Tuesday, July 28, 2009

EC Drops Paid Ads & Cashout

As the new Entrecard team begins to take shape, a number of changes are beginning to be announced.

First, a new Director of Business Development was appointed. Her name is Cindy and she will be communicating with the Entrecard user base via the Entrecard Blog which is accessible as a menu choice along the top of the EC pages.

Second, in her first post on Wednesday July 22nd 2009, Cindy informed the community that the "Paid Ad" program will be discontinued. This is great news to EC members because it means that everyone's Free Ads should now be showing on the EC widgets. She didn't say what the time frame of the phase out would be, and as of yesterday, paid ads were still displaying. Hopefully this change will become effective soon.

Third, the "credit cashout program" is being eliminated. EC will try to fulfill the outstanding redemption requests with the available funds remaining, but makes no promises on fulfilling those requests.

So, what does all this mean to members of the Entrecard community?

Primarily, it tells us that EC is going back to the original business model of providing a free advertising vehicle for bloggers, and nothing more.

Unfortunately, the blogging landscape has changed. Companies like Adgitize and CMF Ads provide cash incentives for active members. This means that EC is now left behind.

Further, EC places an expensive "Rake" on members wishing to advertise. When an advertiser agrees to purchase an ad, 1/2 of the EC credits go directly into the pockets of the EC Corporation. Additional "taxes" are placed on purchases in the Marketplace and in EC transfers.

Even though EC credits are now declared worthless, there is an underlying value that is not communicated to the membership. Why in the world would EC wish to rake off commissions unless the credits had some definitive financial value? How many credits are we talking about?

Well, assume that EC has only 5,000 active members who purchase a single 32 credit ad daily. Of this EC gets 16 credits per ad, and the publisher gets 16 credits.

If you do the multiplication, you will see that (5000 ads * 16 credits * 365 days ) = 29,200,200 is deposited in the banks of the Entrecard economy per year. And, this is only a drop in the bucket since EC membership had peaked at 30,000 members and many ads are valued at 64, 128, 256, 512 and more credits.

So while the new Entrecard managerial policies are formulated, we recommend that you hold onto and amass your EC credits, rather than spend them frivously. If the new company goes public, we think that credits belonging to Entrecard members will be awarded actual cash value on par with those in the vast holding of the Entrecard banks.

If however, the new EC Team insists that the credits are worthless, then all advertising rakes and taxes should be abolished, as there would be no incentive for EC to accumulate them.

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