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Agloco, the pyramid scheme company that said it would pay you to surf the web, has run out of money and is about to close. The company sent a notice to its members earlier today notifying them that if someone wanted to swoop in in to save it, now is the time.

The controversial site awarded you shares for surfing the Web and signing up other people to do the same.

It is a pyramid because you also get more points the more your recruited friends use it, and their friends use it, and so on. The more you surf the Web, the more points you get, and the more stock you’ll get in Agloco.

See our earlier coverage of such web pyramid schemes here. Agloco sent out the following notice to its members earlier today:

Dear XXXX,

We would like to update you on the status of AGLOCO’s operations. We continue to believe in the AGLOCO concept, but our revenue is currently not sufficient to give Members a meaningful distribution. And though there are increases in membership, the resulting revenue is not enough to support operating costs. As a development team we are unable to continue to use our savings to fund the operations. If any Member would like to pursue continuing the operations of AGLOCO, you may contact us at agloco1@live.com .

We would like to thank every Member for supporting our effort to bring a piece of the Internet directly to the user. We hope that we can find a way to keep the operations going.

AGLOCO Development Team

(updated) Here’s the latest action:

Google’s Street View continued — More details from BoingBoing on the scary little 11-sided camera that Google and its partner are using for street-level photography shots — exposing peoples’ living rooms — including tabby cats — sunbathers in their bikinis, and some poor guy caught picking his nose.

Yahoo provides open access to its “Panama” search marketing APIs — Yahoo launches its “Commercial API,” so advertisers, developers and commercial partners will be able to build new applications and tools upon Yahoo’s search marketing technologies. Details here.

Agloco, the online pyramid scheme, launches Viewbar — We’ve written quite a bit about this company, which wants to let you make money, in the form of stock, by downloading its viewbar and surfing the Web with it. Until now, it hadn’t actually let you download the Viewbar. It has been so popular this morning we haven’t been able to get through despite multiple tries. Basically, the more you surf the Web, the more points you get, and the more stock you’ll get in Agloco. It is a pyramid because you also get more points the more your recruited friends use it, and their friends use it, and so on. Here’s our coverage of the Viewbar.

Cadence Design Systems in play — The San Jose, Calif. maker of software used to design computer chips has been in talks with buyout firms Kohlberg Kravis Roberts and the Blackstone Group, according to the NYT.

Glam strikes advertising deal with Google – Google will be the exclusive provider of search contextual ads for Glam Media, the network of online sites about woman’s fashion and lifestyle, Glam chief executive Samir Arora told VentureBeat last night. (Previous coverage of the fast-growing Glam here.)

SpaceTime3D offers 3D searching of the Web — A few companies have experimented with 3D browsing, and this is the latest effort. However, according to a review by the Mercury News’ Dean Takahashi, even this latest effort, eight years in the making, is not ready for prime time. It takes up to 30 seconds to load the feature-rich pages before you can continue scrolling, somewhat different from the company’s pitch when you arrive at its Web site: “Search at the speed of thought.” The start-up is based in New York City, and will be seeking venture capital soon, according to spokeswoman Amy Grenek.

Tesla Motors wins $561,000 – The state has awarded it money to help pay for charging stations for the electric car.

Cap and trade — California’s Arnold Schwarzenegger has started pushing the cap-and-trade program for pollution credits. The Merc has the story. It also has a piece looking at efforts by Silicon Valley leaders pushing solar power.

RockYou overtakes iLike as most popular on Facebook — On Friday, online photo widget company RockYou’s three applications — X Me, Horoscopes and Slideshows — dominated the most “recently popular” list of applications being downloaded on Facebook’s new platform. That came as RockYou paid for advertising on Facebook’s site (update: RockYou’s Lance Takuda clarifies that none of the growth came from the ads, because the ad erroneously pointed to a test version of an application not in the directory). Slide, meanwhile, promised Facebook users free beers if they added its application. Overall, though RockYou’s three main applications on Facebook now total more downloads (about 1.6 million) than that of any other company, including iLike.

Rout on Chinese market — The China stock market has fallen about 15 percent below peak over the past few days, after new tax reform was introduced.

Trivop, a video guide to hotels — Now, this is one of those obvious things. Finding decent hotel rooms is one of the most painful experiences of booking a vacation while on a budget. There’s also TVtrip, with more details here. [Update: Trivop said on June 18, 2007 it had raised 600,000 euros, from Mörten Lund, Steve and Jean-Emile Rosenblum, Oliver Jung and Lukäsz Gadowski.]

Acquisition of Feedburner confirmed — We reported this earlier. However, the official announcement is here. Mercury News story here.

Almost half of all companies going IPO are losing money — Of 84 companies having initial public offerings this year, more than 46 percent of the companies were unprofitable at the time of their listing, according to reports citing Sageworks data. That is the biggest percentage since 2000, when 71 percent were unprofitable. In part, this is because of life science companies going public, and life sciences companies tend to lose money. Jazz, for example, is the most recently, suffering from negative publicity around its drugs, as our own David Hamilton elaborated on last week.

Agloco, the company that pledges to pay you for surfing the Web, is about to deliver the download that will let you start earning credit.

The Stanford, Calif. company is leading wave of new pyramid-like companies seeking to arbitrage advertising dollars on the Web. By banding together some 700,000 people who have signed up for its service, Agloco believes it can wring out greater advertising dollars on their behalf. As it tracks the pages surfed by its members, it learns about their habits and preferences, and is able to tell advertisers more about your tastes. It says it is not disclosing information about your specific identity.

Agloco is also a pyramid, because it gives you more credit the more you surf, and for any surfing done by people you recruit, and any surfing by people they recruit, and so on. As discussed, the history of such companies is bleak, because the arbitrage opportunities tend to diminish quickly over time — though Agloco argues it is an exception because it will offer real value to advertisers and consumers. See our initial coverage here, here and here.

It said earlier it aims to sign up 10 million members by July 1, so it will need to ramp quickly to meet that goal.

In more details released this morning, Agloco said the following:

–Its Agloco.com site will go down briefly, as it moves the download system for its Viewbar to its server. The Viewbar will sit at the bottom of your screen that tracks your surfing.

–Members will be invited to download in groups of 50,000 a day for a two week period, with Members contacted in the order in which they signed up.

–Agloco Hours: “You will accrue hours in your AGLOCO Member account (current maximum is five direct hours a month). Hours are earned during active surfing on the Internet. The Viewbar has a green light on it that notifies the Member when it is accruing time. Your referrals’ surfing will accumulate hours for you at a 25% rate, meaning if one of your referrals surfs for the maximum five hours you will get 1.25 (0.25 x 5) hours credited to your total referral hours. You can only get credit referral hours up to the amount you directly surf (meaning if you surf 3 hours but a referral surfs 4, you will only get credit for the first 3 of your referral’s 4 hours). AGLOCO accrues these hours each month and also has a cumulative total of all hours earned. These hours are what AGLOCO will use to calculate cash and other distributions. The Viewbar contains a one click inactive button which turns it off and removes it from your screen at any time.”

– Initial Release for Windows only. Max/Linux coming later.

–Cash Distributions: “To be a sustainable entity in the long term, AGLOCO makes Member cash distributions from its positive cash flow (revenue minus costs). Therefore, please do not expect a check after the first couple of months as it will take time to collect revenue from advertisers and this revenue must exceed costs in order to make cash distributions to Members. We will be keeping Members informed of our financials and you can visit the Official company blog at http://blog.agloco.com for the latest updates.”

–Future features, which will update automatically, include a “direct cash back” feature when a member purchases items on sponsor site and a portion of the purchase price is added back to the member’s Agloco account (as described on the Agloco blog at http://blog.agloco.com/index.php/post35/)

Each Internet boom creates its batch of pyramid-like schemes. They cater to the lust for easy returns dominant in euphoric times.

That’s not to say they’re fraudulent. Most of these schemes are plausible on their face, and that’s their allure — and what one person believes is sham, another takes as a golden opportunity. This latest boom has given rise to a number of more innovative business models, which so far have skirted around scam, and remain quite intriguing — though still with question-marks hanging over them.

We’ve already mentioned eMax and Agloco — both promising you shares in their still unformed public companies, if you sign up with them to download a toolbar (in Agloco’s case) or submit up your favorite retailers and evangelize for them (in eMax’s case; more on eMax below). And you get rewards if you encourage others to sign up. A host of Web 2.0 companies offer contests, promising iPods and other gizmos, a way to drive up traffic numbers at their sites, usually having microns of difference from a dozen other sites. There are related jobs like Jigsaw, where you can buy and trade business cards for cash points, and which many sales people find quite useful; the list goes on.

Today we look at KushCash, an Orange County-based “mobile wallet” service that allows you to send and receive humble amounts of money with your mobile phone, and offers users the ability to make money off their friends, their friends’ friends, and their friends’ friends’ friends.

The process goes like this: First, you register your mobile phone number at KushCash’s website and create an account. This lets you download an app to your phone (or you can rely on your phone’s WAP browser). You can transfer funds with a credit or debit card, wire money to any KushCash user you choose, receive payments from fellow users, and transfer accumulated funds to your bank. You can only withdraw money by transferring it to your bank account, and waiting a few days (though KushCash plans to speed it up). Presently, the service targets the 18-34 year old demographic. So far, so good.

KushCash makes money charging for transactions. While sending money is free, receiving it or transferring it to your bank costs $0.50, and KushCash takes 2.8 percent of any money you add to your account. But thanks to its recently unveiled “Spare Change” feature, nickels and pennies start rolling in when you convince friends to sign up. With Spare Change, you get 10 percent of any of your referred friends’ future transaction costs (or 5 cents per transaction, and 0.28 percent of their amount added). If your friends are similarly intrepid in recruiting, you get 5 percent of their friends’ costs, down to the third degree of separation, from which you get percent.

If it sounds like a pyramid model, that’s because it is. But unlike an everyday scam involving some fly-by-night entity that exists only to extract money from the pockets of unwitting fools, KushCash’s pyramid is built to get people to use its core service and give them an incentive to spread the word. This is what eMax and Agloco argue too.

Jeppe Dorff, a KushCash co-founder and its CTO says the company has raised a “substantial” amount in angel funding, but wouldn’t elaborate. KushCash’s user base is in the “high double-digit thousands,” he said. He’s had offers from VCs, but has found them uninteresting, he said. Meanwhile, Kushcash’s closest competitor, Obopay, charges only $0.10 per transaction and has raised over $17M from RedPoint Ventures, Onset Ventures, Richmond Capital, and Qualcomm. Obopay is on a roll, building a stacked management team, acquiring a small competitor, and partnering up with Citi to propel itself into the world of personal finance. (Tap Blog has some good coverage of the two companies here.)

This says nothing of the threat from PayPal, which last year launched an SMS-based mobile payment service of its own, and is about to launch Mobile Checkout, an even smoother mobile payment solution.

Dorff says KushCash has some big announcements in the pipeline.

Finally, we promised to report back on eMax. This is not a prank, which we feared last month when we first wrote about the site. We reached owner Elliot Lee, and he told us a little more about his plans. Like the other site, Agloco, eMax wants to gather users together so that they can boost their purchasing power through group buys. Lee is coy in describing his strategy, because he hasn’t launched yet. The idea, he said, would be if people were to say they liked to shop at say Nordstrom, eMax would barter with Nordstrom on their behalf and get them better deals than if they were shop their alone. Similar to the way Borders gives you 25 percent off if you say, buy $500 worth of books, eMax will get retailers to offer a discount by rounding up 500 customers. Right now, though, before it launches, you can sign up and get three shares in the company. You get an extra share for each person you sign up. Founder Lee doesn’t see this as a pyramid; rather, he sees it as the most efficient way to quickly maximize the number of members. (Lee adds, humbly, that his targeted market this year is $100 billion)

Still, old-timers who have been watching the scams through the years, say they doubt the ability of some of these companies to succeed. They rely on arbitrage, which is risky: Other people enter the market doing something similar, and your advantage dwindles to naught - and you lack substance at the end of the day. There was AllAdvantage, and ClickRebates’ ClickDough, and mValue — all of which died a quick death around 2000. And in the wave before, there was PowerAgent, circa 1994-1998.

These were all viable companies at one time, just as the latest wave of companies may be. From time to time, though, it merits saying caveat emptor.

[Dan Kaplan, a contributing author at VentureBeat, helped with the reporting on KushCash]

Updated

EMax says it is a new startup in Palo Alto, Calif. launched this week by “a bunch of ex-marketing guys from PayPal,” according to a tipster. It looks like another company that promises to make you rich off the Web, if you jump on its bandwagon early.

However, there’s something fishy about it, and it may be a prank. The tipster, named “Max Levchin,” used the name of the PayPal co-founder. However, the tipster used poor English, which caused suspicion because we know Max is meticulous. We contacted the real Max, and sure enough, Max says it wasn’t him. We contacted EMax, and haven’t heard back yet. We’re wondering who Elliot Lee is, owner of the domain. [Update: VentureBeat just reached Elliot at his Palo Alto home, and he insists the site is for real, but said he doesn't know who contacted us. Strangely, he wouldn't confirm or deny being a former PayPal employee. He suddenly had to go, but said he's available to talk Wednsday. Stay tuned for second dispatch of this bizarre story]. So here’s what the site says it does:

It is very similar to Agloco, the site we wrote about here. Like Agloco, it wants to go public, and then allows you the shareholder to benefit by having public stock.

Like Agloco, it says it wants to gather users together so that they can boost their purchasing power through group buys - it pitches “instantaneous and compelling discounts at popular national chain stores, restaurants, and service providers without any of the usual sacrifices.”

If Agloco sounded a bit like a pyramid scheme, so does eMax. It offers an iPod giveaway for referring your friends to sign up.

Here is the FAQ. If nothing else, this spoof/launch will scare Agloco into finally releasing its Viewbar, which is due out any day now. It is amazing how many people fall for these things. Agloco aims to sign up 10 million people by July.

AGLOCO, the controversial site that awards you shares for surfing the Web and signing up other people to do the same, boasts that it has already signed up “tens of thousands” of members.

More striking, the company hasn’t even released its Viewbar yet, which you have to download to start earning credit with AGLOCO. Some would call the company a pyramid scheme, because AGLOCO gives you an incentive to sign up your friends to also surf the Web with AGLOCO’s Viewbar, and there is no guarantee of any financial reward for doing so — only the hope of one. (See VentureBeat’s story here.)

On the other hand, it’s not like you’re breaking your back on AGLOCO’s behalf. You simply surf the Web as you normally do, and the Viewbar operates at the bottom of your screen.

AGLOCO says 700,000 pages refer to AGLOCO in Google’s search results, and that its website is more popular than Bloomingdales or Kmart’s.

The AGLOCO Viewbar will be released in “seven to ten weeks,” the company said in statement early this morning.

Its goal is to sign up ten million members by July 1.

After some delay, and server problems, AGLOCO is now open for business.

We wrote about the service here. It is controversial because it promises to pay you to surf the Web.

VentureBeat has just signed up, deciding that we’ll give it a whirl and see if it works. We don’t mind sharing basic personal information AGLOCO asks for, because it’s the same many other sites require– and AGLOCO has promised not to pass it on.

We went to the calculator and we practically choked at the earnings it promised based on our plan (see calculator below). It said we’d “earn” 11,720 a month! That’s based on a plan of getting 12 friends to sign up, and an assumption that each of those people will sign up five people on average — and further, we assume each of these people surf an average of five hours a month (all fairly conservative).

Naturally, from the wording, we thought this meant dollars, as in $11,720. So we checked with AGLOCO spokesperson Steve de Bonvoisin, and he set us straight. It means 11,720 shares, and that’s not tied yet to any worth. So don’t get your hopes up. Still, we’d like to try this out. If any of you sign up, and you heard it here first, consider using VentureBeat’s referral ID, which is BBBB0104. It’ll help us with do accurate reporting about this company, and any money we make will be donated to a good non-profit cause. We’ll make it public when we do.

Update: The last piece of the puzzle for getting started, the ViewBar, is still not available. We’ve checked with AGLOCO, and they have not given us a date yet.

(See our update on this story here.)

AGLOCO is a controversial new Stanford-based start-up that wants to pay you to surf the Web, in return for access to your online surfing information. It launches later today (Monday).

It was discovered two weeks ago by Gigaom, which blasted it as a pyramid scheme. It is, Gigaom reported, a reincarnation of the bubble-era AllAdvantage, which PC World at the time said was one the worst sites on the Internet. AllAdvantage folded in 2001, when Web advertising dried up. (Here’s a good description of AllAdvantage.)

Gigaom’s report was based on leaked materials. AGLOCO says Gigaom misunderstood some of its intentions. Its founders sat down with VentureBeat, and explained how its model is different from AllAdvantage.

In short, AGLOCO, which stands for “A Global Community” (the company uses caps to refer to itself, despite its lowercase logo) is really a big AllAdvantage sheep in wolf’s clothing.

First, the similarities between the two: The AGLOCO team includes some of the same leaders of AllAdvantage. The model is pretty much the same, too: As with AllAdvantage, the user of AGLOCO signs up with the site, and volunteers detailed personal information, including name, email address, age, city, state, country and postal code. AGLOCO promises it won’t be transferred to a third party. The user agrees to surrender information about their traffic patterns to the site. Like AllAdvantage, AGLOCO offers a Viewbar, a browser-based bar at the bottom of your screen. The Viewbar (see below) displays targeted advertisements based on on content you’re viewing and your traffic patterns. Moreover, the user gets shares in the company for surfing the Web, and for referring others — and benefits go up the more that referee uses the Internet. The referral network goes five degrees (you refer a, a refers b, b refers c, c refers d, d refers e). This applies for any users, not just early adopters, and so the company argues this is not a “pyramid scheme.”

This targeting aspect is where AGLOCO’s latest incarnation could prove more powerful than last time (which, we note, was significant; people forget that AllAdvantage ranked among the top twenty Web sites, according to Nielsen/Netratings; it had ten million members). Better targeting technology exists today, and affiliate models are more established. Take a hypothetical example: You’re about to buy a book at Barnes & Nobles. AGLOCO will flash a note that you can get a better price at Amazon.com. That’s because AGLOCO has signed an affiliate relationship with Amazon, giving AGLOC an 8.5 percent discount on purchases. Since you’re a member, AGLOCO will pass on say, at 4.25 percentage points of that discount to you.

You win in another way, too: The other 4.25 percentage points AGLOCO keeps for itself accrues to its bottom line. Since you own AGLOCO stock, you benefit. AGLOCO wants to give its members 100 percent ownership. It is not raising any venture capital like last time (AllAdvantage raised nearly $200 million from various VCs including Alloy Ventures, Partech International, Rustic Canyon, Softbank, Technology Partners and WaldenVC). It will take ten percent of the company’s revenue for a management fee. This is worth it, says Jim Jorgensen, one of AGLOCO’s founding team. He says a group of aggressive Stanford business school graduates are negotiating deals with Amazon and other partners on your behalf.

This AGLOCO team is intriguing. Eight Stanford MBAs have joined, which is unprecedented. Many Stanford MBAs join companies before they graduate, but not a grouping this big, and especially not at a time when VCs and other companies are poaching MBAs more than they have in the past. They’re bringing fresh, eager blood to their wise but chastened forefathers who launched AllAdvantage. Jorgensen was co-founder and chief executive of AllAdvantage and is one of 15 in AGLOCO’s founding team (a formal chief executive hasn’t been appointed yet, and the group is acting like a commune, refusing to appoint a leader, or even hand out “co-founder” titles). AGLOCO has named Ray Everett-Church its chief privacy officer, the same guy who was CPO at AllAdvantage (AllAdvantage was the first company to have a CPO).

But the guys who first conceived of AGLOCO are Carl Anderson, an AllAdvantage co-founder and now a hedge-fund manager, and Dave Pidwell (pictured left), a venture partner at Alloy Partners and an early investor of AllAdvantage. Both have given seed funding to AGLOCO. Anderson posted a notice at the Stanford business school’s career center, saying he was looking for someone to start a company. MBA student Akshay Mavani responded, and helped recruit the others. Other seed investors include 4Info chief executive, Zaw Thet and several others.

Anderson and Pidwell also recruited Jorgensen, a tall slender gregarious character who is always quick with a good story. Have him tell you the one about the pre-IPO April 2000 extravaganza bash at his 5,000 square foot home on the Stanford campus. The fundraiser’s guests included President Bill Clinton, John Doerr, Frank Quattrone, all of whom joined Jorgensen at his private table. Even Clinton’s daughter Chelsea was there, with counter-snipers in the trees for security. Elon Musk, co-founder of PayPal attended. (AllAdvantage was bigger than PayPal at the time. Bank of America reported that AllAdvantage cut more checks at the time than any other company, outside of the federal government. So Musk sat at a side table.) Eric Schmidt was there. Two members of the Grateful Dead played. A few days later, in mid-April, the stock market began its free-fall, and AllAdvantage never recovered. But Jorgensen says the event underscored how the company had gained legitimacy in Washington. (Update: To clarify, the event was a Democratic fundraiser, and was not paid for by AllAdvantage.) The uproar around the company had forced AllAdvantage to seek to explain itself on Capitol Hill, and senators ended up liking it. Senator John Kerry supported AllAdvantage’s privacy model, Jorgensen says.

Even so, AGLOCO will be different in key ways, Jorgensen says. Even though AllAdvantage was at the “forefront of privacy,” Jorgensen explains, “we had no idea what we were doing.” This time, AGLOCO is more conservative, making no promises on cash payment levels. In fact, Jorgensen says it was the VCs who had encouraged large cash payments by AllAdvantage (at 50 cents/hr), which had driven the company into the red. AllAdvantage paid out $100 million to its members; a few members were earning $10,000 to $15,000 a month.

For now, AGLOCO simply says it will give members a share of profits. While AllAdvantage hired 250 engineers, AGLOCO is streamlined. It is built on open source software, with developers in China — and AGLOCO will be launching with a Chinese version of the site too. The funky management structure may become a problem, in VentureBeat’s view, because there’s no single leader taking overall responsibility.

If it’s anything like its predecessor, though, AGLOCO will be a company to watch. At launch, AllAdvantage had aimed to sign up 30,000 members within four months. But it hit that number in two days. AllAdvantage’s IPO was going to value the company at $1.2 to $1.4 billion, but it never got there. This time, AGLOCO is already working to list on the London AIM stock exchange.

Is it evil? You decide. We’re betting many people will hold their nose, and take the cash ;)

Below is screen shot of how Viewbar rests at bottom of your page: