News: E-tailers seek to block "parasiteware"
Online merchants want new standards to help fight "parasiteware," an increasingly visible breed of software that seeks to pocket commissions doled out through the Web's ubiquitous affiliate marketing programs.

Shawn Schwegman, the director of affiliate marketing at Web store Overstock.com has proposed a meeting among representatives of online merchants, affiliates and affiliate networks to develop the standard. The goal is to be able to quickly identify and act against software that credits the wrong party when online stores tally commissions for Web referrals.

Additionally, a network of affiliates called Be Free has issued a proposal for how such networks should handle commission diversion software.

"People are exploiting technology to make a buck, typically at the cost of someone else's commission," Schwegman said. "The root of the problem is that there's no industry standard that defines how to conduct business in the affiliates world."

Online merchants such as Amazon.com and Overstock have networks of thousands of affiliated Web sites. Affiliates receive commissions for directing customers to the retailers' sites, an arrangement that has proven to be an inexpensive way for online merchants to attract customers and for Web site operators to make some money.

However, during the past year, a number of companies associated with some popular file-swapping programs have tried to tap into this revenue stream as part of a broader and increasingly aggressive marketing effort.

At the center of the controversy is marketing software produced by Wurld Media and TopMoxie, which come bundled with downloads for file-swapping programs Morpheus and LimeWire, respectively. Critics have charged that the adware produced by the companies purposefully redirects commissions from other affiliates. Additionally, critics have charged that once the adware redirects a commission on a particular sale, it will continue to redirect commissions on all subsequent sales.

In typical affiliate transactions, consumers click on a link from a Web site such as Lance Armstrong Online that points to a product on a merchant site such as Amazon. If a customer buys the product, Amazon pays its affiliated Web site operator a commission for the sale, typically 5 percent to 15 percent of the purchase price.

Stealth sales
But that scenario changes if the consumer is running the initial versions of Wurld Media or TopMoxie's programs--or similar products. If the consumer is running one of the programs and clicks on the link from Lance Armstrong Online, the programs would rewrite the code to make it look as if the sale had come from their sites. As a result, Amazon would pay a commission to Wurld Media or TopMoxie's partners rather than to the independent Web site operator.

"It's not fair that (the small Web site operators) get taken advantage of. It's not fair that some company comes in and creates a skewing of the entire affiliates industry," said Haiko de Poel Jr.…
http://zdnet.com.com/2100-1106-960214.html