MerchantCircle gets new funding to continue spam campaign

MerchantCircle has secured an additional $10 million in series B funding from past investors Rustic Canyon Partners, Scale Venture Partners, and Steamboat Ventures (Disney's VC arm), as well as new investors including Barry Diller's IAC and Square 1 Bank. The press release claims, "the investment validates the company's 'merchant-first' business model." I'd say, rather, it confirms that investors who should know better will sink cash into a disreputable business.

MerchantCircle is continuing to spam local businesses, despite promised by CEO Ben Smith that it would stop. Smith still hasn't addressed complaints that his company autodials merchants with false claims, a full year after he told John Battelle that "he's on it." Even to this day, MerchantCircle's targets complain in the comments on Battelle's Searchblog. MerchantCircle says it plans to reach an additional 750,000 businesses over the next year. Local businesses make money through their phone lines. Telemarketers, they'll gladly tell you, take bread from their tables. Is this a merchant-first business model? Or MerchantCircle-first?