Fargo, N.D.-Based Internet-Based Marketing Group Vanishes
Tad Cook
By Jason Skog, Duluth News-Tribune, Minn.
Knight Ridder/Tribune Business News
Feb. 3--AdverWorld Inc., the Internet-based, multilevel marketing
group that once whipped hundreds of wide-eyed Northlanders into a
cash-crazed frenzy, seems dead.
Calls to phone lines once flooded with people eager to join the
upstart Fargo, N.D., firm now reach telephone numbers that have been
disconnected.
The effusively confident corporate officers, who once claimed to have
"Adversomnia" because they were so excited about the potential, have
quit and left town, leaving little or no forwarding information.
And the company's former representatives -- people who paid $79 a
month for a chance to profit by selling World Wide Web pages and
recruiting others to do the same -- have mixed feelings.
The company's fall has been difficult to track.
AdverWorld's Web site hasn't been updated since July. Unless taken off
a computer server, www.adverworld.com could linger in cyberspace
indefinitely.
The Duluth News-Tribune's efforts to contact former officers through
phone books, directory assistance and leads from former business
neighbors have been unsuccessful.
Sean Kramer was once Adver-World's vice president of marketing. He
couldn't be located in the Northland, but a Sean Kramer is listed as
working with a California Internet advertising firm named Big Book
Direct. A biography on the company's Web page says Kramer once was
"cofounder of an Internet services company that generated over 40,000
customers in less than one year."
Calls to Kramer's office weren't returned.
More than a year ago, AdverWorld was drawing hundreds to seminars in
Fargo, the Twin Cities, Denver and other cities. One in Duluth drew
nearly 500, making the company's talk of income potential a hot topic
in area bars, diners and offices.
By having $79 a month withdrawn automatically from your bank account,
you could purchase a Web page and reserve a spot in the company's
matrix, a pyramidshaped compensation plan. The monthly fee also gave
individuals the opportunity to sell others on AdverWorld's product and
potential.
To some, it smelled like a pyramid scheme. Almost immediately,
attorneys general in North Dakota and Minnesota received inquiries.
The North Dakota attorney general's office had declined to comment on
the company. But on Monday, Parrell Grossman, an attorney in the
Consumer Protection Division, said an investigation is under way. He
would say nothing more.
Gary Carlson liked the sound of AdverWorld's potential, becoming a
representative almost immediately. So did thousands of others.
The Duluth pull-tab operator stayed with AdverWorld for nine months,
investing $79 a month and taking in an average of $50 a month from
signing up others and selling Web pages. He said he thinks AdverWorld
was legitimate, but lacked follow up.
"We were going on the assumption that the company was going to
properly train us," Carlson said. "They didn't do it."
He said he's not bitter and only decided to quit when it looked like
the company would be changing ownership along with the compensation
structure.
"A lot of people just decided to get out," Carlson said.
According to AdverWorld, the company grew to 100 full-time employees
and sales in excess of $2 million a month. AdverWorld also claimed to
have 20,000 customers nationwide and enough requests for Web pages
that they had to work nearly 24 hours a day.
"What I think happened is that they got stars in their eyes too quickly
because of the unbelievable growth right away," Carlson said.
Talk of a change in ownership was partially true, but a Jacksonville,
Fla., Web site production company canceled the deal at the last
minute.
"We were not interested in purchasing the company, but we were
interested in purchasing the Web sites," said Ron Milburn, president
of NRG Network Inc.
Milburn said the deal fell through when he saw the number and quality
of the company's active Web pages.
NRG did conduct one of AdverWorld's automatic withdrawals from
salespeople's bank accounts, but that was before NRG knew of the
questions swirling around AdverWorld.
"The bank held the funds to make sure that the complaints were
settled," Milburn said. "We are in the process of trying to decide
what to do with that money, but that money is in the bank, and we have
no intention of keeping that money."
AdverWorld representatives were required to authorize the automatic
withdrawals. It took Gayle Koop of Duluth several weeks to cancel that
arrangement after she and her husband decided to quit.
In roughly 13 months, the Koops never earned a dime. They also never
tried to sell a Web page or recruit others.
The Koops were hoping for a cushy spot in the "matrix" where people
below them could do the work and they could earn bonuses. That never
happened.
"We spent a lot of money making no money," Koop said.