Submitted by Kevin Ohashi on Tue, 02/01/2011 - 04:57

Posted in

The Blackmail/Extortion Business Model

Definition:

A business that has the potential to negatively influence perceptions of

another company but negotiates the information disseminated for some type of fee.

Examples (Allegedly, with sources):

Yelp

Businesses want positive reviews in one of the web's definitive guides to local

businesses. Yelp allegedly takes advantage of this (source )

by changing what reviews do or don't show based on whether you pay or not.

ComScore

Advertisers use ComScore as the definitive source for traffic statistics.

ComScore is accused of under-counting companies that do not pay their fee ($10,000!)

to get their tracking code. (source)

Better Business Bureau

Businesses get rated and consumers make complaints. The BBB makes money

from businesses subscribed to their service. It has been accused that the grading

system favors paying businesses (source).

Why it Matters:

These organizations have a reputation with the audience purchasing a service or product.

They take payment from businesses providing that service or product in order to

present information about those businesses. Exerting their power over businesses

listed in their system can increase their profits. This business model sustains

itself as long as lawsuits and legislation allow. It is one of the strongest

lock-ins available. Consumers keep using it because companies keep promoting it

because those that don't, often fail.



