Phony press releases have become the grist for the newest Internet profit mills. If you're like Chris Anderson and us, you don't read press releases. But several tech blogs were taken in by a dubious press release issued by a nonexistent company allegedly backed by real investors who may or may not have invested in several fake companies. Huh? Exactly. How the scam was uncovered, how it works, and how to avoid falling victim after the jump.
Although there's evidence of many fake press releases floating around the Internet, the scam first came to the attention of Silicon Alley Insider because one particular release mentioned Internet television, a must-cover topic on its beat. But "the world's first broadcast-quality Internet television service" raising an alleged $45 million, profitable and yet no one's heard of it? SAI managing editor Peter Kafka's eyebrows were raised.
The confusion was exacerbated when these bloggers contacted First Mutual Credit, the only real company listed as an investor for confirmation. Two separate sources initially confirmed First Mutual's investment, but the New Zealand company has since denied any involvement. (Maybe it was that strong Kiwi accent.)
Several other fake companies and fake press releases have been identified. But what is the scam in advertising a nonexistent company? Peter Kafka, who has been closely tracking the story for Silicon Alley Insider, is stumped, but we think he's already stumbled upon the answer: Fake press releases get picked up by a host of PR-aggregating sites that profit off of Google AdSense ads.
Fake blogs already remix existing blog posts to generate nonsensical pages that nonetheless turn up in Google search results and display Google-sold ads targeted to relevant keywords. Press releases filled with buzzwords make even more lucrative fodder for AdSense.
So who makes money here? Press release aggregators like PR Leap would never admit it, but their cash register rings whether or not their press releases are accurate. And the perpetrators of the HD AmeriTV press release? There's no proof, but we smell a search-engine optimization scam, where they get paid by clients to try to improve the ranking of websites by seeding the Web with fake pages.
There's a simple solution, of course: don't read press releases ... real or fake.