Category Archives ⇒ Business

Cable TV Industry Losing Record Numbers of Subscribers

· Brandon Hann

For years, the amount of time I spend watching tv has dramatically been decreased to practically nothing. Aside from a few number of shows that I still enjoy, there’s nothing really exciting on. However, this article is not about the quality of tv—it’s about the alternative choices.

In my current house, there are six televisions all set up with boxes from AT&T UVerse. I don’t get into the downsides of AT&T UVerse here, but let’s just say being able to only watch 4 different channels at any one time across all 6 boxes is an outright crime! The worst part about this is that when that 5th person wants to come on and view a different channel, he or she has the ability to either watch one of the 4 channels being viewed or kick off the newest person to turn on their tv! Sorry, I said I wasn’t going to get into it, so let’s move on!

According to the Associated Press, eight of the nine major subscription-TV providers have lost 195,700 subscribers between April and June of this year. This group provides TV services to about 70% of the country, so these numbers equate to 0.2 percent of their 83.2 million customers. This might not seem like a lot, but if this trend continues, who knows what may happen.

Actually I have some theories on that! First of all, why are people leaving their tv services? One major contributor to this downsizing is the economy. Naturally, when times are tough and unemployment rates are high, people begin to trim expenditures where they can afford to. “Afford” in this case means where people are willing to let go of some luxuries. For some reason, they’d rather eat than to watch tv.

In the last few years, Verizon, AT&T and DirecTv have all been ‘stealing’ customers away from the big cable companies like Time Warner and Cox which would explain for their continued losses year after year, but now all of these companies are starting to feel the burn. Another contributing factor in the losses is assumed to be Internet video sites. More and more younger people are getting their entertainment fix on sites like YouTube, Hulu and Netflix. In the case of Hulu, users are opting to wait a day or two before their favorite show appears on the site opting to watch it there instead of sitting in front of their tv.

Even for those wishing to watch Hulu on their tv, they can do so now with their Blu-ray player or Xbox system. YouTube and Hulu are free while Netflix charges $7.99 for the streaming of any available DVD they offer which includes feature films and plenty of television shows that have appeared on DVD discs. Hulu Plus offers customers the ability to watch shows online with less commercials and usually a lot sooner than the free users. No matter how you slice it, these online services can undercut tv subscriptions any day of the week.

However, as the paradigm shifts, we can surely expect an increase in fees that we pay to those online services because afterall, they have to pay for the content too and what do you think all the tv and movie studios are going to charge them if they can’t get their money from advertisers?

My two cents

There is no direct comparison between cable tv and Internet tv simply because with Internet tv, you have to find everything you’re looking for and constantly change videos as each of them end and that requires work. Part of the enjoyment of watching tv is having the never-ending flow of programming at your disposal without having to get up and do anything about it.

As for me, I spend most of time at a computer both for work and pleasure, so it’s a natural thing for me to watch tv and movies online. However, I don’t watch much of anything anymore due to my hectic schedule so I could do without the tv service and most of the online stuff, but I’ll never get rid of my Netflix!

Google+ Brand Pages Compared to Facebook's

· Brandon Hann

The battle started when Google launched Google+ and now it’s going to get even more heated with the introduction of brand pages just like the ones that Facebook allows businesses to manage. There’s not an official name for it at this time, but it’s coming in a month or two.

I love how Google does business. Most companies out there would spend countless amounts of cash and resources to try and bring people toward their product or service, but not Google. They simply create something and just leave it alone. The statement, “If you build it, they will come.” is more than true for Google and in the case of branded pages, Google is actually telling businesses NOT to create Google+ profiles at this time!

Google+ Product Manager Christian Oestlien says that Google is in the process of building a business-side of Google+ that will “creat[e] a unique experience for businesses that includes deep analytics and the ability to connect to products like AdWords.”

First of all the problem with Facebook’s brand pages is a matter of advertising. Companies want to know whether their advertising dollars are being spent well and Facebook simply doesn’t have the capacity to track post-click engagement of non-Facebook ads driving to Facebook. Google+ will attempt to solve this problem through the inherent connections between all of Google’s services like AdWords and actual searches. Here are three other reasons why Google+ brand pages are likely to beat Facebook’s.

  1. Better search opportunities – Advertisers paying for sponsored search results on Google’s search results have to pay for these clicks to go through to the Facebook.com domain which is pretty generic when compared to their business. Facebook.com generates a lower click-through ratio (CTR) because people won’t automatically associate Facebook.com with any particular business.

    With Google+ already showing in search results, it’s likely that businesses setup with Google+ pages will be in better positions in the general search due to the relation between content and search query.

  2. Customization – If you look at a current Google+ page, you’ll notice right off the bat how customizable it could be based on ad placements and such. If an advertiser could customize their ads to better brand themselves. This would be similar to how an advertiser can customize an entire YouTube experience or what MySpace has been allowing users to do for some time now.

    Facebook pages still look like profiles and while this creates consistency, it doesn’t do much for user interaction and participation.

  3. Analytics – Google already has a major head start here with Google Analytics and they will no doubt integrate this service with Google+ to make it much easier (and possible) to track detailed information about a company’s fans among other things.

    These tools will allows companies to make better content decisions much like they already do with their main websites.

My two cents

I have a Facebook page for my photography business and while it’s functional in terms of engaging interested Facebook users with everything I offer, it still feels like just another Facebook profile. I spend enough time just managing one and now I have two. I’m not saying Google+ will be much different, but what I like (so far) is the thought of how integrated it will be with the functions of Google itself.

Since I already spend time getting Google to play well with my websites and whatnot, it just makes sense to keep these processes going in a seamless transition. Of course, only time will tell if all of this will be truly seamless, but so far, everything sounds appealing.

Apple and Microsoft Teaming Up Against Google?

· Brandon Hann

Nortel logoWhether this is the reality or not, Google seems to think it’s happening. When bankrupt Nortel decided to sell its approximately 6,000 patents and patent applications covering a broad range of wired, wireless and digital communication technologies back in April, the plan was to offer a stalking horse deal to Google for a cash purchase price of $900 million. The intention with this was to place a starting value on the patents for inclusion in a public auction with Google in position to bid on the final package.

What happened was that bidding finally raised the price to $4.5 billion! These 6,000 patents seemingly cover the entire spectrum of mobile computing and telecommunications which would put any buyer at the helm of the technology industry. This “buyer” ended up being a consortium of tech companies that banded together in order to share the patents, thus eliminating possible costly licensing fees. This consortium is comprised of Microsoft, Apple, Ericsson, EMC, Sony and RIM. Originally, Google was invited by Microsoft to be a part of it as well, but Google declined.

Novell logoAdding into that mix, another set of tech patents, this time from Novell was cleared for sale to a slightly different group of companies: Microsoft, Oracle Inc., Apple and EMC Corp. This sale contained 882 patents. All of these patents were also made available to Google at some point in the last 2 months, but Google again declined to be a part of it.

As a result, Google is now claiming that Microsoft and Apple have teamed up together in an effort to bring down the Android market. The way this works is if Google is making phones that use technologies covered by any of the aforementioned patents, they would be subjected to licensing fees controlled by Microsoft, Apple and the rest of the bunch. Google claims that this would give their competitors an unfair advantage in the smartphone arena.

While this is very true, can Google really complain? Considering they had the chance to partake in these deals and the fact that Microsoft invited them to be part of the consortium, I can’t really say I side with Google on this! However, Google is already paying Microsoft licensing fees on Android phones for patents they own, so it’s very possible that Microsoft would use this as a way to bring down Android. In fact, Microsoft just recently asked Samsung to fork over $15 per Android phone they make—presumably due to the fact that Samsung also makes Windows Phone and Microsoft probably wishes they didn’t deal with Android.

It’s estimated that there are some 250,000 patents involved in making an average smartphone so it seems no matter who owns what patents, the only real losers in this case will be the customers. Afterall, we’re the ones having to pay upwards of $600 to own the latest tech gear. This price of course is not including any subsidized cost of buying a phone with a contract. One possibility for lowering prices would be the ownership of a majority of patents that go into making a smartphone. In a perfect world, there’d be no licensing fees and the phones could become dirt cheap.

Apple Inc. Has More Cash Than The U.S. Government

· Brandon Hann

Amidst all the debt ceiling confusion surrounding today’s financial drama, it’s amazing to find out that a large corporation such as Apple actually has more cash on-hand than the whole United States government!

Ok, maybe it’s not such a surprise after all given that our government spends more than they bring in and when they need more cash, they practically just print it. I won’t go into all the details here, but to summarise the situation very quickly, our country has a limit to how much debt we can have. That limit is currently set at $14.4 trillion dollars. Let’s see that number in all its glory: $14,400,000,000,000 That’s a lot of money. Anyway, it appears that we’re nearing that limit and fast, so the debate is redhot: do we increase the limit to allow us to borrow more money or do we cut spending to reduce the amount borrowed?

As a result of trying to figure out how to solve this problem, politicians have let our national coffers dip to a dangerously low amount. The best analogy for this chaos is if our government was using a single credit card for all of its spending, they are reaching the credit limit. To offset this, they have practically wiped out their bank account and are now waiting to see if their credit limit will be increased. That leaves the whole United States with an unmanageable debt and only $73,768,000,000 ($73.768 billion) in the bank.

Apple Inc. currently has $76,156,000,000 ($76.156 billion). The maker of fine products such as OS X, iPhone, iPad, iPod and Macbook is theoretically richer than the whole country. How does that sit with you?!

While this $2.388 billion difference might seem like a small number, it’s really not when you consider that the country’s income is comprised of every tax-paying individual living in this country, every product exported out to the world and a slew of other things like investments, bonds, etc. Since it’s clear that the government’s income is far greater than Apple’s, the problem must lie with the spending—wow, did I just solve a major national crisis with just one sentence?! Someone please send this link to Obama and Congress. 🙂

On a sidenote, Apple is now poised to become the largest corporation on the planet (in terms of profit) after reporting an estimate $5.5 billion in iPhone sales in this year’s third quarter. Let’s see if someone can finally take down oil-giant ExxonMobil!

If you were wondering what it would be like if Apple gave all of its money to the government, you could expect the cash to run out in about a week because according to Fortune magazine, the U.S. government spends roughly $10 billion a day! Maybe the government should start selling iPods to recoup some of their losses. I guess it wouldn’t matter because I’m sure they’d find something frivolous to spend it on.

Google+ Versus Facebook

· Brandon Hann

I have always been wondering when the demise of Facebook would start just like how MySpace quickly came and went along with other social networking sites like Bebo and Friendster. The old saying, “Nothing lasts forever” couldn’t be more true in the Internet world. In fact, you could easily change that to, “Nothing lasts 4 years.” Experts have already predicted that Facebook has already reached its peak and in time, members will slowly dwindle away. So what causes this? Well, a number of things could contribute to a website losing popularity. They could reach the pinnacle of their innovation, people can lose interest as they get older, younger people might find other things to do or maybe there are too many spammers and ads.

Whatever the case may be, we can guarantee that corporate America will always be there to ride the money-train as long as there are tracks to roll on. Enter Google Inc.

Google+

The latest competition to Facebook is by none other than Google. Of course like every other beta service they launch, it’s by invitation only and they are currently “at capacity”, but you can check out the Google+ Tour on their site. I won’t go over everything here, but I do want to touch on 3 of Google+’s features.

Circles

Google+ Circles
Circles is a way in which you can group your contacts into various categories. As an example, you can have your school friends, your drinking friends, your co-workers and your family members all in different circles. This is a neat feature that allows you to share specific information only with certain people.

On Facebook, if you write something on your wall, everyone gets to see it and we all know what kind of trouble that can cause!

Google describes circles as:

You share different things with different people. But sharing the right stuff with the right people shouldn’t be a hassle. Circles makes it easy to put your friends from Saturday night in one circle, your parents in another, and your boss in a circle by himself, just like real life.

Sparks

Sparks allows you to tell Google about the things you’re interested in and as you would have guessed, they will bring you the latest search results and news updates related to these items. I like Google’s explanation much better:

Remember when your Grandpa used to cut articles out of the paper and send them to you? That was nice. That’s kind of what Sparks does: looks for videos and articles it thinks you’ll like, so when you’re free, there’s always something to watch, read, and share. Grandpa would approve.

Hangouts

Google+ Hangouts
I really like this feature because it allows you to join in conversations that your other friends are having at any time. It’s kind of like running into a friend at the store only now it’s online!

Bumping into friends while you’re out and about is one of the best parts of going out and about. With Hangouts, the unplanned meet-up comes to the web for the first time. Let buddies know you’re hanging out and see who drops by for a face-to-face-to-face chat. Until we perfect teleportation, it’s the next best thing.

My two cents

If there ever was a worth challenger to Facebook, I would imagine Google would be it. Google has just about every other service under the sun so it only seems fitting that they add a social networking site to the mix. After looking at what Google+ promises to offer, I think the experience will be far better than that of Facebook, but I also think Google will have a lot of catch up to do. As far as customers dropping off of Facebook in exchange for Google+—I don’t think that will happen. Personally, I’ll have a Google+ account and we’ll see how things go.

As for right now, I placed my name on the waiting list to be invited into the exclusive club. We’ll see what happens.

Is Cloud Computing Really The Future?

· Brandon Hann

Lately, we’ve all been hit with talk about the future of computing and how everything might end up on “cloud” services. As a result of this forward-thinking movement, everyone seems to have gotten in the game: Apple with iCloud, Google with GoogleApps and now Microsoft with Office 365. While each have touted their superiority over the others, it’s hard to imagine a computing experience existing only on the Internet. But I guess 20 years ago they said it would be hard to imagine something like the Internet too.

Originally, I was thinking that this is a good idea because how often have you been away from your computer and needed a file or two only to remember that even though you’re carrying a capable smartphone, a laptop and a tablet device, the one file you needed most was at home stuck on your hard drive? For me, it happens fairly often. Of course, it’s nothing that would stop the world from spinning, but out of convenience, it would be nice to have a place where everything resides.

I like to think of cloud computing like IMAP email where you can connect all of your devices to your one email account and no matter which device you use to send, receive, move or delete messages, every device always has the same updated information. However, there are others that think the cloud poses a threat to security and privacy. They might be on to something here.

Cloud Computing

I decided to create a pros and cons list to cloud computing and let the readers decide for themselves.

Pros

  • Access – Likely the number one reason the cloud looks like a good idea—the ability to access your files from any Internet connection is very convenient.
  • HDD space – Depending on what service you use and how much it costs, you can determine how much storage space you get. In turn, you are also saving local space on your computer.
  • Safe and secure – Putting your files in the cloud can remove it from threats such as house fires, theft, auto accidents, plane crashes and viruses.
  • Collaboration – Businesses and teams alike can work on files at the same time for a truly live collaboration between multiple people located in various parts of the world.
  • Cost savings – This one is subjective, but the cloud could save you money from not having to spend it on hardware, more computers or other devices.

Cons

  • Security – Putting anything out on the Internet can be potentially dangerous in two ways—simply storing it and then transferring it.
  • Privacy – This one is for the paranoid, but is it possible for employees of such cloud systems to have access to client’s files? If so, what could a disgruntled employee be capable of doing with such access??
  • Reliability – The cloud cannot exist without the Internet, so if you ever lose your connection, you won’t have access to your files. Try working on an airplane now!
  • Speed – Again, due to the Internet reliance, transferring large files to and from a cloud service can pose a problem. Especially if you’re trying to make it out the door in a flash.
  • Storage space – No cloud service seems to offer LARGE amounts (above 5gb) of storage space so at this time, it would be foolish to think you can store all your movies, videos and music.

My two cents

I see both sides to this coin, so I can see myself using the cloud for some things, but not others. I find that some of my more pertinent documents would be put in the cloud only if I see a use for them at work or at a friend’s location. However, I have many, many gigs of data that I know I would never be able to put in a cloud service nor would I want to. What’s the alternative? I created a very organized computer system that I run local servers on (FTP, web and mail) as well as Remote Desktop Connection so I can access this computer through any desktop or laptop and even some mobile smartphones.

In a sense, I created my own cloud. If you’re interested in something a little less cumbersome, you might want to check out a free service from Tonido. They offer the ability to create your own personal cloud without all the headache of setting everything up.

Google Sets Out To Buy Hulu

· Brandon Hann

If owning YouTube wasn’t enough, now the technology giant sets its sights on Hulu. Currently, Hulu is a jointly-owned outfit run by the likes of Disney, NBC Universal and News Corp. The service picks up the slack where YouTube drops it off—broadcasting tv shows and other specials that are wholly owned by mass media outlets like NBC Universal, CBS, ABC, etc.

If this purchase were to happen, it would be hard to imagine what or who could get in Google’s way. Google already has the largest and most popular search engine today and the most populated self-promoting video site available. If they add Hulu to that mix, they would have a trifecta from hell! Well, maybe it won’t be that bad, but the idea that one company could theoretically be at the helm of the web’s top three search, video and tv site is pretty scary.

Google is already in hot water over allegations that they favor their own services in search results when compared to paying advertisers. Their complaint is that other companies can’t compete with Google due to the massive amount of services and products they offer. I have to agree, but is all these ill-thoughts toward Google valid? I mean, if a company makes great products and people love using them, how is it their fault that competitors have it tough?

At any rate, the Hulu purchase would further allow Google into the connected devices of Americans all over the country via the Hulu Plus subscription. Hulu Plus allows paying members the ability to connect Hulu accounts to almost any media device: Blu-ray players, gaming consoles, smartphones, Internet-tvs and those new refrigerators that have built-in wi-fi and LCD screens. Google had already expressed major interest in a Google TV service that offered these features. Maybe it’s safe to say that Google can now proceed with that idea and adding Hulu to the mix as a fore-front content provider. Or maybe Google can simply re-brand Hulu into Google TV.

Whatever the case may be, let’s just hope things get better instead of worse. Right now, there’s an epidemic of floundering websites and media services that come and go by the night, all competing for your eyes. Only time will tell who the victor is, but one thing’s for sure, the mega powerhouse Google is not going away anytime soon.

It's Official – Amazon Severs California Affiliate Program

· Brandon Hann

I just got the email today stating that Amazon Associates is no longer “doing business” with California. It appears that Governor Brown had signed into law a reform that forces online establishments to pay (and charge) sales tax on purchases.

Proponents say that the new law will create a more level playing field for smaller businesses and big-box retailers to compete with online businesses. Amazon and Overstock both feel the law is “unconstitutional” and counterproductive. In 1992, the Supreme Court ruled that states could not charge taxes on businesses that did not have a physical presence there, but California has just side-stepped that ruling by declaring that affiliates and other “partners” are in fact a physical presence. So what does this mean? Amazon will still be doing business in California in terms of sales (and charging sales tax now), but they will not be sharing any commissions with California-based affiliates. I can’t imagine how those people feel who rely 100% on those commission dollars each month!

Again, this is an effort to curb consumers from skipping out on paying sales tax by purchasing online. In other words (and my opinion), it takes the choice out of the customer’s hands. Most of us who shop online do it for convenience as well as lower prices. If California wasn’t such a very un-business friendly state, then maybe more businesses would want to take up residence here. The way I see it is California has made it near impossible to run a business in the state, so most large corporations leave. Then when they come back to sell products, California wants to charge them taxes just for doing business.

Here’s the email:

Hello,
Unfortunately, Governor Brown has signed into law the bill that we emailed you about earlier today. As a result of this, contracts with all California residents participating in the Amazon Associates Program are terminated effective today, June 29, 2011. Those California residents will no longer receive advertising fees for sales referred to Amazon.com, Endless.com, MYHABIT.COM or SmallParts.com. Please be assured that all qualifying advertising fees earned before today will be processed and paid in full in accordance with the regular payment schedule.

You are receiving this email because our records indicate that you are a resident of California. If you are not currently a resident of California, or if you are relocating to another state in the near future, you can manage the details of your Associates account here. And if you relocate to another state in the near future please contact us for reinstatement into the Amazon Associates Program.

To avoid confusion, we would like to clarify that this development will only impact our ability to offer the Associates Program to California residents and will not affect your ability to purchase from Amazon.com, Endless.com, MYHABIT.COM or SmallParts.com.

We have enjoyed working with you and other California-based participants in the Amazon Associates Program and, if this situation is rectified, would very much welcome the opportunity to re-open our Associates Program to California residents. As mentioned before, we are continuing to work on alternative ways to help California residents monetize their websites and we will be sure to contact you when these become available.

Regards,

The Amazon Associates Team

My two cents

Personally, I didn’t make too much money off the Associates program, but that’s not the point. The fact that I can’t participate anymore really annoys me. To think that there are 6 other states who have passed similar laws and have NOT achieved any of the promised changes should be proof enough that this won’t work here. So what if the state plans to rake in about $317 million more tax dollars…do you really think they’re going to spend it wisely? Probably not…just more raises and bonuses for the upper management and more insane benefits for state workers.

Oh well, only time will tell. I hope California is doing the right thing because we’re in such a financial sinkhole it’s depressing.

Amazon Associates Closing in California

· Brandon Hann

I just got an email from Amazon in regards to my Associates account because I’m a California resident. For those that don’t know, states that collect taxes on retail purchases impose these taxes on all retailers (and anyone else) who do business in that state. For years, this has only covered those businesses with a physical presence in the state, but now, California is attempting to impose these taxes on partners and affiliates of said company as well. For example, if Amazon moved its main facilities to another state (which it did), they would not collect taxes on any items purchased in California because they don’t physically operate here. Instead, they might sell items through other business partners and affiliates that can help get items out to California residents better also without collecting taxes.

The new law simply accounts for those affiliates and business partners located in California as a physical entity, thus taxes are due to be collected. Those for the argument claim that collecting these taxes will help ease the suffering of brick and mortar operations trying to compete with big online retailers. Those against it say that these online retailers will simply close up shop in those states and work out of somewhere that doesn’t impose these taxes. For the consumers, it just means that if you live in California, you will be paying the California state tax on things you purchase online—thus prices will be higher.

Here was the email I was sent today:

Hello,
For well over a decade, the Amazon Associates Program has worked with thousands of California residents. Unfortunately, a potential new law that may be signed by Governor Brown compels us to terminate this program for California-based participants. It specifically imposes the collection of taxes from consumers on sales by online retailers – including but not limited to those referred by California-based marketing affiliates like you – even if those retailers have no physical presence in the state.

We oppose this bill because it is unconstitutional and counterproductive. It is supported by big-box retailers, most of which are based outside California, that seek to harm the affiliate advertising programs of their competitors. Similar legislation in other states has led to job and income losses, and little, if any, new tax revenue. We deeply regret that we must take this action.

As a result, we will terminate contracts with all California residents that are participants in the Amazon Associates Program as of the date (if any) that the California law becomes effective. We will send a follow-up notice to you confirming the termination date if the California law is enacted. In the event that the California law does not become effective before September 30, 2011, we withdraw this notice. As of the termination date, California residents will no longer receive advertising fees for sales referred to Amazon.com, Endless.com, MYHABIT.COM or SmallParts.com. Please be assured that all qualifying advertising fees earned on or before the termination date will be processed and paid in full in accordance with the regular payment schedule.

You are receiving this email because our records indicate that you are a resident of California. If you are not currently a resident of California, or if you are relocating to another state in the near future, you can manage the details of your Associates account here. And if you relocate to another state in the near future please contact us for reinstatement into the Amazon Associates Program.

To avoid confusion, we would like to clarify that this development will only impact our ability to offer the Associates Program to California residents and will not affect their ability to purchase from Amazon.com, Endless.com, MYHABIT.COM or SmallParts.com.

We have enjoyed working with you and other California-based participants in the Amazon Associates Program and, if this situation is rectified, would very much welcome the opportunity to re-open our Associates Program to California residents. We are also working on alternative ways to help California residents monetize their websites and we will be sure to contact you when these become available.

Regards,

The Amazon Associates Team

My two cents

I guess it would have been ok if I could still run my affiliate program to help with offsetting some of the server costs for my site even if that meant paying some taxes on it, but it looks like Amazon is taking a different route. Instead of operating under a new tax law, they’re closing down operations altogether. Of course this doesn’t mean Amazon will cease to exist as a retail establishment to California residents—it just means we won’t be able to help them sell their products while making some commission.

To read more about the online sales tax laws that are ready to be signed into law around September, check out this site.

Don Lapre in hot water for bilking $52 million

· Brandon Hann

Anyone who’s my age probably remembers spending a late night or two watching a funny little man on tv telling us how he was able to make $50,000 a week “placing tiny classified ads in newspapers” from his “one-bedroom apartment”. Right in those two quotes, you have the makings of a very successful infomercial—mention how lots of money can be made with seemingly little work and cater to others who might be living in a one-bedroom apartment as these people are likely to want an opportunity that will change their lives.

If you have no idea who I’m talking about, check out this video…it’s exactly what I remember when I was younger:

First of all, this guy is good and there’s no doubt about it. As a firm believer that hard work pays off and there’s no easy way of making lots of money, I never “fell” for one his claims, but I will admit that there were a few times when it seemed like the plan would work. More importantly, there are many other people out there that are worse off than me financially and just might jump at the chance to make even 100 more dollars a week.

The indictment

Don Lapre has been running infomercials like these for the last 8 years or so selling all sorts of money-making packages that are guaranteed to turn your life around. The two most prominent ones include the one above and another selling the The Greatest Vitamin in the World. This is the one that’s garnered the attention of the Feds and the United States Postal Service.

According to the case, Don Lapre is being indicted on 41 counts of conspiracy, mail fraud, wire fraud and promotional money laundering. It’s being claimed that he bilked over $52 million from some 200,000 unsuspecting consumers. Essentially, he’s being accused of running a nationwide scheme to sell worthless internet businesses.

The program

I don’t want to get into all the details here because the case file says it all in a 28-page PDF document available from Casewatch.org, but I do want to briefly explain what it is that Don Lapre does. Using The Greatest Vitamin in the World program as an example, this is how the program works.

  1. Watch Don’s infomercial and get excited about the potential of making lots of money.
  2. Call the 800 number to order the start-up package and personal website for $35.00 plus $13.65 shipping.
  3. Don’s reps would then call back consumers telling them that there were more fees in running the personal website including a $295 setup fee and $9.95 per month hosting fees.
  4. Don’s reps would try to upsell customers into buying web traffic for their new site guaranteeing them that people would come to the site and buy products or signup as new “investors”.
  5. Customers buy traffic packages ranging in price from $500-2000.
  6. Customers are offered sales incentives: Get 20 new people to sign up for the program and get $1000. Get 100 new vitamin customers in a month and get $10,000. For every 5 $1000 bonuses you earn, you get a 7-day paid vacation for 2.

My two cents

First of all, the vitamins are worthless. To Don, getting new sales people all dropping about $3000 to start their own business is where the money really is. Unfortunately, this is nothing more than a pyramid scheme. The ones at the top who are able to get to everyone who hasn’t joined yet will make all the referral fees. The ones at the bottom will have nobody to recruit because they’ve all been recruited…after some time, the pyramid crumbles because there’s nothing left to do but sell worthless vitamins and the guys at the top take their money and run.

Second, if you really think about it, why would Don Lapre (or any tv pitchman) want to tell you his money-making secrets if what he’s doing already makes him so much money? Do you really believe he’s out there trying to help the community? Do you really think he cares about helping you make more money in life? The answer is no. It’s the tell-tale sign of a scam and it’s no different than all those bloggers out there selling you $47 money-making plans that tell you all the secrets of Internet marketing. Trust me, if I discovered a way to make $50,000 a week, I wouldn’t tell anyone! Not because I’m selfish, but because I wouldn’t want to create thousands of competitors out there. If there’s only $50,000 to be made, that means I’d have to share it with everyone else who copies me. That’s not a good business plan!

I’ll tell you a secret. There are no secret ways to make money! There are however innovative ideas that will make someone millions one day, but those aren’t secrets—sometimes those are flukes or fads or streaks of luck. Facebook is a perfect example—sheer luck. The point is to make real money, you have to put in real work. If you think you’re going to make $50,000 a week with only a few minutes of work, you’re either delusional or you’re the one sitting on top of the pyramid because in any other situation, you’re not going to make anything close to that.

Ok, I’m done venting…the last thing I want to say is that I hope Don Lapre goes away forever! He’s a con artist and a thief. At the same time, I hope none of those people get their money back so maybe they’ll learn from their mistakes.