04 October 2011

Benjamin Wallace - How Two Scammers Built an Empire Hawking Sketchy Software

This article is from Wired.

I'm of two minds about this piece. Or, rather, about my own reaction to it (the piece itself is solid, well-researched, and an interesting read). If you haven't clicked through yet, it maps out the development of IMI, one of the leading lights in the scareware industry. All those fake antivirus programs? Blaster? Yeah. That's these guys.

On the one hand, the article talks about the company's founders as two smart guys who got led in weird directions, sometimes not entirely at their own behest.
Jack Palladino, the private investigator and friend of Jain’s, says that the two cofounders weren’t responsible for the worst excesses. Instead, he blames rogue affiliates, overzealous middle managers, and the pressures of hypergrowth. “This wasn’t them riding the tiger,” Palladino says. “The tiger was riding them.”

On the other? These dudes are job creators, right? They generated $180 million in sales in 2008, they hired a bunch of folks to work for them (some of whom have since been arrested, but isn't that the fault of overzealous regulators?), they've been, as the article points out,

"an engine of innovation. The team was constantly experimenting, tweaking its security software packages—which ranged from antivirus programs to registry cleaners to firewall software—and marketing them under new names, like WinFixer, ErrorSafe, and DriveCleaner. The company tirelessly refined its marketing, sending customers ads for a variety of products and then conducting sophisticated statistical analyses to see which approach was most effective."

C'mon, now, these guys embody the American Dream! Sam Jain is the son of an engineer. He graduated from Penn State in three years and, through constant hard work and keen insight into gaps in the market, made himself into a multi-millionaire.
Using nothing but pop-up ads and their own online distribution, Jain and Sundin succeeded in selling $40 software to untold millions of users. Over the better part of a decade, they built and then ran an organization to write and market that software.

It's hard for me to read this article and not want to be like these guys. Isn't this the way the market is supposed to work? The best advertising wins? The consumer's choice reigns supreme? The consumers chose these guys, didn't they?

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