How Not To Destroy Your Online Business Instantly: The Chitika Example

Chitika eMiniMalls burst onto the online scene and dominated it quickly. They used a unique advertising display that allowed websites to place products on their site easily and get paid for people who clicked through. The Internet was on fire with website owners touting how much money they were making. They seemed to get glowing reviews everywhere and other than a few complaints on customer service they were looked very highly upon.

Chitika launched their eMiniMalls in October, 2005 and quickly displaced other forms of advertising on many a website. Some website owners even going as far as removing Google AdSense and other pay per click advertising forms from their websites in favor of Chitika. Running on a 30 day pay schedule, those who used the advertising in October would see their first revenue checks coming around the First of December, 2005 at the latest.

Days before the revenue checks were to be cut, Chitika announced that it was going to do an audit of clicks and that some publishers could see their revenue down a bit from what had been reported throughout the month. On December 1 Chitika implemented the auditing and the results were a bombshell that is bound to destroy the company. There was a firestorm around the Internet of some publisher's revenue being cut in the audit by as much as 90%.

Word spread quickly around the web and there was a huge backlash that the company is probably not going to recover from. Website owners around the web removed Chitika from their websites vowing to never deal with the company again and posting vicious and negative reviews of the company everywhere, such as those found at Inside Online Advertising.

Reputation for a business is the most crucial thing to lose. With a lot of consumers and clients you only get one chance. Chitika will probably not recover from this huge mistake of not making sure that their systems were working properly and that the promises they made to publishers from the start would be honored. Don't make this mistake yourself when starting your business. Look ahead and plan before you start signing contacts and making promises.


About the Author
Copyright Dan Amato

Dan Amato lived through the dot-com boom and bust in Santa Clara, CA. He is the co-founder of numerous companies from the ground up and currently maintains http://www.startuphints.com, a free resource for those starting a new business. He can be contacted on his blog at http://www.diggersrealm.com.