I don’t know whether to call Pudding Media the most loathesome business model in the world or the most cynical, or both. Pudding Media is the latest company to take advantage of the “free services in exchange for ads” business model. We’ve seen free Wi-Fi in exchange for viewing ads (MetroFi) and free mobile phone service supported by ads (Blyk).
Now comes Pudding Media, founded by two guys who used to do intelligence work for the military. You can see where they got their ideas. This is the ultimate monetization of phone surveillance or snooping. They have a web-based phone service that lets you call any phone number for free (in the US for now), but they (or rather their software) listen in on your conversations and display ads on your browser.
Here’s what the NY Times says:
. . . Pudding Media is eavesdropping on phone calls in order to display ads on the screen that are related to the conversation. Voice recognition software monitors the calls, selects ads based on what it hears and pushes the ads to the subscriberâ€™s computer screen while he or she is still talking . . . The companyâ€™s model, of course, raises questions about the line between target advertising and violation of privacy. Consumer-brand companies are increasingly trying to use data about people to deliver different ads to them based on their demographics and behavior online. Pudding Media executives said that scanning the words used in phone calls was not substantially different from what Google does with e-mail. Still, even some advertising executives were wary of the concept.
You might think it’s not different from Gmail, Google’s free web-based mail service that delivers ads on the side. But I think it is. There’s something very intimate about phone calls and I would be completely freaked out if strangers, even if it were a software bot, were listening in on mine. Of course Pudding’s founders don’t think so, having been in the military intelligence business. Does it help them to have the former chief privacy officer of Microsoft on their advisory board? It depends on whether you think Microsoft is a friend or foe of privacy.
I think most people will be freaked out by the idea even though Pudding says they don’t record your conversations.
Where it might work well: the sex chat industry
But I can see where it would be quite popular: in the sex chat industry. The caller dials a number via Pudding’s web-based service, sees ads on the side while he or she is chatting — although I think this destroys the pay-per-chat business model of sex chat businesses unless they offer this free version to their customers in exchange for seeing ads on a web browser (and the ads actually make up the lose in revenue).