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The Pop-Up Man

Damon Brown
Brian Shuster is an unassuming yet hyper man with longish hair and a goatee. He is nice, almost impeccably nice, but he seems to have a hard time settling down.

"I'm always focused on the next big thing," he admits.

In 1998, Schuster decided that the next big thing was going to be the pop-up ad, so he invented them. Well, not exactly, but he created the Traffic Management Utility, a patented "exit interview" that was used for departing web customers — a method that, to paraphrase his words, was stolen and misused by other web companies.

"It was easier to do business in 1998, when the user wasn't so on guard for trickery," he says. "But we really poisoned the well, crapped where we slept. Users are very wary these days to do business."

Shuster says his goal is to stop that misuse.

"If I were able to enforce that patent, I could clean up the web by not allowing people to use the pop-up in the form they are using it," he says.

Shuster got involved in the Internet, innocuously enough, to promote his mainstream syndicated comic "Chaos" in 1994. He was able to get a few hundred readers to his comic-a-day page consistently, but it didn't increase the number of newspaper syndicates picking up his work. However, he did notice something about advertising on the Internet — namely that there wasn't any.

"So I put together a company to do what would become a double-click ad model," Shuster says. "We took in little and medium sites — actually, that's all there really were back then — and started 468x60-pixel images called banners. We wrote the first banner rotation software click-through and such, got several thousand affiliate websites and rapidly discovered that you could make money. We were trying to sell people on the notion that there was an Internet and that it was a good format. We couldn't get interest in the mainstream, but we definitely got significant interest from the adult space."

A recent college graduate still in debt, Brian borrowed $700 from a friend and started XPics.com. The free website gained popularity for its "XPic of the day" and made Shuster a lot of money. The proud creator claims that it was the second-most- frequented site on the web — easier to say in the mid-1990s but still notable.

Things started to become more complicated when Shuster decided to take things to the next level and planned to launch an XPics pay membership site.

"We were competing with companies that were very well funded," he says. "We started a membership website, Sex Roulette, and were able to start to refine techniques to take traffic from the free website and turn it into dollars."

Shuster cites a few good decisions he made at the time. First, his company applied the "all you can eat" method. Once you paid the fee, you got access to everything. No hidden charges. Next, he decided to ask customers why they were leaving.

This was both a good and bad decision.

"Traffic was coming to the site and we were giving them everything for $9.99 a month, but we were still losing people," he says. "I wanted to survey people as they left the website, so we created the technology for an exit prompt — 'Why didn't you buy? How can we make it better?'" He says the feedback was invaluable. Banner prices jumped 9-12 cents per click.

"Of course, the technology got horribly misused by competition, with the endless loops and …." Brian pauses for a second. "But we were able to make more money."

When asked how many websites use his Traffic Management Utility technology today, Shuster estimates millions. And if asked how quickly his technology was copied, he says "within two weeks."

In Oct. 1998, his holding company, Ideaflood Inc., requested a patent for the Traffic Management Utility. According to Ideaflood, the technology was given U.S. Patent No. 6,389,458 in May 2002, almost four years later. Shustersays this was too late.

"The purpose of a patent is if a small company has a good idea it can benefit from, but within two weeks it was wildly copied," he says. "The problem is that patents still take up to seven years, then you can hold it for 20 — but seven years is forever on the Internet."

It is hard to imagine an Internet browsing experience, whether it be Amazon.com or a fetish website, without some sort of pop-up window. It is even more difficult to see anyone getting respect in the early days of the Internet. Using the patent office must have been tantamount to contacting the sheriff of Dodge City for help.

"How could that possibly be invented by someone? How could that be a novel invention? Seven years later, it's totally obvious," Shuster says. "They weren't very sympathetic to how much it cost or the research and development and the financial benefit to the industry. It's an understandable reaction — a negative reaction — and I lay blame on the patent office for that."

Shuster says that the Traffic Management Utility was rarely used for its original purpose. It was modified by others and led to the invention of automatic pop-ups, forced entries and other now-commonplace technology.

Profit Margins Dive
"In the early part of this century, the value really went out of the industry," he says. "The profit margins deflated. It was much more replete with fraud and squeezing out an extra tenth of a cent by spamming someone's email."

Other people were noticing an up-tick in unscrupulous behavior by porn sites as well and decided to take action against predatory webmasters.

Shuster was first on the hit list.

In 1914, the Federal Trade Commission was created to stop monopolistic practices among American big businesses. Congress eventually expanded the organization's power so it could, in the FTC's words, "police anti-competitive practices."

Shuster's website was one of the first to offer trial membership. Interested parties could get a free month with age verification. With Age Check, VeriSign and similar companies still in their infancy, Shuster says that the only reliable way to guarantee age was to get a major credit card.

"This was our lawyer's advice — the industry standard," he says.

The FTC smelled a scam.

"They saw the numbers we were billing and thought that the only way we could make that kind of money was if we were cheating customers," he says.

Focusing on 1999, the FTC checked all Shuster's company records, including 600,000 free memberships, and interviewed everyone in customer support. Everything checked out. Shuster says he understands why his business looked shady at the time but doesn't mince words.

"I think the FTC knew what they were doing and how to throw a wrench in the works," he says.

Shuster believes the FTC had a financial motivation to start such a case because any money gained from an investigation was reinvested in the government organization. At the same time, defending investigations is a major drain of company resources, particularly a small Internet company. Shuster beat the FTC rap after a yearlong battle, but his paysite went under shortly afterward.

"The problem with the FTC was going through their enforcement process, not the outcome," he says. "They came up with a zero-dollar fine, but it shut down our business."

To this day, Shuster still laments the process he went through in clearing his name.

"They basically shut us down, seized our assets and pulled our customers offline while they tried to figure out how we allegedly caused problems for customers," he says.

The shutdown caused enormous chargebacks, and even though Shuster was cleared of the FTC charges, he says the company lost its banking and could no longer function.

"One of the lessons learned is that it's the investigation that is the punishment, not the outcome of the investigating," he says, looking back. "We have to be wary as an industry. At the end of the day, if you are vindicated and shown not to be in violation of obscenity, it is a hollow victory if you are out of business."

RLC Launch
As usual, Shuster has moved on to the next big thing. His new company, Utherverse Inc., recently launched RedLightCenter.com. Inspired by the massively multi-player online games that are popular today, RedLightCenter is an arena that allows users to move their persona through an online sex district. It is patterned after Amsterdam's famous red light district.

A local bordello is operated by a phone sex company. Online models can try on lingerie, which, if you like it, you can buy and have shipped to your home. Stars can meet and greet their fans online.

Launched this year, Shuster expects users to take to the 3D interface because it imitates real life, yet makes things easy.

"It is reminiscent of 1992 — simple — except with the buying power and secure features of 2006," he says.

In addition to running his company Ideaflood, Shuster also released a novel this year, the technological thriller "The Minerva Virus," which is currently one of the most downloaded books on the Internet. He refers to his present-day work as being similar to his pioneering in the early days of the web.

"The stuff I'm doing now is going to be recognized as being totally groundbreaking for the next version of the Internet," he says.

While he learned from those early days, in many ways, the damage was irreversible.

"When it all comes down to it, the lesson is that it doesn't matter if you're doing anything wrong," Shuster says of his run in with the FTC. "That is where the industry lacks support and cohesion. If people think they are immune, it doesn't really matter, because if you get targeted, you can be put out of business and then with a smile, they say, 'Congratulations, you've been cleared of any wrongdoing' — although by that time, that discussion takes place on skid row."

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