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UGO ADOPTS THE EFRONT BUSINESS MODEL [Author: Lum the Mad]

As pretty much everyone knows, UGO is starting to make an annoying habit of not paying people. Starting last winter, they discovered that they didn’t actually have to meet those annoying contractual obligations, which meant that the supposedly paid-by-UGO websites joined the bandwagon of fansites with thousand-dollar monthly bills suddenly starting begging for money.

Supposedly, however, UGO was on the mend – a few weeks back, they sent out partial back payments to their affiliates, and pledged that the newly-renegotiated take-less-money-or-else contracts would be honored. Really. We promise.

Guess what! They’re renegotiating the contracts again! Assuming “you’ll take what little scraps we send you and LIKE it, you dog!” counts as negotiation. According to the webmaster of a major UGO-affiliated website who’d prefer to remain anonymous:

No one has gotten paid regularly. UGO has not gotten their money from their investors yet, the papers aren’t final. They got some bridge payments and have paid us behind schedule and sporadically. But now they don’t have any money. Right now they still owe everyone for February and March. They’re promising that the February payments will get to us next month, and March the month after that. That means we’re getting paid for March in June.

That’s part one. Part two is the kicker. As of April, UGO is no longer honoring their guaranteed CPM contracts at all. Everyone is going to revenue share. And “to maximize the amount you get, you should adopt tower ads and popup ads.”

The webmaster went on to say that there was no way in hell that he was putting up UGO tower ads and popup ads on his site. Why should he? If he wanted to put up such intrusive advertising, he could do it with Internet advertising companies who might actually pay him one day. And a lot of the higher trafficked websites, such as Evil Avatar and PvP, are doing exactly that – putting up ads by companies other than UGO, in addition to the UGO banners.

So, given all this, why in the hell do companies keep slapping inane, offensive UGO banners up on their site? I mean, it’s not like they’re actually being paid for them.

The problem is that most UGO-affiliated sites are wearing blinders and don’t want to take them off. They’re still partying like it’s 1999, and all you had to do was add dot-com to your name and people would give you money. And you had a pet flying monkey. And you could have huge, bloated, ungodly data-driven websites that covered literally every game in existence or, if you’ve really got mad skillz, just make a comfortable living reposting press releases and pictures of chicks.

And UGO is taking advantage of that, and driving the stake up their supposed client’s asses with nary a drop of lubricant to be seen. They know that they hold all the cards – that for the most part the authors of website content are usually young, almost always with no experience in the business world, and certainly with no acumen for selling advertising on their site. I mean, if they did that, they wouldn’t need UGO, would they?

But these sites need UGO, badly. They need the promise that they really can make a living at writing about games and stuff, and never have to grow up, and never have to pay the bills, and never having to believe that polite young men and women in finely tailored suits would ever lie to you.

But they are, my friends, they are. Or, if you don’t believe me, how about J “Just J” Moses, UGO’s presumably-being-paid-on-a-regular-basis CEO, as quoted in Silicon Alley Daily.

“We can aggregate the best content that is out there. We get very, very good content at an incredibly efficient price,” Moses says. “We spend very little money programming. Our costs of content, compared to costs of content of other media plays such as iVillage and About.com, they’re a fraction of what theirs are.”

Imagine that – fucking over your writers as a business model. Gee. And it worked so well for Sam Jain, too!