there was no way I was going to sign over my constitutionally protected right to state my opinion about them nor was I going to sign a blanket statement agreeing to pay for possible money their accounting department might decide that I owed them. I told them they could send me an itemized list of dues that I owed them and I would discuss those items with my accountant and that if they had some desire to sue me, they could notify my lawyer of their intent. I also told them that all further such correspondence should be sent via email rather than fax [as in, I don't have a fax!]. Their HR department tried to reach me by phone after that [to assure me the contract was harmless of course :-?]. After that sort of draconian gag attempt, I'll never deal with them again...
  • One of the reasons I've never bothered with ads on my sites is because one of a few reasons. 1) I feel its whoring myself, and a site shouldn't have to place ads on their site if their content is good (I push 2-4mill hits a month at times 700k-1mill unique) 2) Don't want ads which aren't themed in accordance to my content 3) companies are crooks.

    So let me elaborate on number 3 since it may offend many people who do place ads. Trying to find a surefire method of advertising in these economic times are murder. With so many companies getting tossed, its only a matter of time before most of those "place a banner get paid companies" become completely extinct.

    Their business models are often far fetched, marketed with obscurely written hidden agendas to those posting the ads, and there is really no legal measures you can take to defend yourself.

    So lets see you place a banner from a company promising x amount of dollars per x amount of hits. Which means unless your pushing mega traffic its usually worthless to the average site. So you now believe you should take them to court, and now have to evaluate the math by doing that. Court costs for instances like this would be astronomical and often cost you more than you would get in return, not to mention drag on for years before you even get anything, PROVIDED, PROVIDED, that the company doesn't go under...

    Wow thats a lot to expect to look forward to when dealing with these companies. Maybe some sites should promote advertising to companies on their own. Provide statistical information for their sites, via methods of logging, then promote the sites on their own. You cut out the middle man and the creating of your own banner generating script is not that hard.

    Anyways I stay away from all that crap...
  • Understandable that many sites would need to pay for hosting, but this is something that should be thought of beforehand by the webmasters. My own site is a hobbyish site, and personally I would rather pay for my own (even though I have free hosting via a good friend []) then pimp out with banners only to get shafted down the road.

    Its one thing to create a site for your own purposes, then expect others to save your ass via way of advice on how to make money. As I stated if your content is that good, let the stats speak for themselves, post your stats, create your own terms for advertising for companies to look at, and I'm sure somewhere down the line you'll get play.

    Listen, I get propositioned by companies involved in the security biz sometimes, and I decline most of their offers since they seem quirky. Show me the money, then we'll talk. If someone is dumb enough to fall for a takl for us, and we'll pay you later deal, then they deserve it. Rule number one in business there are no freebies, and no one is your friend. Once you learn to master that rule you'll be successful with all of the others.

  • My site doesn't charge anything since I don't expect anyone to "feed me." Good content for a site should be expected in order for a site to provide some banner ads to those who WANT to advertise on a site to make money. Some of these sites flat out suck (mines included) but that doesn't mean they can't make money on it. Provide strong content to keep stats up then provide advertising rates on your own, or as stated if you have good content your liable to get companies involved with the core of your content to want to pay you to advertise.

    How many sites have you been to which target a specific kind of information, often have banner ads of odd companies (away from the sites core content) in rotation. By creating good enough content, keeping stats going a site would be able to determine how to get revenue whether its by banner advertising or product reviews, etc. Its really not that hard, most people are too fscking lazy and want everything handed to them on silver platters, and think by signing up with some "post a banner make some money" scheme is going to pay for the site which is ALWAYS and I repeat ALWAYS going to be a false assumption. The only person who'll win at that game is the company who suckered others into signing on with them, because they in turn, go back to possible clients with stats. Stats that I stated, if good enough should speak for themselves, and generate revenue for those who are smart enough to get their heads out of their asses and make their own rules for their own site.

    As for me I don't need money to run my site. Its freely hosted by means only known to us involved with it, and what's the kicker about it, is we get a lot of attention for ourselves in our targeted market, so we get a lot of queries from companies questioning about services we may speak about, so we get to network with others for money, or we often get contract work via the site.

    So as I said I'm fine running with my site the way it is, I think for the most part I provide semi good information, I keep people laughing while making them aware of certain situations, they would otherwise not hear of, and many people can take a quick look around and see we're not stupid when we're serious about something. We may act the stupid role, but most of us involved on my site have 7 years plus Unix administration, Network Engineering (CCNA), Security administration skills under our belts and make decent money, and can afford to keep it banner free.

  • As pointed out in this comment [], UGO is not really as broke as it likes to have its affiliates believe. Or maybe it's the other way round: its "management team is not as highly adept at both managing cash and generating revenue" as it likes to have its prospective investors believe. Sorry, can't have it both ways. This is spelled FRAUD.

    If you are an affiliate and want your money (all of your money...), you may want to have a closer look at this comment [] and remind the officers of the company that their conduct may expose them to personal liability.

  • I would avoid signing anything without representation. If this was really sent to all of their customers, many who will be small, or like you unable/unwilling to go to court, organize. Contact a lawyer, explain the situation, and see if they are willing to contact others on behalf of some combination suit.

    Most important, I would avoid taking any legal advice from here. Even if I was a lawyer (I am not), nothing says I am a good one or even know what I am talking about.

  • Perhaps you'd like to consider submitting a claim to The Commercial Lawyer's Network [], a commercial collection agency that has attorneys on staff.

    I got burned for a few weeks pay by a consulting client last year and they never answered my attorney's attempts to collect so I referred them to ComLawNet.

    Try their handy online claim submission form []. You will need to agree to their agreement [].

    They seem to have a certain... familiarity... with dot-coms.

    Read their FAQ []. Note that they emphasize your chances of collecting are much greater the earlier the debt is placed into collections.

    I'm still waiting for my money but I only placed them into collections a couple weeks ago.

    Mike []

  • by King_TJ ( 85913 ) on Wednesday May 16, 2001 @07:59AM (#219404) Journal
    It sounds to me like they're basically saying "We'd like to offer you two choices. Either take these last 2 payments we owe you and call it a done deal, or fight with us in court about it." They're betting you don't want to bother with the court battle.

    It's completely up to you. You'd have a good case, except you can't get money from someone who has none. Go talk to an attorney who can investigate this place and find out if a suit is worthwhile. I don't think any Slashdot readers can give you better information than that, unless maybe they work for the place themselves.
  • If they go bankrupt, and their is equipment is sold, the following happens:

    1. The government takes any money it's owed (taxes).
    2. People with SECURED debts take their money.
    3. People with UNSECURED debts take their money. (This guys debts are almost certainly unsecured)

    IANAL, but I just took a short course on business finance - we were told that when companies go under, people with unsecured debts tend to get around a penny in the pound back.

  • Yes. Most of those people are thus following too closely.

    I don't know how many times I've been driving at a 2 second distance and some idiot will cut in on me. Sometimes (like on city streets) that 2 seconds is barely enough room for his vehicle. And they'll cut in without signalling. Leaving both of us with less than 1 second of distance.

    That's the cause of most of my road rage...idiocy on the part of other drivers. People like that shouldn't even be on the road. They're endangering everyone.

    I have zero tolerance for zero-tolerance policies.

  • IANAL either, but a release is a very common document in which someone waives their right to sue for one reason or another.

    To be a binding contract, however, something of value must be given in return for this release - in this case, it's the two months worth of payments that are already due to the website.

    That doesn't sound like substantial value at all, so as a contract, this sounds fishy. It would certainly make sense to go court and try to get an injunction against UGO to stop this nonsense. Saying that you've got two months worth of dues that you haven't paid yet, then saying that you'll only pay them to those sites that waive their right to sue for what should rightfully be theirs anyway doesn't sound right.

  • A lot of this depends on what the contract is committing you to. As long as you're not in some sort of exclusive relationship with UGO, I'd sign the contract, get whatever I could out of UGO, and then ditch them.

    If you are on some sort of exclusive deal, refuse the money and the contract and ditch UGO immediately for being in breach of contract.
  • by Martin S. ( 98249 ) <Martin.Spamer@ g m a i> on Wednesday May 16, 2001 @09:56AM (#219413) Homepage Journal

    IANAL but IMHO the best way to handle this is reject the settlement, find a new sponsor/advertiser and factor the debt to an expert recovery company. These will Charge you about 12% off the top.

  • The interesting thing about trickle down economics is it's a two way street. The root of the problem is UGO isn't getting paid, so they aren't paying anyone else. You're basically between a rock and a hardplace on the issue. If they go belly up, which it sounds like they will anyway, game over. Even with the rewriting of the bankruptcy laws, it only ensures Large Companies can collect from Joe Public, not the other way around.

    The larger issue at hand is the total collapse of Banner Marketing. Click Through is too low, too many Dot Coms are going under and not paying the ad companies. Good sites get screwed over. The use of banner ads were a neat way for a grass roots site to start and actually break ever (or make a profit.) Until that point you had to depend on a getting venture capital and a marketing department.

    I feel bad for all parties concerned, but UGO is a dead end street. I doubt any lawyer would take it on contingency.

    The best route to go is to replace the ad revenue and quick. In house, a different network, co-op deals with online retailers.
  • I want you to come work for me. If you don't mind me not paying you for 4 months and then just jump on board when I demand you sign a contract after the fact absolving me of having to pay you any further money then you are the perfect employee.

    Bottom line is that the company signed into a binding contract and they SHOULD NOT be let out of that contract. If you can't do business the way you promised you shouldn't do business at all. Stealing services from someone else is wrong and should be procecuted.

    The unfortunate bit in all of this is even if you win the lawsuit the chances of you getting any money are slim because it sounds like the company doesn't have any. I'd say sue them (nearly any lawyer should be able to win this case for you if the facts are as clear cut as you say though IANAL) and find a different means for revenue on your site.

  • by Animats ( 122034 ) on Wednesday May 16, 2001 @08:46AM (#219434) Homepage
    Dun and Bradstreet [] operates a commercial collection service, for collecting from deadbeat companies. They charge about 20-25% of the amount recovered. For big-dollar amounts, that's negotiable. They're the biggest company that does this. Since they're also a credit rating firm, they have real clout.

    Even if your creditor goes bankrupt, you'll probably collect something. And you may be able to force them into bankruptcy before they totally run out of cash, so it's better to start sooner rather than later.

    As a rule of thumb, never let a commercial creditor get more than 60 days behind. The probability of payment declines rapidly after that point.

  • If anything these these sites need to band together to put a stop to the abuse foisted upon them.

    Or do what I've been suggesting for months now: band together and start their own ad network, under their own control.

  • Your Honor, my client could never have commited the murders of which he is accused. My client is a peaceful man. He loves families and children, like, for example, your children, who currently go to school at 123 Maple Street.... Ladies and Gentlemen of the Jury, as you know, I cannot legally offer you large cash kickbacks in exchange for finding my client innocent. However, I'd like you all to take a moment to address the stamped, sealed envelopes to yourselves....
  • Mozilla (and therefore NS6.x) has the ability to supress popups as well. I don't think there is a UI to set this option, but you can edit the prefs.js to enable it.
  • by DrXym ( 126579 ) on Wednesday May 16, 2001 @09:19AM (#219441)
    I suspect the bottom has fallen out of the advertising business because people have conditioned themselves to see everthing on the page except the adverts. I know I have. I look above, below and either side of but the not *at* the advert.

    That could be why an increasing (and increasingly desperate) number of sites have taken to displaying popup windows instead. Unluckily for them people will ignore these too and become alienated from the site in the process. I already unconciously close popups before they've even finished loading.

  • . .

    I live in the UK.

    Been there, done that.

    Six months to a central London hearing during which time assets stripped.

    Unless, that is you can file in the High Court, apply for an Interlocutory (preliminary) Injunction for freeze of assets bason on previous form.

    Any amount >750 GBP does the job here, but you _have_ to avoid the small claims process.

    Also, take note, if these guys are skulduggerous (man, I like that word and haven't used it much ;-) they'll find a counterclaim, apply to court to have the cases combined (which in one case I've worked with so confused the Plaintiff that she - and I say here I say this only after the fact - allowed a settlement to be made citing the *wrong* counterparty, making enforcement very difficult) and then, under Fast Track rules, you'll be forced to do twice the work to attack the core issues, as it complicates the issue before the Magistrates or Judges or whoever on account the opportunity offered under the counterclaim to besmirch you as well.

    Also, there is the overriding concept in UK law of "Balance Convenience" whereunder you will have to prove that a bankruptcy order is *the only* way to recover your monies. Otherwise a simple order will be made for payment. Then you have to wait six months before you can get a Sherrifs Order to send out Bailiffs.

    Believe you me, find other ways if you can to get your dues. See my other post. - John

  • If a contract is presented as non - negotiable and is purely one - sided it will fall, in both the UK and USA under Adherence Contract rules.

    You may then strike out under Statutory Provisions any clause which is "unfair" without varying any other right.

    Allowed our company to tell any number of a%%hole cell / isp companies to go ram when they "fixed" the terms suddenly.

    For more reading, go look up Law of Equity in the library, I'm not saying Google will have much, even allowing my audience :) - John

  • by new500 ( 128819 ) on Wednesday May 16, 2001 @10:12AM (#219445) Journal
    I have to disagree.

    By induction, if they are offering a very one sided contract it is becasue they want to stay in business.

    If they cannot _ unless you sign, then they have problems you can make painful for them, see my other post.

    So if they are planning to be able to stay in business, they can in due course pay you. Just - apparently (though I don't trust this without further information) - not now.

    You may personally feel it is not their fault. But the law offers people who start a business a limitation of personal liability, privided you follow the rules (also see my post above) in return for the responsibility those rules and other aspects of the law convey upon them.

    I have studied many systems in collapse, from social, psychological and quanitive persectives. What we *need* in this world of capitalism is a sense of pay - back for those who enter into business frivolously or without honour. You may disagree with my ancient point of view, but to "blame the system" is a cop - out, and more people, good bad, indifferent as well as intentionally fraudulent will just be encouraged to try their hand without any conscience about the matter if we all exonerate every failure that tries to screw upon their *customers* the minute they encounter a little trouble. Damn it, I have to go home now, but I _really_ wished I had the time here to rant from the perspective my several very painful (financially, emotionally and every which way) experiences with sharp operators in business. - John.

    p.s. my company trades advertising contracts in Europe, if your site is interested in non - exclusive agreements for wholesale onward sales, contact me intially via my spam account above. We have a good legal team, too.

  • by new500 ( 128819 ) on Wednesday May 16, 2001 @09:43AM (#219446) Journal

    . .

    IANAL, but I handle all our company's contracts in the UK and USA.

    Look carefully at the pattern of earnings and balance sheet reporting that UGO has made during recent fiscal periods.

    This may not be formally reported or up to date. In the UK there is Comapnies House, to which Directors (but, interestingly, not the companies) are obliged to file annual accounts and shareholder information).

    In the USA you will have to look at individual State Registrars, unless UGO is under SEC rules to file federally because of number of shareholders, public offers or listings.

    Get *every* piece of detail you can about the INDIVIDUALS who run the business.

    Companies in common law, USA and UK are Legal Persons, intentionally separated from their officers, in both countries (in the UK Companies Act, and once again your local state law) there is the concept of PERSONAL LIABILITY of officers and directors in the event they operate the company KNOWING IT CANNOT FINANCIALLY SURVIVE.

    This *is* a complex affair.

    But you may be in a position to apply pressure to obtain needed severances from contracts, so that you can do business elsewhere.

    Or you may want to try to negotiate a settlement from any cash reserves still remaining.

    You may yet be a creditor in the event UGO becomes insolvent or files Chapter 11.

    I know you said a lawsuit may be futile. I am not advising on that (though these steps would be prepared by a good forensic accountant's legal team) but I *am* suggesting you get what info you can to apply LEVERAGE upon the officers, directors or whoever is responsible.

    If you feel you can follow these steps and also read your local legal codes, _and_ provided you treat this in a resonably detached manner (I learned many skills years ago when such an investigation became a personally charged affair because my business was very hurt, but I still don't recommend the vendetta, you're smart enough to see the reasons for that) then you can at the very least feel as if your own intelligence can apply to the awful and unpleasant situation you are in. This aspect alone, for anyone bright enough to have managed their own business, gives a certain amount of better sleep and can reduce personal bitterness and sense of hopelessness. In fact many fraudsters OPERATEON THE BASIS that it is a common perception that legal recourse is hopeless. Legal recourse does not mean you have to go to court. The vast majority of serious cases are settled between big companies.

    If you find a basis for argument that the directors or officers of the company have operated and ENCOURAGED NEW BUSINESS in the knowledge that their financial models are unsustainable, and / or they are broke, they may fall foul of insolvency rules, and in the UK I can say for certain I would immediately file suit for fraud against the INDIVIDUALS THEMSELVES. In the UK companies law makes it a CRIMINAL offence to operate a company when you know it can't meet its bills. Check your local State Codes for the equivalents WHERE THE COMPANY IS DOMICILED AND OR LOCATED...

    Finally, for this post at least, WRITE UP what you find, quoting law and precendence wherever you can, and copy it to officers _home_ addresses, circulate to investors and advisors (who may also legally be culpable in some circumstances) and think seriously about putting a release across PRWire or another news service which gets picked up by the mainstream press. If the likelihood of fraud is widespread, and key officers of UGO have personal assets, you may find a specialist attorney calling you offering a deal to pursue in return for a reasonable commission. In other words, get in position to have your pound of flesh back, _as well as_ what is already legally due to you, and you may suddenly find yourself treated *much* more fairly.

    I could comment further on contract law, too. But if you want to ask me anything write my spam account above with a very clear header, and I'll write back from my main a/c with some further pointers when I'm in less of a hurry. (only pointers, mind).

    Whatever you do, my very best luck to you. - John

  • Actually, if there are terms with the UGO that prohibits posting, it may not be valid.

    Many states have an anti-SLAPP statute.

  • SLAPP is Strategic Lawsuit Against Public Participation. It's a lawsuit not designed to win, but to just shut someone/some-group up. An example is fighting a zoning change for a waste processing plant, and the company files a lawsuit for intentional interference and slander. Another one is is Mattel's libel case [] against me.

    For more information on SLAPP and anti-SLAPP [] you can go to [].

  • That's why I said to check issues on individual liability.

    Many times, if a company goes under, the people in charge grab money for themselves -- so if you can piece the corporate veil, it's yours. Many companies have insurance that covers bad acts by management, if you can get that, you avoid issues of bankruptcy.

  • by ( 142825 ) on Wednesday May 16, 2001 @09:35AM (#219453) Homepage
    Sit and talk with a lawyer. But, some thoughts to keep in mind:
    • See if the individuals who run it can be held liable
    • R.I.C.O (civil) - This could be considered a conspiracy to defraud.
    • Unfair and deceptive business practices. This in some states can get attorney fees and multiple damages.
  • Waitasec... They can't even afford to pay their own affiliates!!! How the hell are they supposed to have the money to buy another company?!!?!?! Look here for more info on the vile UGO network. []
  • by jayhawk88 ( 160512 ) <> on Wednesday May 16, 2001 @08:16AM (#219462)
    Dear Anonymous Coward,

    Sometimes, in real life, people are confronted with situations where they don't know what to do. In such situations, they generally seek out the advice of their peers and colleagues, people that perhaps have been in similar situations, before making a decision that could possibly affect the rest of their lives. It's called getting as much information as possible, and doing everything within their power to make an informed, wise decision.

    I know this is probably difficult for you to comprehend, since you were apparently born with the sum total of all human knowledge, but try to understand that this is very helpful for the rest of us.
  • ...and I don't live in USA...

    ...but I'd normally file a bankrupcy (they owe me money, I can prove it, they don't pay it, last I checked that ment they are bankrupt) and ask the court to immidiatly seize funds and/or assets to cover the money owned so all is not lost, even a usually has something worthwhile.

    Besides, that usually provokes some rapid action from the counterpart, unless they're really going bankrupt, in which case you'll probably lose the money anyway, so the earlier you try, the more likely there'll actually be something to get.

  • The pretty corporate pictures are here: exec.asp

    The contact infomation is here: contact .asp

    with telephone, fax, and email.

    Someone may want to save the data someplace, just in case. These guys sound a bit unpleasant, but I'm sure they are fine at a party.

    [right ...]

    Check out the Vinny the Vampire [] comic strip

  • If this is true you are unlikely to get any money whether you sign the letter or not. If you sign the letter and they do not pay - they've broken the contract and you have the right to sue them again. If they don't go bankrupt (meaning there is still somebody to sue), you may get punitive damages because they used the letters as a fraudulent tactic to allow them time to reorganize (Chapter 11 is what they are supposed to use if they need protection from creditors so that they can reorganize).

    I still see no disadvantage to signing the letter since I don't see how anyone is going to realize the full amount owed.

  • by Wavicle ( 181176 ) on Wednesday May 16, 2001 @08:27AM (#219472)
    I don't see why so many people on slashdot not in this situation are sue happy. Perhaps because the advice here is usually worth the amount you pay for it? The lawsuit angle is unlikely to get you any more money than just signing the paper, taking the money they will give you and going elsewhere.

    I agree with what the previous poster said. Take the money and run - lawsuits take time and energy and one against a failing company may yield little more than a micro-thin slice of the bankruptcy settlement.

    Depending on your financial situation, you may be able to write off the other half of the money as a loss or bad debt allowing you to recover 25% or more of it in reduced tax obligation.

  • by Wavicle ( 181176 ) on Wednesday May 16, 2001 @08:40AM (#219473)
    The problem here is that lawyers cost money - a minimum of 1/3 the settlement amount.

    The best advice I think is to take the 1/2 and write off the rest as a bad debt / business loss. You'll likely end up with a minimum of 62.5% of the total money owed (depending on your tax situation you could get more). If you go the lawyer route, you will get no more than 66.7% of the amount owed.

    Is the 4.2% extra you get worth the lawsuit? Especially considering the amount of work you will have to put in and time you will have to wait? And considering the risk that if the company goes belly-up before your case is settled you will probably get nothing...

  • While I'd idealistically wish that you could nail them to the wall, as many others have pointed out, you're SOL if they go bankrupt. Add to that your legal fees and it just isn't a winning proposition, especially if 2 months payment isn't all that much money in the long run.

    However, provided you're willing to consider legal action, you might be able to get away with having your cake and eating it too, by signing the contract and then arguing that the contract was valid. In addition to the obvious extortion, it's my understanding that, to be valid, a contract must provide consideration to both parties.

    The example I recall from my business law class involved a rich uncle signing a contract with his nephew, where his nephew agreed not to engage in various illegal behavior and the uncle would provide the nephew with a bunch of money after a set amount of time. Because the behavior of the nephew fit within what he was already required to do by law, he wasn't really doing anything for his part of the contract. As such, the contract was declared void. Since UGO is already contractually obligated to pay you this money, they aren't providing you with any considerations in this contract. Of course, this would be contingent on the details on the contract (for example, it might provide some small additional benefit to you that wasn't mentioned in the summary, thus negating this whole argument). All in all, the obvious IANAL disclaimers apply, but it might be something worth thinking about and asking a lawyer about.

  • If such a fanciful thing ever did happen, it would make hour-long traffic jams into day-long traffic jams.

    Not necessarily. Traffic often behaves in non-intuitive ways--there are cases where traffic patterns in major cities have been improved by closing streets.

    I usually do a good job of maintaing "Assured Clear Distance" even during rush hour, and I never get people honking at me or glaring. What I do get, however, is a few waves from people who have been desperately waiting for a chance to switch lanes.

  • I already unconciously close popups before they've even finished loading.
    Same here. As far as I'm concerned popup=ad and I close them as soon as the window is created. I occassionally miss useful stuff because of this, so note to web developers: don't put real stuff in popups. And also don't open new windows for me: I'm quite capable of using the browser command to that if I want it.
  • I was in the same boat and signed the contract just because I _needed_ the money for backdue hosting bills.

    However, the contract is pretty weak and could be voided in a class action. Question is where else to go? I dont know of any place else to go for ad outsourcing. As much as we all hate it we need to make some money just to pay for the basics of our sites. Free hosting just doesnt offer enough (ie MySQL, specific Apache changes, etc, etc, etc) and hosting and bandwidth arent cheap.

    Before we all leap off the cliff and sue them into non-existance maybe we should have somewhere to land....

    There was an article on here awhile back about improved advertising. Dont suppose anyone's done anything with it or thought about forming a co-op for sites too big to be on free hosting and too small to afford our own ad sales staff?
    Anyone interested in such a thing? How'd we go about getting startup capital in the current market?
    I suppose it'd be a bit much to get OSDN to sponsor the co-op...

  • The time of making money from banner ads is not over. I make a good living off of the banner ads that are placed on my technical website. I'm going to have to raise prices because demand is so high. And all I have on my website is free information, I don't sell anything (other than banner ads!). I spend my time preparing content for a new technical website that I'm creating and that I expect will be even more successful and generate more income than my current site... and so it goes--and all based on banner ad revenue. I love being self-employed!

    What probably is over is entire companies being supported by the ad revenues from their websites. I make a nice living off my website. The site wouldn't, however, be able to support an entire company.

    I charge a "per view" (CPM) rate less than Yahoo even though, being a focused technical site, I would be warranted in charging four times what I do. But everything I charge is for me; I don't have to share the proceeds with anyone. This means I can give my advertisers an incredibly good price and I still make money. Everyone wins.

    Banner ads should be discrete (at the top or bottom of the pages--not in the middle of the content) and not take too long to load. They ought to be related to the content of the site, too.

    What I am totally against is sites that now put huge banner ads on their site (they look silly and take up too much real-estate) or those sites that open up their ads in new browser windows. now has normal banner ads on their site AND opens a banner in a new window. For that reason, I now get my weather only from CNN.COM and

    ... Apparently they think by creating more and more large and annoying banner ads they can generate more revenue--more likely they'll just drive people away to other sites and they'll make less. Duh.
  • Remember the whole eFront fiasco [] from a few months ago? Well, eFront did the same thing as UGO is trying to do: in order for webmasters to get back to their domain names, they had to forfeit 5 months of backpay, and agree not to sue eFront at any time in the future. As far as I know, a lot of webmasters agreed and signed the contract in order just to get their domains back quickly, as one weekend eFront blocked out all webmasters from updating their sites for "security reasons".

    Looks like UGO is on it's way to becoming a member of Pud's list []...oh wait, nevermind...Pud has an article that UGO just bought Bla-Bla! []. Sheesh! Rough times indeed...
  • They're holding back payments because they're trying to save [] Gary Coleman. Once Mr. Coleman's debt is handled, it'll be business as usual.
  • On a related note, how does slashdot make money? I can't imagine banners and t-shirts are enough to satisfy big cheeses like CT and his motley crew.

  • "The lawsuit angle is unlikely to get
    you any more money than just signing
    the paper,..."
    No, but it _will_ punish the guilty.

  • It seems unlikely that you'll get any more money from a lawsuit thatn you would by signing the release UGO wnats you to sign, but certainly consult several atourneys before signing. This may seem repetitive, but vary simply, this is the only advice that could reliably be provided by /. readers. Sure there may be a few lawyers who read /. that can provide more cogent advice, but as someone else pointed out. The advice you get here is worth what you pay for it. No lawyer would publish here, a complete action plan for you if he knew he could contact you directly and charge you his normal rates. That being said, good luck in your efforts to squeeze money from this stone.


  • Your post was the most cold, heartless, straight-to-the-point slapdown on a dotcom business model I've read in many years.

    Keep up the good work.

  • so now you know why!

    Bunch of dummies, for the last two quarters advertising companies are demanding cash up front for producing content/ads for web companies. A lot of other companies demand the same from any web based enterprise.

    Why do web based enterprises think they are immune from the same treatment? Just because your both web based doesn't mean you have some secret handshake protecting you.

    You would have thought the guys at VE would have learned by now.

    Suggestion, get all these sites together and file a single lawsuit. In the meantime don't run their ads

  • Unfortunately even if they take the cash they are in the same boat. They don't have the clout to demand payment up front, and they probably never will.

    If anything these these sites need to band together to put a stop to the abuse foisted upon them.

    I am quite sure the executives at UGO are highly paid, and protected if they should be let go. Its crap like Webvan's recent settlement with their EX-CEO that show who really benefits on the web, tag=nbs

    Hopefully they will piss off a site that has connections, and get their ass handed to them legally.

    Until then, fan sites will continually be screwed. The net isn't free, and if we want good sites we are going to eventually have to pay (even if its micropayments - I would not mind paying a few cents per day to these sites for their content)

  • by Bonker ( 243350 ) on Wednesday May 16, 2001 @08:23AM (#219511)
    I was also going to suggest that this sounds like a case where Class Action Suit would be appropriate. UGO is defrauding a *lot* of people. Now, in the case of a class action, you probably won't get a lot of your money back, but I think you also don't get bent over for legal fees if you are a participant.
  • Remember these ad based companies are starving, they don't have much cash on hand at all.

    Yeah, but that's not his problem. They owe him money, and they're threatening to renege on their obligations entirely if he doesn't give legally binding consent to let them renege partially.

    This is a very drastic decision for them and they wouldn't be doing it if it wasnt an absolute necessity.

    If they're in such dire straits, what the hell were they doing acquiring Bla-bla? They should have used that cash to pay their affiliates.

    Perhaps they really are out of money, but I have no way to verify that - this may just be a ploy to reduce the amounts they pay affiliates. Either way, it's not the poster's problem, and there's no reason he should put up with it.

    Sue them into bankruptcy, says I.

    - B

  • by RareHeintz ( 244414 ) on Wednesday May 16, 2001 @08:01AM (#219513) Homepage Journal
    IANAL, YMMV, all disclaimers apply, void in Wisconsin, etc.

    If they're contractually obligated to send you the money, I'd suggest that you find a lawyer who'll work on contingency for a portion of the proceeds, and sue them. They're bascially telling you that unless you let them rewrite the contract, they'll break it anyway. That's wrong, and even if it won't net you much cash, there's no reason to let them think they can screw people like that.

    I mean, it's one thing for them to want to rewrite the terms of the contract going forward, but this is bullshit - they're attempting to dodge obligations they've made. Such arrogance should not be tolerated. If they can't meet their financial obligations, let the bastards file for bankruptcy like everyone else.

    - B

  • From press_03052001.asp []


    UGO Networks Raises $13 Million; Closes A New Round of Funding with $23 million

    New Proceeds will be Used to Grow its Technology Business and Develop Advertising Sponsorships Packages

    New York, NY March 5th, 2001 - UGO Networks, a leading entertainment company for 18-34 year old males, announced today that it raised $13 million dollars, closing a new round of funding with a total of $23 million. Lead Investors are GRP and Missouri-based Gryphon Holdings II, LLP Inc. and their investment partners. UGO Networks has raised in total $80 million. UGO Networks consists of UnderGroundOnline (, a network comprised of 350 affiliated sites which feature content in animation, music, games, wrestling, technology, TV & film, celebrities and UGO Networks Technology Solutions, which provides Web hosting and other professional services to UnderGroundOnline affiliates, strategic partners, and third parties. Board members include Strauss Zelnick, Former President and CEO of BMG Entertainment and Yves Sisteron, Managing Partner of GRP.

    "UGO Networks' strength lies not only in the size and composition of its audience, 18- 34 year old males, but in the way in which its unique business model enables multiple revenue streams," said John Wehrle, Managing Partner of Gryphon Investments. "The Company's management team has proven to be extremely adept at leveraging and maximizing all of its internal resources."

    "UGO Networks has demonstrated the ability and business acumen not only to survive but to succeed in today's market environment," said Yves Sisteron, Managing Partner of GRP. "The management team is highly adept at both managing cash and generating revenue. The company has had tremendous success in building a base of blue chip advertisers and technology clients."

    UGO Networks has overall annual revenues of $15 million.

    "UGO Networks will use the new funding to continue operations until our breakeven which will happen before the end of calendar year 2001," said UGO President and CEO, J Moses. "To this end, we are taking cost cutting measures to increase efficiencies in our business."

    UGO Networks will use the new proceeds to grow UGO Technology Solutions, its technology business and to develop and sell advertising sponsorship packages.

    "As a well funded company, we are looking to leverage our cash position to explore potential strategic partners. An ideal partner would enhance our market position and leverage the Company's core assets," said Joe Robinson, Chairman and Founder, UGO Networks.

  • Well... maybe you can get a server... :)
  • By "last 2 checks," I assume that you mean the checks being offered for January and February of this year. BTW, IANAL. Now, it seems to me that if they are telling you that you have to sign away your "rights" (more like expectations) to being paid for March and April in order to get the checks already owed for January and February, then I think that's a load of crap (note use of high-level legalese). I would hope that somebody in your position would have already had a contract with UGO that clearly defines how you are to be compensated for running their ads (and hopefully the timeframe of said compensation). If that's the case, then it would seem that they're already in breach of contract. Getting you to sign away half the money they owe you in order to get any at all is just a tactic that they'll take because they think that they can get away with it. After all, most of the websites that you mentioned are run by hobbyists or young adults for whom the site is not their primary source of income (nor are they likely to file a lawsuit). Beyond that, I would think that it seriously would call into question UGO's ability to pay you any future money that they will end up oweing you (for May, etc.). Of course, that also calls into question their ability to pay any eventual legal settlement as well. Let's face it, you're dealing with a company that is financially tapped out. You could refuse to sign the new contract and sue for this year's money owed. Odds are you wouldn't get much for your effort and you'd have to pay lawyers fees. You could sign the contract, take the money from January and February and then tell UGO to take a hike. Or you could not sign the contract, not sue, tell UGO to take a hike and hope to get somthing out of them if they go bankrupt. Any way you slice it, you're doinked. If this is only a hobby to you, take the money and run. If this is your profession or you really need that extra money, talk to an attorney and see what he thinks. This of course assumes that the amount of money owed is actually significant (in the thousands of dollars). Either way, wash your hands of UGO through whatever manner is stipulated in your contract and get on with life.
  • What is it with CEOs that they must all be rhetorical drones?
    "As a well funded company, we are looking to leverage our cash position to explore potential strategic partners. "

    Yeah? Is that right? A company with money is trying to use it to get more money? Shit dog, I never would have expected it. Seriously, what is the point of making this statement? Is it not OBVIOUS that a company looking for money is interested in using that money to grow a company? You see, this is the kind of dumbass shit that makes the absurd dollar amounts of most CEOs something sickly laughable -- they use the same methodology as everybody else, and when they fail using that methodology it's the market's fault and when they succeed it's because that CEO is somehow better than other CEOs using the same bullshit methodology and rhetoric. Shit, at least athletes thank Jesus for their fluke victories.
    "An ideal partner would enhance our market position and leverage the Company's core assets," said Joe Robinson, Chairman and Founder, UGO Networks.

    Is that right? Well, captain dotcom, my ideal partner is a leggy blond with a sweet honeypot and tits til tuesday, but I don't feel the need to usher a press release -- because anybody could guess it. Why not spend less time looking for this magic rich bitch of a dotcom partner and spend a little time finding a successful business model? UGO is in charge of the futures of some of my favorite sites and net personalities (Kyle from HardOCP, who is my hero, Seanbaby and of course lovabel Miguel from fatchicksinpartyhats). And rather than try and innovate their way into profitability, they're praying to the partner fairy and relying on a dead advertiser's market. Why not do something useful instead of treading water with these damn bloodthirsty VCs?
  • This does sound like the best approach. If UGO is making offers like this, they are probably pretty close to bankruptcy--and if they aren't, they probably will be once the credit reporting companies find out about that letter. I assume that the arrears are not a huge amount, so you don't expect to collect enough to make having your own lawyer worthwhile, so giving up 25% for a piece of Dun and Bradstreets' lawyer is probably good deal.
  • Your lawyer said:
    > "one of the most one-sided contracts I've seen in my life."

    Your lawyer has never seen an EULA or ISP TOS before, has he?

    "All your right are innate to us."
  • Ask slashdot has lately become: IANAL and I do not want to hire a lawyer, tell me what to do.

    Now if this had been phrased differently like: Here's what is being done to screw honest web-hosting nerds out of their due money... It might pass as news for nerds.

    Now don't get me wrong. I dislike companies pulling this kinda shit just as much as the next guy. But I think this guy should hire a lawyer and slashdot should post news.


  • by Chakat ( 320875 ) on Wednesday May 16, 2001 @07:57AM (#219536) Homepage
    But you're goint to have to talk to a lawyer, have him put together a strongly worded letter saying that if they don't pay up, you will have no choice but to see them in court. They're in breach of contract here, and if what you say is true, you've got pretty much a slam dunk case here.
  • Seems to me that he doesnt really want to sue anyone:

    "A lawsuit just doesnt seem like it would really net any cash"

    and wants to get peoples advice about how the situation can be sorted:

    "Does anyone have any realistic advice for all these webmasters?"

    Lots of webmasters read slashdot so it seems like a fair enough place to ask what others have done in this situation.

    I think you're being a bit harsh.
  • by cREW oNE ( 445594 ) on Wednesday May 16, 2001 @08:15AM (#219546)
    We've had the ugo contract examined by a lawyer earlier last year. There's very very little chance you can squeeze money out of them. The lawyer classified the contract as "one of the most one-sided contracts I've seen in my life."

    UGO is, as the rest of that sector of the net, hit hard by the current crisis. It is not their fault, how much even I hate it. (I have sites under UGO)

    There simply is no money to pay the sites their $10K+/month anymore. The party is over. Get over it, get a real job.
  • by KIA2001 ( 452659 ) on Wednesday May 16, 2001 @10:44AM (#219560)
    If you are checking with licensed local counsel regarding your options, be sure to inquire about an involuntary bankruptcy case. That's right. Under 11 U.S.C. 303 there are certain situations in which creditors have the right to place a business into either Chapter 7 or Chapter 11 against its will. Now one of those requirements is that you have three or more entities meeting certain criteria (303(b)(1)). As you have described the situation, you and the other affiliates seem to be at least three different creditors, all of whom have substantial debts. The details, pros and cons should be discussed at length with your counsel, i.e. pro: a United States Trustee will administer assets and pay debts. Con: the debts may be paid pennies on the dollar if at all, depending on assets. Nevertheless, the bare possibility of an involuntary bankruptcy may alter the bargaining positions of the company. They may decide that they can be a tad more generous even if it is only so they can squirrel away more assets before they finally collapse.

We gave you an atomic bomb, what do you want, mermaids? -- I. I. Rabi to the Atomic Energy Commission