How one of the Internet’s largest and most secretive adware companies really operates. With new regulations coming, will it really reform?
By Brad Stone
Updated: 8:34 p.m. ET Dec. 9, 2004
Dec. 9 - In November 2000, yet another e-commerce start-up was grappling with its inevitable fate. Dash.com CEO Dan Kaufman called a meeting of most of the company’s employees in its New York City offices and stared down at the conference-room table as he delivered the bad news. “This is a day I hoped would never happen,” he said, according to an employee at the meeting. The board of directors had just agreed that the dot-com company’s prospects were dim. “Please gather your belongings and exit the building.”
Dash’s business model was ahead of its time—a prototype of what adware companies are doing today. The business asked Web surfers to download a software toolbar that tracked their Internet shopping and offered related e-commerce discounts at the point of purchase. For example, if a user was prepared to buy a book at BarnesandNoble.com, the Dash toolbar could offer a coupon for the same book at Borders. In the midst of a profligate investment environment, Dash.com raised $50 million on this idea from venture capitalists such as AT&T Ventures and the JPMorgan Investment Corp. Now it was preparing to give any leftover cash back to investors and slink off into the dot-com void. “I guess we learned a lot of expensive lessons at Dash,” says Joshua Abram, a former vice president at the company.
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