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2/9/01
Babenet aka GoHip aka Netbroadcaster and its principles Andy Garoni,
Nolan Quan, Robert Gould, Sanger Robinson and Justin Hirsch...
In 1997, Babenet's Rob Gould stole his "rock'n'rollers" payout system
from Cybererotica (CE), shortly after going to a long lunch with CE's
Ron Levi and learning how Levi ran CE's webmaster program. Babenet's
"Rockn'rollers" affiliate program ripped Luke off for about
$1500 in late 1997 and I've heard other complaints from webmasters about
Babenet's deceptive practices.
Frank writes Luke: Babenet and NetBroadcaster, GoHip, AlchemyFx and others
are all the same people. Andy Garoni, Nolan Quan, Robert Gould, Sanger
Robinson, Justin Hirsch. Porn guys in their latest attempt in a legitimate
company. All porn traffic gets redirected to NetBroadcaster. Please take
a look into this. I hope they don't get away with murder again.
Mutt writes on Netpond: what's your point about NetBroadcaster.com Luke?
They can do whatever they want with their porn traffic. Lots of porn companies
at the end of their attempts to get a surfer to buy porn send them to
non-adult sites. Looks like they ripped off the guys from VoyeurDorm's
idea though. If they went public or brought in investors based on false
claims about where all that traffic came from then they would be looking
for trouble.
Nunya writes: The company that owns VoyeurDorm has a very similar web
venture to NetBroadcaster.com. I can't remember the name of the site but
if you go to VoyeurDorm and then leave eventually it will pop a console
[Trafficco.com] with that site in it. Streaming non-adult videos.
Netbroadcaster: An Entertainment Portal with the Eyeballs,
But Not the Hype
by Ben Fritz ben.fritz@digitalcoastreporter.com
Netbroadcaster doesn't have any high-profile VC backers, a 310 phone
number, or even more employees than a person has fingers. What it does
have, though, are numbers most sites, especially those in the entertainment
space, would kill for: two million registered users, over 3.6 million
unique visitors in December, according to Jupiter Media Metrix, and a
balance sheet that has been in the black for nine months.
Sanger P. Robinson started Netbroadcaster with aspirations no loftier
than taking advantage of an opportunity to become a Hollywood player.
Two years ago, he simply saw the Internet as a way to break into the incredibly
insulated Hollywood community-- and jumped on it.
It's that kind of inexpensively acquired content, along with movie and
TV clips from the public domain, which made up the bulk of Netbroadcaster's
initial content. But with virtually no marketing budget, it was left to
what Chief Creative Officer Sean Costello admits was a "stupid film" to
give Netbroadcaster a name.
What
Is Hip? Not GoHip.com
From Wired.com 2/25/00:
Need a souped-up video browser for your PC? You may not want to download
it from GoHip.com. According to Internet security firm Finjan Software,
Internet search engine GoHip is distributing an ActiveX control download
that automatically modifies several components on a user's PC -- including
one that adds a GoHip signature to every piece of outgoing email.
Finjan fingered GoHip in its "malicious code alert" when a user went
to the site's free video page. Basically, when a user accepts the terms
of the Windows video browser download, an executable file is copied to
that user's system and is executed automatically.
All of a sudden, GoHip.com becomes the user's homepage, and his email
has a brand new signature that reads: "Click here for Free Video!! http://www.gohip.com/freevideo/."
A close look at the software agreement's fine print reveals that GoHip
warns the user of the changes. But duped customers say they don't have
time to read the fine print, and say they shouldn't have to.
But according to Finjan marketing director David Kroll, this is the first
time a company has used ActiveX to alter personal information on someone's
computer.
"I think it's pretty tacky what they did," he said. And what's more,
he says, it means that other companies or vandals can do even more dangerous
things with ActiveX. "You could download a Trojan that will activate ActiveX
and it could deliver Back Orifice or a worm," he said.
And because ActiveX automatically slips a file in the Windows startup
folder, the changes are reinstalled each time the system is started. "It
would run automatically and you'd never even know it was there," Kroll
said.
GoHip does not have a listed telephone number and could not be reached
for comment. The Beverly Hills, California-based company fields calls
to a customer service line, which directs customers to an email address
at videoupdate@gohip.com.
[Editor's note: In the original version of this story published February
25, the email address was identified as "videoupdates@gohip.com," which
was invalid. GoHip contacted Wired News about the error on March 14.]
Calls to Justin Hirsch, the site's contact filed with Network Solutions,
reached an answering service that does not know the name of Hirsch's company
and forwards his calls to a voice mail. Messages left there were not returned.
A public records search discovered that Hirsch is involved with several
Internet companies, all registered at the same street address in Chatsworth,
California. Among the companies is Babenet, Ltd., and under GoHip's adult
category section, Babenet is the first site listed. Other companies associated
with Hirsch include BigWebTools, a company that claims to be an Internet
marketing firm.
A search for BigWebTools on GoHip calls up links that direct users to
hard-core sex sites, many of which are based in Japan and Russia.
At the BigWebTools site, there is testimony from a "Robert Molder" of
RMI Networks, who says of BigWebTools, "Calling them was the best business
decision we've made since we started our company." But a spokesman from
Chicago-based RMI Networks says he's never heard of BigWebTools or Robert
Molder.
Babenet and BigWebTools both have the same telephone number that reaches
Justin Hirsch's answering service. Calls to Alchemy Communications, the
Los Angeles-based company that hosts GoHip's site, were not returned.
Alchemy lists the site at the top of its "featured clients" page. "Discover
GoHip!" the site reads, "and change your life on the Web."
Exactly, says Dahl, one of GoHip's dissatisfied users. "I compliment
GoHip for a fine marketing effort as I certainly know who they are. I
hate them, but I know who they are," he said.
Russ Hampshire's VCA
- Babenet Goes Public Through Backdoor?
3/24/00
Mark writes Luke: A publicly-traded company just announced a merger with
a company called StreamMagic, with a president named Nolan Quan. Speculation
is that Quan's business needed to do a funny reverse-merger deal because
they are in the porn business and can't go public any other way.
Luke says: A few months ago, I sent
Metro's public trading status on NASDAQ up in flames. My coverage
on this story will probably blow up StreamMagic and its attempt to take
VCA-Babenet public.
It looks like this fancy merger is a backdoor way for Russ
Hampshire's VCA and Babenet operations to become publicly traded.
Rob Spallone phoned me Friday morning Australian time and asked to cut,
or at least tone down, this story.
Ulmers writes on Yahoo StreamMagic posting board: It looks pretty solid.
I'm only doing research at Network Solutions (www.networksolutions.com)
and I'm able to cross reference admin. contacts and company names. It
looks like Streammagic.com aka Alchemy Communications has connections
with White Sands Communications, Inc. and VCA Interactive. Collectively,
they run a bunch of porn sites including- MENWITHANIMALS.COM, TRANNIHARDCORE.COM,
TEENCORE.COM, ADULTXXXTV.COM, VCAXPLICIT.COM, WETFACES.COM, FUC-KAVISION.COM,
GAYTEENCORE.COM, ADULTNEWSSTAND.COM there's quite a few more that aren't
as 'colorful' that I didn't list. People at White Sands have VCA email
addresses, and people at VCA have Alchemy email addresses. It's all one
big happy PORN family.
VKS writes on Yahoo: Okay, let me summarize the speculation I have been
hearing for months, and then give my (long!) analysis of the deal: First,
I was told that a group of investors in LA who were heavily invested in
(highly profitable) porn-related internet businesses were seeking to use
Qsound to leverage their way into a public offering. Apparently, every
time the stock dropped near 2, they were buying, and when it rose well
above, they would sell out and then use the funds to buy more stock when
it dropped. I DO NOT KNOW IF THIS GROUP WAS ASSOCIATED WITH STREAMMAGIC,
and I can find no list of clients at the StreamMagic site.
Second, there were rumors flying about for the past 60 days or more,
that Qsound's president wanted to "spin off" the internet e-commerce business
(Qcommerce) because the market did not seem to value it the same way that
the market values other internet e-commerce "business to business" ventures.
Now, we see a bizarre merger, in which Qsound will MORE THAN DOUBLE its
outstanding shares (there are currently 26.5 million outstanding shares,
with an identical quantity of shares being used to fund the "purchase"
of StreamMagic, PLUS another 5 million being given as options to StreamMagic's
option holders). This is a shift of control to the people who own stock
in StreamMagic.
What do Qsound shareholders get? If the plan proceeds as announced, each
Qsound shareholder would hold shares in THREE separate "publicly-traded"
stocks:
- one is essentially Qsound itself (its non-internet 3D audio business,
which was the entire company in 1997), including the license fees from
stereo and hearing aid companies;
- second is the Qcommerce (e-commerce) business (including Virtual Spin
which was acquired a year ago, plus the AffiliateDirect functions which
Qsound's internal development project);
- third is StreamingMagic, combined with Qsound's "internet audio" software.
Note that the StreamMagic investors don't get the first two stocks, which
are spun off to existing Qsound shareholders only (although I assume that
some key StreamMagic investors and perhaps the company itself may already
hold substantial shares in Qsound). All they get is ONE-HALF of the equity
they previously owned in the StreamMagic business, plus one-half equity
in the Qsound "internet audio" software.
The question I have is, why would any StreamMagic shareholder want to
do this deal? The only answer I can think of: they want to be a public
company, and they don't think they can do it any other way. The only "legitimate"
reason I can think of for shedding so much equity to get public, is that
the company doesn't think the market would buy into an IPO, which brings
me back to my initial suspicion that StreamMagic MIGHT be the "porn" company
that was rumored to be seeking to take over Qsound earlier this year.
Historically, the stock market has resisted any effort to take any company
public if it makes its money from pornography or sex. If this is the case,
then there may be some doubt about the market agreeing to value the StreamMagic/Qsound
merged stock at any premium. The StreamMagic site lacks any detail such
as a client list, and the private company has (quite reasonably) not yet
disclosed any data about its source of revenue that could help clarify
the issue,
Bottom line: the idea of spinning off Qcommerce may have some "edge"
since it would seem to create an opportunity for a "pure internet play"
with appropriate market valuations -- though the spinoff will need to
disclose its revenues and expenses, which are not currently separated
from Qsound's other business units. Also, bringing back a "pure audio
technology" stock for "old-time" Qsound shareholders to hold, may allow
that business to focus on its technology without the recent distractions
of internet business speculation, which might be a good thing.
(I have never held any shares of Qsound stock, and I do not plan to buy
any stock, nor to sell it short nor trade any options. This one is way
too volatile and speculative for my tastes.)
Ulmer: Streammagic.com is owned by a company called Alchemy Communications.
If you go to the Network Solutions web site, and do a domain name look
up for Alchemy Communications, they own a number of domains including-
ADULTSEXXXMALL.COM
Luke: Here are my notes about Nolan Quan:
Following the 1986 Meese Commission, federal agents traveled to the Bible
Belt to seek obscenity convictions against California pornographers like
Carriere. The definition of obscenity since the Supreme Court's 1973 Miller
ruling has been whether the average person, applying the standards of
his community, finds the work lacks serious value and appeals to prurient
interests. Rural areas tend to have more conservative values than urban
ones. The feds eventually convicted 20 pornographers, sending many to
jail, and collecting millions of dollars in fines.
"It's a holocaust," porn attorney John Weston told the LA Times. He accused
the government of seeking to destroy "an entire genre" of entertainment.
In September 1991, a federal grand jury in Oxford, MS, indicted the owner
of Vivid Video, Steven Hirsch, for Interstate Transportation of Obscenity
and conspiracy to avoid taxes. In a plea bargain, Vivid forfeited $500,000
to the government, and toned down their product.
In late 1991, Russell James Hampshire, along with his company VCA and
his employees Nolan Quan and Don Diekman were charged with Interstate
Transportation of Obscenity. In a plea bargain, Russ served a year in
jail and his company forfeited two million dollars.
In 1992, Carriere and his company agreed to pay $3.5 million in his fines,
which his lawyer called a record, after an obscenity conviction in Tallahassee,
Florida.
Luke: Here's a March 21st press release:
CALGARY--(BUSINESS WIRE)--March 21, 2000-- QSound Labs, Inc. (NASDAQ:QSND
- news), the leading provider of enhanced Internet audio solutions announced
today that it has signed a letter of agreement to acquire 100% of Los
Angeles based StreamMagic, Inc., a leading provider of Internet video
streaming, in a stock-for-stock transaction valued today at approximately
$100 million.
The combination of QSound's enhanced audio and StreamMagic's broadband
video delivery solutions will enable content publishers to deliver rich
media via the Internet in a cost effective manner. With access to high
speed Internet connectivity on the rise - T1 lines and home-based DSL
- end users are being drawn to sites that offer high quality audio and
video streaming on a full time basis. QSound will empower clients to capitalize
on the ``impulsive'' nature of the Internet by providing ``on demand''
enhanced audio and video, live Webcasts and high end interactive advertising
- leading to increased site traffic, enduser satisfaction and increased
revenue.
``The formation of this merger could not be more timely,'' stated Nolan
Quan, President of StreamMagic. ``Content providers are constantly seeking
better ways to present their media rich content on the Web. When we first
met with QSound, we were amazed by the high quality sound they could generate
from two computer speakers. With demand for audio and video content on
the Internet increasing daily we knew immediately this was the perfect
match for our world class video and content delivery service.''
Glory writes on a Yahoo message board about Stream Magic: "Who wants
to invest in a company which freely associates itself with questionable
characters? As previous posts pointed out, Stream Magic's management have
ties (worked) in the porn industry. Maybe it's ok with the hardcore (pun
intended) qsnd holders on this board but todays action should tell you
what the majority of investors think about this association. I'm done
with this board. Have a nice life."
Wmf writes: 3213 In the conference call Nolan was asked the following:
1. Who are SM's customers? His reply was he can't disclose them since
a disclosure agreement has been signed but he named Warner Bros. 2. Another
question was about who own SM? His answer was approx. 100 persons, Employees,
Consultants, and some private investors.
Pete writes that QSND will get killed: It's not the porn issue I have
no problem with the porn industry The problem is that QSND is misleading
the shareholders If they said yesterday that they are acquiring a porn
company, I would have doubled my position instead of liquidating my position
The stock would probably be 10-15 dollars right now if they would have
said. Hey everybody...we're buying a company that specializes in streaming
porn, which I'm sure is the most highly viewed streaming content on the
internet
Doodoo: The porn thing is hurting. We're down...and the merger is *supposed*
to be good news. Sorry, but it looks like the shareholders are deciding
for themselves...
Luke says: When I helped break the story about Noal Quan's porn background,
it threatened his stock. A host of people rose up to defend Nolan but
Pete writes: I didn't want to believe this crazy statement the first time
I heard it I figured, just another basher making up rumors But these guys
actually posted real information, real links and real articles THERE IS
NO DENYING THOSE ARE TRUE check them out yourself If you just try to discredit
this information without checking it out, that shows your ignorance I'm
a QSND stockholder for over 1 year , but I just sold everything this morning.
When this story gets out the stock will get killed I wish I would have
known this before I went on the conference call yesterday Good luck to
those still holding.
Vks writes Mar 21: Earlier this evening, several posts detailed evidence
suggesting that StreamMagic's entire business is built around internet
pornography, and that connection was not disclosed but is only very thinly
disguised. As soon as these posts were made, a sudden rush of "rah-rah"
posts began to appear, in an apparent effort flood the board and hide
the earlier content from view (the PR people call it "Flushing the top
40").
Doodoo writes: From the research posted, it appears as though streammagic.com
is owned by Alchemy Communications, a company that runs at least one porn
site, and who has close ties with two other companies that are heavily
involved with the porn industry. This is bad! Marketing defined is how
a company views its customers, and how the customers view the company.
How are the customers (and shareholders) going to view Qsound when they
have a porn moniker attached to their good name? This is a marketing nightmare.
Mark writes Luke: You mention someone named Nolan Quan (as an employee
of a porn internet company charged with interstate obscenity) an an article
you posted at http://www.4porn.net/index75.html and http://www.4porn.net/a80.html
-- now the same name has just come up in a context that you might find
intriguing (and which might create some publicity for you and your book).
A publicly-traded company just announced a merger with a company called
StreamMagic, with a president named Nolan Quan. Speculation is that Quan's
business needed to do a funny reverse-merger deal because they are in
the porn business and can't go public any other way. If this is the same
Nolan Quan, and StreamMagic is actually in the porn business, then I think
the business/financial media might be interested -- if there was some
way to confirm it.
See http://biz.yahoo.com/bw/000321/qsound_lab_1.html (press release)
and http://post.messages.yahoo.com/bbs?action=m&board=8729390&tid=qsnd&sid=8729390&mid=3090&n=1
(a pseudonymous Yahoo message board post referring to your article)
See also http://messages.yahoo.com/bbs?action=m&board=8729390&tid=qsnd&sid=8729390&mid=3086
and http://messages.yahoo.com/bbs?action=m&board=8729390&tid=qsnd&sid=8729390&mid=3087
(the latter two are message board posts discussing the merger of Qsound
and StreamMagic).
[Late 2000 update - The Qsound - Streammagic merger fell through.]
Hey
Babenet, Wanna Call Chad?
From Wired.com 4/14/00:
Now the only company left that will admit to hosting the adult smorgasbord
known as Adultbuffet is Flying Crocodile, a Seattle company that hosts
60,000 adult sites. Flying Crocodile CEO Andrew Edmond said Adultbuffet
isn't doing anything wrong, and said about 15-20 percent of the adult
sites out there are now using dialers as an alternative payment. Dialers,
he said, represent anywhere from a $60-110 million business annually.
They're a natural solution to the problem of online credit card fraud.
Edmond said the adult sites receive about 80 percent of the revenue generated
by the long-distance phone calls to Chad. Chad gets the other 20 percent.
"In the early days we were made to look very, very, very bad," Edmond
said. "We want to bring value to the industry."
Also doing its bit to bring value to the $1.8 billion industry is Babenet.com,
a company based in Beverly Hills, California that owns hundreds of adult
websites. Several customers have linked a dialing program, called FreeSex_live.exe,
back to Babenet.
Laurie Swenson of Crookston, Minnesota, said she ended up with FreeSex_live.exe
by leaving her 13-year-old son alone with the computer. She only discovered
that he had downloaded the dialing software when she logged onto the Internet
and found that her home page, search engine, and email signature had been
hijacked by a site called GoHip.com. Another user who wished to remain
anonymous said he "was cruising the curious path, you know, the 'free
passwords' sites" when he ended up with GoHip all over his computer and
FreeSex_live.exe in his hard drive.
GoHip.com and Babenet.com are both hosted by Alchemy Communications.
Alchemy Communications once featured GoHip.com at the top of its "featured
clients" page, but has since removed all traces of the company from its
site. Calls to Alchemy's president, Nolan Quan, were not returned. But
Robert Gould, a spokesman for Alchemy, GoHip, and Babenet, said he had
never heard of the freesex_live.exe program, and kept a close eye on Babenet.
"I watch what they do and how they do it," he said. "If Babenet was doing
that, I would certainly have a problem."
(Editor's Note: In the original publication of this story on April 14,
Nolan Quan was incorrectly identified as the president of Babenet. In
fact, he is the president of Alchemy Communications. John Gallagher is
the president of Babenet, according to documents filed with the California
Secretary of State. Wired News regrets the error.)
4/3/01
Skitz writes on Netpond: Just got this spam from the thieving lying sacks
of s--- at Babenet.... are they out of business now?
"You are receiving this exclusive promotion from Multinet Communications
Worldwide Limited ("MCWL"), successor to the Babenet Webmaster programs."
LOL like all other worthless bulls--- spam, it says "THIS IS NOT AN UNSOLICITED
EMAIL!" ... and also says "reply to this email" to have your name removed....
of course, in typical BabeNet fashion, the replied-to email gets kicked
back. LOL Babenet... no matter what name you call yourselves, you STILL
suck, and always will!
Babenet - the Michael Jordan of scammers
2002-10-25 13:30:54
Mutt writes on Oprano.com: "LegalNudeTeens.com. Babenet are like the Michael
Jordan of scammers. Quite brilliant but still scum. Anybody know anything
about Babenet? How much of it is owned by VCA Pictures the porn video
company?"
John writes: Babenet are scammers. I remember reading stuff on your old
site about some shady stock deals they were involved in with some company
listed on a Canadian stock exchange. They also owned some mainstream stuff
like BigMailBox.com and IHip or GoHip or whatever it was called, they
are major spammers. Babenet is based in LA right? The site the spam was
promoting - I looked at the domain registration on it and it was in England.
Looks like they've set up shop probaby.
I just got some spam from Babenet. It led to a website which followed
exactly the formula that the guy Bruce Chew used running Crescent's operation.
In fact some of the sites which started loading on exit popup windows
looked a helluva lot like the old Crescent stuff. Maybe he's working for
them now or maybe they're just taking his scam and running with it. It
was the same stuff - the email led to a site that is absolutely free they
say - then you are asked to give them your email and name to get completely
free access to this great porn site - when you finish doing that you get
taken to another page where they go to great lengths to tell you 'YOUR
CREDIT CARD WILL NEVER BE BILLED FOR THIS' - but of course there it is,
a form box to fill in your credit card number, remember they have already
collected your email address a page earlier - so at this point you are
on the page telling you that your credit card will never be billed that
they need it only for age verification - underneath in small print is
a whole deal about another premium site that you are under no obligation
to remain a member of that charges i think 39.95 but they don't give you
any opportunity before you input your credit card number to opt out of
that premium site membership.
I am assuming that your credit card gets nicked unless you cancel the
membership yourself and lord knows I am sure they make make cancelling
that membership as hard as hell, if not almost impossible. Even funnier
is that if u go back and check your email they send you a fake username:password
for the original site where they asked for your email, there is no real
username:password. When you click the link, you are taken to a page for
ExxxtasyMail and are told you have now confirmed that you are double optin
mail subscriber. There is no link on the page into the great free porn
site the original spam was promoting - just three or four links to more
free porn which are in reality links to 'Lifetime Bucks' affiliate program
websites. So from one email promising some free porn site offer - they've
now got you for 39.95 joined to a paysite the average surfer idiot might
think he is getting for free, plus they've got another confirmed optin
subscriber to their ExxxtasyMail spam operation, which is sold and resold
a hundred times over.
This is nothing new, webmasters and surfers have seen it a thousand times
before. On the exit popup window chain sites the same types of sites that
were part of Crescent's exit chain - 'Dating Personals' site, a 'Chat'
site etc The whole thing really was an almost identical copy of Chew's
scam. Cept this one was even better cuz of the trick where they confirm
you as a double optin subscriber to their email program. Chew never had
that trick plus the 'fake username:pass" trick hadn't been used back when
Chew was running Crescent's operation. You don't hear anything from Babenet
anymore, I don't think they sell content anymore, if they do nobody is
buying it. And I think their affiiate program died a long time ago. Why?
Cuz webmasters got burned by them. And frankly when you're running the
kind of spam operation they are and probably lots of private traffic trades
where they send the same lambs to slaughter to another operator doing
the same sh-t why would anybody pay out big money, 30-40 dollars per signup
to all us smaller webmasters?
Frank writes: Babenet and NetBroadcaster, GoHip, AlchemyFx and others
are all the same people. Andy Garoni, Nolan Quan, Robert Gould, Sanger
Robinson, Justin Hirsch. Porn guys in their latest attempt in a legitimate
company. All porn traffic gets redirected to NetBroadcaster.
Mutt writes on Netpond: what's your point about NetBroadcaster.com? They
can do whatever they want with their porn traffic. Lots of porn companies
at the end of their attempts to get a surfer to buy porn send them to
non-adult sites. Looks like they ripped off the guys from VoyeurDorm's
idea though. If they went public or brought in investors based on false
claims about where all that traffic came from then they would be looking
for trouble.
Netbroadcaster: An Entertainment Portal with the Eyeballs, But Not the
Hype
by Ben Fritz ben.fritz@digitalcoastreporter.com
Netbroadcaster doesn't have any high-profile VC backers, a 310 phone number,
or even more employees than a person has fingers. What it does have, though,
are numbers most sites, especially those in the entertainment space, would
kill for: two million registered users, over 3.6 million unique visitors
in December, according to Jupiter Media Metrix, and a balance sheet that
has been in the black for nine months.
Sanger P. Robinson started Netbroadcaster with aspirations no loftier
than taking advantage of an opportunity to become a Hollywood player.
Two years ago, he simply saw the Internet as a way to break into the incredibly
insulated Hollywood community-- and jumped on it.
It's that kind of inexpensively acquired content, along with movie and
TV clips from the public domain, which made up the bulk of Netbroadcaster's
initial content. But with virtually no marketing budget, it was left to
what Chief Creative Officer Sean Costello admits was a "stupid film" to
give Netbroadcaster a name.
What Is Hip? Not GoHip.com
From Wired.com 2/25/00:
Need a souped-up video browser for your PC? You may not want to download
it from GoHip.com. According to Internet security firm Finjan Software,
Internet search engine GoHip is distributing an ActiveX control download
that automatically modifies several components on a user's PC -- including
one that adds a GoHip signature to every piece of outgoing email.
Finjan fingered GoHip in its "malicious code alert" when a user went to
the site's free video page. Basically, when a user accepts the terms of
the Windows video browser download, an executable file is copied to that
user's system and is executed automatically.
All of a sudden, GoHip.com becomes the user's homepage, and his email
has a brand new signature that reads: "Click here for Free Video!! http://www.gohip.com/freevideo/."
A close look at the software agreement's fine print reveals that GoHip
warns the user of the changes. But duped customers say they don't have
time to read the fine print, and say they shouldn't have to.
But according to Finjan marketing director David Kroll, this is the first
time a company has used ActiveX to alter personal information on someone's
computer.
"I think it's pretty tacky what they did," he said. And what's more, he
says, it means that other companies or vandals can do even more dangerous
things with ActiveX. "You could download a Trojan that will activate ActiveX
and it could deliver Back Orifice or a worm," he said.
And because ActiveX automatically slips a file in the Windows startup
folder, the changes are reinstalled each time the system is started. "It
would run automatically and you'd never even know it was there," Kroll
said.
GoHip does not have a listed telephone number and could not be reached
for comment. The Beverly Hills, California-based company fields calls
to a customer service line, which directs customers to an email address
at videoupdate@gohip.com.
[Editor's note: In the original version of this story published February
25, the email address was identified as "videoupdates@gohip.com," which
was invalid. GoHip contacted Wired News about the error on March 14.]
Calls to Justin Hirsch, the site's contact filed with Network Solutions,
reached an answering service that does not know the name of Hirsch's company
and forwards his calls to a voice mail. Messages left there were not returned.
A public records search discovered that Hirsch is involved with several
Internet companies, all registered at the same street address in Chatsworth,
California. Among the companies is Babenet, Ltd., and under GoHip's adult
category section, Babenet is the first site listed. Other companies associated
with Hirsch include BigWebTools, a company that claims to be an Internet
marketing firm.
A search for BigWebTools on GoHip calls up links that direct users to
hard-core sex sites, many of which are based in Japan and Russia.
At the BigWebTools site, there is testimony from a "Robert Molder" of
RMI Networks, who says of BigWebTools, "Calling them was the best business
decision we've made since we started our company." But a spokesman from
Chicago-based RMI Networks says he's never heard of BigWebTools or Robert
Molder.
Babenet and BigWebTools both have the same telephone number that reaches
Justin Hirsch's answering service. Calls to Alchemy Communications, the
Los Angeles-based company that hosts GoHip's site, were not returned.
Alchemy lists the site at the top of its "featured clients" page. "Discover
GoHip!" the site reads, "and change your life on the Web."
Exactly, says Dahl, one of GoHip's dissatisfied users. "I compliment GoHip
for a fine marketing effort as I certainly know who they are. I hate them,
but I know who they are," he said.
3/24/00
Mark writes: A publicly-traded company just announced a merger with a
company called StreamMagic, with a president named Nolan Quan. Speculation
is that Quan's business needed to do a funny reverse-merger deal because
they are in the porn business and can't go public any other way.
Ulmers writes on Yahoo StreamMagic posting board: It looks pretty solid.
I'm only doing research at Network Solutions (www.networksolutions.com)
and I'm able to cross reference admin. contacts and company names. It
looks like Streammagic.com aka Alchemy Communications has connections
with White Sands Communications, Inc. and VCA Interactive. Collectively,
they run a bunch of porn sites including- MENWITHANIMALS.COM, TRANNIHARDCORE.COM,
TEENCORE.COM, ADULTXXXTV.COM, VCAXPLICIT.COM, WETFACES.COM, FUC-KAVISION.COM,
GAYTEENCORE.COM, ADULTNEWSSTAND.COM there's quite a few more that aren't
as 'colorful' that I didn't list. People at White Sands have VCA email
addresses, and people at VCA have Alchemy email addresses. It's all one
big happy PORN family.
VKS writes on Yahoo: Okay, let me summarize the speculation I have been
hearing for months, and then give my (long!) analysis of the deal: First,
I was told that a group of investors in LA who were heavily invested in
(highly profitable) porn-related internet businesses were seeking to use
Qsound to leverage their way into a public offering. Apparently, every
time the stock dropped near 2, they were buying, and when it rose well
above, they would sell out and then use the funds to buy more stock when
it dropped. I DO NOT KNOW IF THIS GROUP WAS ASSOCIATED WITH STREAMMAGIC,
and I can find no list of clients at the StreamMagic site.
Second, there were rumors flying about for the past 60 days or more, that
Qsound's president wanted to "spin off" the internet e-commerce business
(Qcommerce) because the market did not seem to value it the same way that
the market values other internet e-commerce "business to business" ventures.
Now, we see a bizarre merger, in which Qsound will MORE THAN DOUBLE its
outstanding shares (there are currently 26.5 million outstanding shares,
with an identical quantity of shares being used to fund the "purchase"
of StreamMagic, PLUS another 5 million being given as options to StreamMagic's
option holders). This is a shift of control to the people who own stock
in StreamMagic.
What do Qsound shareholders get? If the plan proceeds as announced, each
Qsound shareholder would hold shares in THREE separate "publicly-traded"
stocks:
- one is essentially Qsound itself (its non-internet 3D audio business,
which was the entire company in 1997), including the license fees from
stereo and hearing aid companies;
- second is the Qcommerce (e-commerce) business (including Virtual Spin
which was acquired a year ago, plus the AffiliateDirect functions which
Qsound's internal development project);
- third is StreamingMagic, combined with Qsound's "internet audio" software.
Note that the StreamMagic investors don't get the first two stocks, which
are spun off to existing Qsound shareholders only (although I assume that
some key StreamMagic investors and perhaps the company itself may already
hold substantial shares in Qsound). All they get is ONE-HALF of the equity
they previously owned in the StreamMagic business, plus one-half equity
in the Qsound "internet audio" software.
The question I have is, why would any StreamMagic shareholder want to
do this deal? The only answer I can think of: they want to be a public
company, and they don't think they can do it any other way. The only "legitimate"
reason I can think of for shedding so much equity to get public, is that
the company doesn't think the market would buy into an IPO, which brings
me back to my initial suspicion that StreamMagic MIGHT be the "porn" company
that was rumored to be seeking to take over Qsound earlier this year.
Historically, the stock market has resisted any effort to take any company
public if it makes its money from pornography or sex. If this is the case,
then there may be some doubt about the market agreeing to value the StreamMagic/Qsound
merged stock at any premium. The StreamMagic site lacks any detail such
as a client list, and the private company has (quite reasonably) not yet
disclosed any data about its source of revenue that could help clarify
the issue,
Bottom line: the idea of spinning off Qcommerce may have some "edge" since
it would seem to create an opportunity for a "pure internet play" with
appropriate market valuations -- though the spinoff will need to disclose
its revenues and expenses, which are not currently separated from Qsound's
other business units. Also, bringing back a "pure audio technology" stock
for "old-time" Qsound shareholders to hold, may allow that business to
focus on its technology without the recent distractions of internet business
speculation, which might be a good thing.
(I have never held any shares of Qsound stock, and I do not plan to buy
any stock, nor to sell it short nor trade any options. This one is way
too volatile and speculative for my tastes.)
Ulmer: Streammagic.com is owned by a company called Alchemy Communications.
If you go to the Network Solutions web site, and do a domain name look
up for Alchemy Communications, they own a number of domains including-
ADULTSEXXXMALL.COM
.........
Following the 1986 Meese Commission, federal agents traveled to the Bible
Belt to seek obscenity convictions against California pornographers like
Carriere. The definition of obscenity since the Supreme Court's 1973 Miller
ruling has been whether the average person, applying the standards of
his community, finds the work lacks serious value and appeals to prurient
interests. Rural areas tend to have more conservative values than urban
ones. The feds eventually convicted 20 pornographers, sending many to
jail, and collecting millions of dollars in fines.
"It's a holocaust," porn attorney John Weston told the LA Times. He accused
the government of seeking to destroy "an entire genre" of entertainment.
In September 1991, a federal grand jury in Oxford, MS, indicted the owner
of Vivid Video, Steven Hirsch, for Interstate Transportation of Obscenity
and conspiracy to avoid taxes. In a plea bargain, Vivid forfeited $500,000
to the government, and toned down their product.
In late 1991, Russell James Hampshire, along with his company VCA and
his employees Nolan Quan and Don Diekman were charged with Interstate
Transportation of Obscenity. In a plea bargain, Russ served a year in
jail and his company forfeited two million dollars.
In 1992, Carriere and his company agreed to pay $3.5 million in his fines,
which his lawyer called a record, after an obscenity conviction in Tallahassee,
Florida.
Here's a March 21st, 1999 press release:
CALGARY--(BUSINESS WIRE)--March 21, 2000-- QSound Labs, Inc. (NASDAQ:QSND
- news), the leading provider of enhanced Internet audio solutions announced
today that it has signed a letter of agreement to acquire 100% of Los
Angeles based StreamMagic, Inc., a leading provider of Internet video
streaming, in a stock-for-stock transaction valued today at approximately
$100 million.
The combination of QSound's enhanced audio and StreamMagic's broadband
video delivery solutions will enable content publishers to deliver rich
media via the Internet in a cost effective manner. With access to high
speed Internet connectivity on the rise - T1 lines and home-based DSL
- end users are being drawn to sites that offer high quality audio and
video streaming on a full time basis. QSound will empower clients to capitalize
on the ``impulsive'' nature of the Internet by providing ``on demand''
enhanced audio and video, live Webcasts and high end interactive advertising
- leading to increased site traffic, enduser satisfaction and increased
revenue.
``The formation of this merger could not be more timely,'' stated Nolan
Quan, President of StreamMagic. ``Content providers are constantly seeking
better ways to present their media rich content on the Web. When we first
met with QSound, we were amazed by the high quality sound they could generate
from two computer speakers. With demand for audio and video content on
the Internet increasing daily we knew immediately this was the perfect
match for our world class video and content delivery service.''
Glory writes on a Yahoo message board about Stream Magic: "Who wants to
invest in a company which freely associates itself with questionable characters?
As previous posts pointed out, Stream Magic's management have ties (worked)
in the porn industry. Maybe it's ok with the hardcore (pun intended) qsnd
holders on this board but todays action should tell you what the majority
of investors think about this association. I'm done with this board. Have
a nice life."
Wmf writes: 3213 In the conference call Nolan was asked the following:
1. Who are SM's customers? His reply was he can't disclose them since
a disclosure agreement has been signed but he named Warner Bros. 2. Another
question was about who own SM? His answer was approx. 100 persons, Employees,
Consultants, and some private investors.
Pete writes that QSND will get killed: It's not the porn issue I have
no problem with the porn industry The problem is that QSND is misleading
the shareholders If they said yesterday that they are acquiring a porn
company, I would have doubled my position instead of liquidating my position
The stock would probably be 10-15 dollars right now if they would have
said. Hey everybody...we're buying a company that specializes in streaming
porn, which I'm sure is the most highly viewed streaming content on the
internet
Doodoo: The porn thing is hurting. We're down...and the merger is *supposed*
to be good news. Sorry, but it looks like the shareholders are deciding
for themselves...
XXX says: When I helped break the story about Noal Quan's porn background,
it threatened his stock. A host of people rose up to defend Nolan but
Pete writes: I didn't want to believe this crazy statement the first time
I heard it I figured, just another basher making up rumors But these guys
actually posted real information, real links and real articles THERE IS
NO DENYING THOSE ARE TRUE check them out yourself If you just try to discredit
this information without checking it out, that shows your ignorance I'm
a QSND stockholder for over 1 year , but I just sold everything this morning.
When this story gets out the stock will get killed I wish I would have
known this before I went on the conference call yesterday Good luck to
those still holding.
Vks writes Mar 21: Earlier this evening, several posts detailed evidence
suggesting that StreamMagic's entire business is built around internet
pornography, and that connection was not disclosed but is only very thinly
disguised. As soon as these posts were made, a sudden rush of "rah-rah"
posts began to appear, in an apparent effort flood the board and hide
the earlier content from view (the PR people call it "Flushing the top
40").
Doodoo writes: From the research posted, it appears as though streammagic.com
is owned by Alchemy Communications, a company that runs at least one porn
site, and who has close ties with two other companies that are heavily
involved with the porn industry. This is bad! Marketing defined is how
a company views its customers, and how the customers view the company.
How are the customers (and shareholders) going to view Qsound when they
have a porn moniker attached to their good name? This is a marketing nightmare.
Mark writes: You mention someone named Nolan Quan (as an employee of a
porn internet company charged with interstate obscenity) an an article
you posted -- now the same name has just come up in a context that you
might find intriguing (and which might create some publicity for you and
your book).
A publicly-traded company just announced a merger with a company called
StreamMagic, with a president named Nolan Quan. Speculation is that Quan's
business needed to do a funny reverse-merger deal because they are in
the porn business and can't go public any other way. If this is the same
Nolan Quan, and StreamMagic is actually in the porn business, then I think
the business/financial media might be interested -- if there was some
way to confirm it.
[Late 2000 update - The Qsound - Streammagic merger fell through.]
Hey Babenet, Wanna Call Chad?
From Wired.com 4/14/00:
Now the only company left that will admit to hosting the adult smorgasbord
known as Adultbuffet is Flying Crocodile, a Seattle company that hosts
60,000 adult sites. Flying Crocodile CEO Andrew Edmond said Adultbuffet
isn't doing anything wrong, and said about 15-20 percent of the adult
sites out there are now using dialers as an alternative payment. Dialers,
he said, represent anywhere from a $60-110 million business annually.
They're a natural solution to the problem of online credit card fraud.
Edmond said the adult sites receive about 80 percent of the revenue generated
by the long-distance phone calls to Chad. Chad gets the other 20 percent.
"In the early days we were made to look very, very, very bad," Edmond
said. "We want to bring value to the industry."
Also doing its bit to bring value to the $1.8 billion industry is Babenet.com,
a company based in Beverly Hills, California that owns hundreds of adult
websites. Several customers have linked a dialing program, called FreeSex_live.exe,
back to Babenet.
Laurie Swenson of Crookston, Minnesota, said she ended up with FreeSex_live.exe
by leaving her 13-year-old son alone with the computer. She only discovered
that he had downloaded the dialing software when she logged onto the Internet
and found that her home page, search engine, and email signature had been
hijacked by a site called GoHip.com. Another user who wished to remain
anonymous said he "was cruising the curious path, you know, the 'free
passwords' sites" when he ended up with GoHip all over his computer and
FreeSex_live.exe in his hard drive.
GoHip.com and Babenet.com are both hosted by Alchemy Communications. Alchemy
Communications once featured GoHip.com at the top of its "featured clients"
page, but has since removed all traces of the company from its site. Calls
to Alchemy's president, Nolan Quan, were not returned. But Robert Gould,
a spokesman for Alchemy, GoHip, and Babenet, said he had never heard of
the freesex_live.exe program, and kept a close eye on Babenet. "I watch
what they do and how they do it," he said. "If Babenet was doing that,
I would certainly have a problem."
(Editor's Note: In the original publication of this story on April 14,
Nolan Quan was incorrectly identified as the president of Babenet. In
fact, he is the president of Alchemy Communications. John Gallagher is
the president of Babenet, according to documents filed with the California
Secretary of State. Wired News regrets the error.) |