Myles Recny looked in the face of Twitter yesterday and said, “You should shut my company down.” Now, the social network is in talks with Recny about the app he claimed was “better than Twitter Ads.”

“Twitter reached out to me, as has the ad team at one of the other big social networks, and we’re trying to work something out,” Recny said today, in an interview with VentureBeat.

His app, Followgen, uses Twitter’s application programming interface to automate “favoriting” people’s tweets. A company signs up with Followgen and decides on a target market. The app finds relevant Twitters users and favorites some of their tweets. If all works according to plan, the person will be pleased at having a tweet favorited and then, in turn, follow the company’s Twitter profile.

Recny considers this a form of advertising. Instead of serving impressions, he’s serving favorites that convert into follows. And that’s why he wrote that Twitter should shut him down: His app may violate Twitter’s terms of service.

However, he believes that if he had legitimate access to Twitter’s special advertising API, he could make money for both companies.

“It’s been kind of an emotional roller coaster. I’ve been having uncertainty whether what I was doing was white hat or black hat in regards to Twitter’s Terms of Service,” said Recny.

Twitter has a habit of shutting companies like his down, particularly when they encroach on its business model. Instead of waiting for the inevitable, Recny explained to me that he tried to contact Twitter first by applying for the special API two months ago. He then reached out through friends who knew Twitter big wigs. Both attempts failed.

Only after he wrote the blog post yesterday did the social network get in touch with Recny.

“We both know how the dev ecosystem feels about Twitter right now, and it’s not a positive sentiment, is it?” said Recny. “People feel that their API access can be turned off for any reason. People feel like there’s no trustworthy channel in which to get in contact with Twitter.”

He says Followgen customers can expect one of three outcomes:

1. Twitter will yank Followgen’s API access and he will have to shut down the company.
2. Twitter will yank Followgen’s “favoriting” business, but give Recny its Ads API access to build something that will be mutually beneficial.
3. Twitter and Followgen will figure out a revenue sharing partnership and keep both the favoriting product and a new Ads API-supported product on the market.

That last one, even Recny admits, is highly unlikely. But Recny is not without options. Twitter and the mysterious second social network could be interested in him as an employee on their ads teams.

We asked Recny if Facebook was the second social network to get in touch with him. He replied, “Would no comment be a comment?”

He leaves the experience having learned about the struggles of not only working with Twitter, but working with yourself. He says he would not recommend the solo-founder route, and would find a co-founder next time around. Or, at least, a co-working space with people he enjoys.

Twitter image via Andreas Eldh/Flickr

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Researchers at security firm Spider.io released details on a new botnet called Chameleon today, which it says has cost advertisers over $6 million in revenue — the first of its kind to impact “display advertisers at scale.”

We see botnets steal advertising revenue through text-only advertising, such as the search engine advertising you might see at the top of Google. But display advertisers are more difficult to target, says Spider.io. Those behind the display advertising use different techniques to judge their target audience and decide whether they are human or not.

The bot is able to mimic human interaction with a website so that no one suspects there is a bot behind the click, hence the name Chameleon. The bot only clicks on advertisement 0.02 percent of the time, and it re-creates “normal” mouse traces — or where the mouse hovers on the webpage — as well as “random” click-throughs on a specific advertisement. That is, it doesn’t click the ad in the same spot every time.

The firm first started investigating the botnet in December and say the program has cost advertisers up to $6.2 million so far. The botnet specifically targeted 262 unnamed websites and accounted for 65 percent of the traffic served to those websites. Spider.io was able to detect at least 120,000 “host machines,” thus far, and it says the majority of them are from United States IP addresses.

hat tip Ars Technica; Chameleon image via Shutterstock

Microsoft and Symantec researchers busted into two data centers in New Jersey and Virginia today to shut down servers associated with a botnet called Bamital.

The companies had an order from the U.S. District Court in Alexandria, Va., according to Reuters, allowing them to enter the data centers. Those at the New Jersey facility seized one of the servers and shut it down. Others in Virginia convinced workers to contact their Netherlands-based parent company and shut down a server there.

The botnet secretly used victim’s computers to steal advertising revenue. The victims didn’t know this was going on until their computers were suddenly unable to search the Internet. Microsoft and Symantec say those people were served with a message that read, “You have reached this website because you computer is very likely to be infected by malware that redirects the results of your search queries. You will receive this notification until you remove the malware from your computer.” It then offered ways to do so.

Bamital is believed to have infected somewhere between 600,000 and 900,000 computers. Microsoft and Symantec are confident they’ve shut down the entire botnet, but notes that only “time will tell,” according to Microsoft’s Digital Crimes Unit’s associate general counsel Richard Boscovich who spoke with Reuters.

This isn’t Microsoft’s first go-around at taking down a botnet, however. In 2011, the company took down the Kelihos botnet, which is small by comparison at on 41,000 infected computers. At the time Microsoft said, however, that the botnet was capable of sending out over 3.8 billion spam emails a day. Microsoft also named suspected perpetrators behind the botnet including a man named Dominique Alexander Piatti.

Later, in 2012, a second and bigger Kelihos botnet was found in the wild. It was subsequently shut down by Russian security firm Kaspersky Lab.

Batman image via kevin dooley/Flickr

An angel may not get its wings, but somewhere, a click sells a product, downloads a white paper, or takes some personal information. In short, some exchange of value takes place — at huge, mind-boggling scale.

Larry Kim of the web marketing firm WordStream analyzed a huge divot of Google data — which I published in infographic form earlier today. WordStream offers a free Adwords Performance Grader, which gave it access, Kim told me, to about 1 percent of Google’s revenue over the past quarter.

And the data that comes out is fascinating.

Source: WordStream

The shopping industry does a lot of ad shopping

For instance, the finance industry places 617 million ads on Google.com and 5.32 billion ads on Google’s ad network each and every day, generating 28 million clicks at the highest average cost per click of any industry: over $3 on google.com, and over $1 for ads in the network. Top five advertisers in finance include names like State Farm, Geico, and Quicken Loans.

The second most prolific industry buying Google ads is travel, where brands like Expedia, Hotels.com, and Kayak place 2.5 billion ads a day to generate over 20 million clicks at an average price of just under $0.30, and complete 360,000 sales a day.

“Different advertisers define conversions differently,” Kim told me today, so those sales include not just actual flight, rental car, and hotel bookings but also any leads generated via an ad.

But the highest conversion rates belong to the education industry, which enjoys almost three times the conversion rate of travel companies. Education advertisers such as the University of Phoenix, DeVry, and Kaplan University convert at a red-hot 6.27 percent.

30 billion ads served … a day

All those millions of click and hundreds of thousands of conversions come out of probably the biggest advertising engine in the history of the world. Between ads on its own site and ads on its network, Google delivers an astounding 29.8 billion ad impressions every single day. That’s mind-boggling.

The good news for advertisers is that Kim’s data shows that average cost-per-click has come down significantly, which is part of the reason why Google lost almost $20 billion in market value in a single morning last week. Advertisers are now paying between 16 percent and 18 percent less for clicks than they did just four months ago.

Source: WordStream

The finance industry spends a lot of green with Google

“I think that’s fantastic news,” Kim says.” “It’s not only cost-per-click going down, but also that the inventory of ad impressions is going up substantialy … it means you can get more customers for less money.”

That sounds bad for Google. But not really, he told me.

“It’s actually really good news for Google, too … even though Wall Street cheers when the cost-per-click goes up and Google gets more money from advertisers … that’s not sustainable. By increasing the available impressions and clicks and lowering the costs, more advertisers will see more value from online advertising and that will be beneficial for Google in the long run.”

One caveat: While Kim is pretty confident in the data, saying that by analyzing 1 percent of Google’s revenue he’s checking a far higher percentage than Gallup, for instance, would poll for an election preview, it’s not Google data.

So it’s possible that WordStream’s data is off. With such a large sample, however — over a billion dollars in annualized revenue — it’s not likely that it is very far wrong.

photo credit: captcreate via photopin cc