Agloco – Getting paid to surf the web: Positive and Negative Views

In case you haven’t heard about this company Agloco has been on the web in the past under a different name. The company was called AllAdvantage and paid out about $120 million dollars to its members for surfing the web. People signed up at no cost and eventually the company went bust just two years after it was launched in 1999. You could read more about this company here.

Well now its back under the new name Agloco except this time the company isn’t paying out cash for surfing the web. Instead the company would be giving out points which later, if the company ever goes public, members will be able to trade for shares in the company.

There has been much talk on the web regarding this company and its paid to surf program. First, the way it works involves members downloading their yet to be released search bar and searching the web using their tool. Here is a screenshot of an illustration provided by Agloco:

Second, the same way an MLM operation works, people also earn points by getting others to sign up.

So what are people in cyberspace saying about this product?

According to Michael Arrington of TechCrunch, the company’s success depends on a couple of factors:

If they can get enough people actively using the software, and the advertising market doesn’t implode, my guess is they will have a success on their hands. AGLOCO isn’t going to make the world a better place, but it may be a profitable business.

Now here’s an interesting analysis titled Simmons Report: Agloco (since I couldn’t find any ‘About’ information, I presume it was written by someone named Simmon. Regardless the information is very detailed and well researched.) He writes the following in his conclusion:

The valuation conclusions are based on AGLOCO reaching two million users in a two year time span:
• A user who has no referrals should receive ownership in AGLOCO worth on average about $150. (plus monthly cash distributions)
• The average value of an AGLOCO user’s referral network should be $30 each in ownership shares plus the referrer’s share of monthly cash distribution.
• The average AGLOCO direct referral should be worth in excess of $3,000 each (see example below for details)
• The analysis also shows a range of monthly cash distributions of between $5 and $15 a month per user.
• The AGLOCO business model looks theoretically sound – (assuming they get to a decent size quickly – at least 500,000 users within nine months to a year)

However, some people aren’t as optimistic. Babak from performed his own analysis and had this to say about the program:

Assuming it does actually go public (I would really like to see an investment banker sit through a meeting with a straight face) Agloco will then have to use its shares as currency to pay its members – that was the original point, before all these twisty turns, remember? When it begins to do so, the proverbial sh*t will hit the fan.

If we assume Agloco is successful, they will have to regularly pay their considerable and probably growing user base a massive amount of money. Which means selling a massive amount of shares on the market. Guess what will happen to the value of the shares when this unflagging selling takes place? Guess what will happen before the selling hits as smart traders position themselves ahead of the avalanche of sell orders?

Having said all that, I don’t think Agloco’s a scam. It is a poorly conceived scheme that appeals to those who know very little about finance, share issuance and regulation. I really do wish Agloco would go public. How else would I get a chance to short it?

So where do I stand with this company? To tell you the truth I have no idea if it will work or not. Regardless, I signed up anyway. Why? Because it was free. If a program is free and I have the potential to make some money then why shouldn’t I give it a try. Its true that Agloco is an MLM operation but unlike many other MLMs such as Quixtar (aka Amway) and the more recent Agel, I am not required to pay to become a member.

With that being said, I signed up. If you are interested in signing up as well then click here. Please note, this is a direct referral link.

What are your thoughts?