Cybererotica.com's owner Ron Levi (Fantasy Man) has shaped the internet porn industry more than any other individual.

"He structured the industry we're in right now," says a internet porn source. "How can you bash a guy who created the livelihood a lot of these guys are making from his sites and his technologies?"

Ron's innovations include:

* Pay per click banner advertising (8/96). Levi's paid out millions of dollars through his FastCash program.

* Productivity clicks. Ron first began paying on unique hits rather than raw hits. A unique hit refers to a hit from a unique IP address (every computer has a unique IP number).

In the Spring of 1997, Ron developed High Rollers, which paid according to the productivity of the traffic you sent. If your traffic generation lots of signups, you made lots of money. If you generated no signups, you made no money. High Rollers was copied by many people, including Babenet, whose RockinRollers.com program credits Cybererotica for the innovation. At the bottom of Rockinrollers.com/straight.html, is this sentence: "The idea for this program was copied from High Rollers designed by Shai Shprung from CyberErotica."

* Double opt-in email programs. To sign up for Ron's email programs like Risky mail (which sends porno pictures to your email address), you had to first type in your email address. Then you got an email asking for a confirmation. You had to reply to this email, or click on the provided link, to activate your account. This way strangers could not type in your email address and flood you with porn.

"So when UU.net or someone complains that you are spamming," says Levi, "we can go back to our records to that particular guy's email and give the IP addresses and all the formal information that identifies that he did it. Our program has stood up to the scrutiny of UU.net, Real Time Blackhole, MSN Security. Someone played a joke on the head of MSN security once. The head started getting Risky mail. I said to him there's no way. We got down to phone calls. I said, humor me. Look in your out file for email. And sure enough, while he was out to lunch, somebody had submitted his email address, got the email back and confirmed it (but didn't erase the send file). So there's no way someone will get something from our email programs unless they've asked for it.

* Live feeds. "IGallery and Babenet took my idea of putting live feeds in members sections (5/97) which has become common. They feared that the bandwidth would kill them. I had to underwrite any potential loss from bandwidth. And the banner of course would be underneath for the upsell to chat with the girl. And that ended up to being a grand success. It's created a whole business of people creating live feeds and offering them to pay sites."

At one time, Levi helped market IGallery, Babenet and Python's live feeds. "Python wouldn't do it [have Levi underwrite any loss from bandwidth]. They were stuck in their ways and have been licking their wounds ever since."

Babenet principle Rob Gould said in the IA2000 convention right after that, in a workshop roundtable, in an answer to the question, when did Babenet turn around and start making money, Rob said it was when we started listening to Fantasy Man.

* Counter that pays. Cybererotica developed the first counter that people can put on their sites to rate traffic stats and earn income from signups. "They can get fantastic reporting stats," says Levi. "They will learn where their traffic is coming from, search terms, which search engines, what browsers surfers are using, what resolution so you can optimize your site... It is a very complex program that gives more information than any other counter out there."

About three years ago, Levi financed Joe Holler's development of the XXX Counter. Holler had partnered with the guys from Websidestory.com, another counter service. Holler was paying for the development of Websidestory's adult counter. He got screwed out of the deal. So he took the code and put up XXX Counter.

"The code was garbage," says Levi. "So BobX rewrote XXXCounter while he (BobX) was working for me. It was supposedly me, BobX and Joe Holler involved in that. Then I went on vacation. And in those days, Internic was controlled by email. My email address Fantasyman controlled XXXCounter's domain. While I was on vacation, BobX walked in my office and sent back a confirming order to move XXXCounter out of my name. By the time I got back from vacation, it was out of my name and off my servers."

XXXCounter was since sold to Andy Edmond of SexTracker.com and Levi received nothing.

Serge Birbrair tells Luke: "You give him [Levi] credit for inventing the click-thru program. He tries to portray that but it is not true. The first click-thru program was invented in 1996, about three weeks before Levi, by Al Hadhazy from Amateur Hardcore.

"The way I know this story is that I was working with Al and Ron at the same time. I remember which program came first. I remember that Ron was going to sue somebody for circumventing their efforts to create the program. I remember Ron asking the Amateur Hardcore people if they [Cybererotica] could develop the same program for them.

"Ron loves to take the credit for them but I communicated with Al Hadhazy who says, 'The reason I let him do that is... I was the one who invented it but he was the one who was able to bring it to life.' Even though Hadhazy invented the program, Al closed his. Ron did not and did better than the inventor of it."

Ron Levi: "My pay-per-click advertising came out in August of 1996. Al Hadhazy came out in September in 1996 and he used to have something on his FAQs that said that we had come out with it before him."

Luke: "Why does Serge believe that Al came out first?"

Ron: "Because Serge believes what he wants to believe. If you go look at his Sergescash.com program, he's been paying people since 1995. Serge never even had a click program since 1998. He wants to make himself out like he was in there with all of us but all he was was a guy who sent traffic to all of us.

"I have old emails where I went back and forth with Al Hadhazy over it and he actually changed his FAQ because of it, saying that another good program was Cybererotica, who were actually out a few weeks before us.

"Serge's recollection probably is that he knew Al Hadhazy before he knew me..."

In 1997, Levi partnered with Richard from Ientertain and Dean. They split the Fastcash traffic. Then Dean and Richard became partners without even considering Levi, leaving him out in the cold. So Ron kicked Richard out of Fastcash.

XXX: These Australians like Scott Phillips are into macho. They're into drinking and fast cars and get along great with Americans like Levi.

Levi knows nothing about spammers (folks who sent unwanted commercial emails). Anytime someone would spam using his programs, Levi kicked them out and would never even respond to their emails or calls.

Voice Media (Levi's company) has over five million names in his Risky Mail program which sends out porn-filled email every day through its double opt-in email program.

VM has never had a problem with UU.net, which controls the internet backbone, because of its harsh anti-spam policies. Nothing beyond a level three escalation.

Dave Rand, who runs Above.net, at one time placed VM on his Real Time Black Hole list for spammers. But VM changed procedures so that people who signed up for programs would receive their code via email, instead of receiving it immediately upon signup. This made sure that those people signing up had entered a valid email address.

Around 1996, AOL gave VM hassle over email spam. VM responded aggressively through its attorney, outlining its anti-spam policies. VM offered to help AOL with its security because the way that email addresses can be harvested off the AOL chatrooms, promotes spamming. AOL never replied.

AOL is preparing to massively sue many net porners over spam. Several big net porners have been deposed by AOL.

XXX: The minute you get out of this country, ISPs get funny. It is hard to use them to crack down on people using stolen content, spamming, etc... If someone is based in Australia, the only way for you to go after them is to hire an Australian barrister.

Levi keeps his blinders on. He doesn't follow his competitors. Because they always end up following him and do the things he innovates. Ron doesn't need to look at what they're doing. He's gotten no new ideas from watching other people do things.

Levi's latest new thing is Blowmelive.com which combines "beautiful ladies, WWF-style wrestling and lesbian sex..." Five days a week, girls come in, get massaged and a gynecological exam, then they relax in the jacuzzi, hang out in their chatroom and then get into the ring and wrestle. It's a unique produced piece. VM has recorded lots of digital footage which may get edited and sold to cable TV. It's R-rated Playboy level content.

Levi's FF5 program won lots of awards from AVN but did not convert because its tour was all in flash animation. Now it's been redeveloped with a regular HTML tour.

Deep Inside Cybererotica

6/28/00

A few days ago, I interviewed the owner of Cybererotica.com, Ron Levi.

Porn webmaster K-Man (Keith Gatehouse) writes Luke: I was a partner as well as an employee of Ron's in 1996-1997..... I've got so much dirt on that guy it makes me sick =-)

K-Man: Summary of what I PERSONALLY KNOW and would sign affidavits for:

1) The original pics for CyberErotica were from the NEWSGROUPS, freshly harvested from the former NetPics.com (they got raided and shut down in Texas a while back, may be back up by now though)

2) All of the stories back then were stolen from WebSplash.com, CE bought a member account there and my job was to steal all of their stories and put them onto CE.

Keith: "You should see this guy's house. It's unbelievably big, the size of a small city. Everybody envies him and his money but he's a scumbag. He's getting better at public relations and saying politically correct stuff but he used to be a big pothead.

"I was Ron's first assistant webmaster. The day Bob X and I walked into his office and we walked out with a $5000 check, just for joining his organization. I was like a little kid. We were freaking out. He wanted to make a good first impression."

Luke: Last week, I discussed these charges by telephone with Ron Levi.

Ron: "We've always owned all our content. We've never taken pictures from the newsgroups. We did have one dispute with a photographer. We'd bought photos for our audiotext business..."

Cybererotica's parent company Voice Media Inc started as an audiotext company in 1992. It launched the Cybererotica.com website, one of the adult web's ten largest, in December of 1995. Keith Gatehouse and his friend Bob X came to work for Ron shortly thereafter.

Ron: "When we'd buy photos for magazine advertising, you'd buy the photo, not the shoot. Just the photo out of the shot, lock, stock and barrel. He [the photographer] can never use it again. So I really took issue with the guy [photographer] and I think that Keith might've been in the office at the time and didn't understand what he was hearing.

"I have photos, slides and negatives that I bought from photographers at the very beginning, not knowing how much it costs to scan photos, that we still haven't scanned, that we own lock, stock and barrel.

"Netpics.com got shut down for kiddie porn. See how he's trying to tie me to things? This isn't right. When I look at this guy {Keith Gatehouse], I see the hate. He accused us on the boards of screwing up the credit card industry through our free signups. That we ruined DMR?

"He learned about DMR from us. DMR's problem was when they tried to go public. We weren't DMR's problem. The moneymakers that came in, kicked them out. They mismanaged their accounts. They were a third-party processer. We had no control over them.

"We've never had problems with high chargebacks. We're one of the least fined people out there [credit card companies levy fines when websites have too high a rate of chargebacks]."

For two years, Ron's been trying to develop offshore credit card processing that he will then resell to adult webmasters. But with all the complications in the process, he won't release it.

Ron: "I have some offshore processing that I am not even using at the time. It's being tested."

Luke: "Is there a chance that Visa and Mastercard could cut off the adult industry?"

Ron: "I don't think they could do that because of [anti] discriminatory practices [regulation]. I wouldn't be surprised to see somebody sue American Express [for no longer processing porn sites].

"Back in the audiotext business [phone sex], Betsy Superphone sued Visa and Mastercard for cutting off the adult industry. She spent millions of dollars. She always used to complain, I fought for all you guys and I was the one who paid for it. That's when Visa came up with the one percent rule for audiotext."

Luke: "Why don't you use the dialer option [charging people via bills to their telephone long distance)?"

Ron: "If I'm getting it up to $100,000 a month and I'm distributing it to the guys by signups percentage... How else can you track it? You can't have an individual number for each webmaster.

"Whenever you have a pool of money that you are going to distribute, there's always cause for people to question. I've always stayed away from any pooled resource such as a 900 number... And there's no way to check by the webmaster who sent it...

"When I do something, I think out the consequences down the road, around the corner, down the next road and around the corner... And that's what precludes me from doing a lot of things that other webmasters jump in and do. Because I never want to do anything to a webmaster that he can construe that we're trying to screw him out of money..."

Luke: "It would hurt your reputation and your reputation is everything."

Ron: "Yes it's become that but I've always been like that. What came first, the chicken or the egg? I've always been like that and I've gotten a reputation because of it and I don't waver. When something is black and white to me, it's black and white to me, and I don't believe in grey areas. Because of that, a lot of people say that I deal with a heavy hand. But nobody can say that they got ripped off.

"Everything I've ever done, I've thought about the industry. And when I do that, it takes care of us, because we're part of the industry. I look out for the welfare of the industry. Whatever works for us, works out well for the industry. Anytime I can come up with anything that can help, including credit card processing, we will be glad to share it with people. But I am not going to do it until I know it is really soup.

"The biggest problem is with the abusive consumer who goes out and signs up for ten websites in one month, and stays on all of them for six months, and then decides to tell the bank he doesn't know what they are."

Keith Gateouse writes: "He smokes so much weed every night, by the time he gets in the office in the morning whomever enters his office at, oh, say 11:00am was jokingly called the "lightning rod" because he would lash out on them so insanely as he was coming down (shrug) (this was back in '97, dunno about nowadays)."

Ron: "It is public knowledge that I have been known to partake. I don't drink. I don't abuse it. I don't smoke every day. What he's talking about is days when I would come in and find that my employees had messed up something terribly and I would be sitting at home and watching the stats. And I'd come in and start talking to them and they'd start backstepping... Those guys don't work here anymore.

"I don't like to yell. Everybody knows that over time, I've mellowed. As you get older, you reflect. He's trying to tie, in a sick way, two things together. And this is probably something he talks to people about...and this story becomes in his mind a fact.

"This kid. All I know is, we brought him heavily up to speed on HTML. So that he could do beneficial work for us. I turned him on to DMR and got him his own merchant account. And look how he spins that back against me. He was a friend of Joe Holler and Davyk from Amateur Web, that group of people who I made a lot of money. Tried to get them into pay sites and they stabbed me in the back. And at the time they stabbed me in the back, he sided with them. He went to work for them.

"It's obviously sour grapes, that he has spun some of these fabrications out of stories..."

Luke: In Spring, Voice Media sold Clubpix.com to Rick's Cabaret (Nasdaq abbreviation "RICK") in exchange for control of the company.

Levi told AVN.com: "Rick's further entry into the Internet is its purchasing, in two different steps, of two of our websites. The first deal, for www.xxxpassword.com, will give us just under 20 percent of the stock in that company. At the time that we convey over to them www.clubpix.com, which is the other website we're selling them, that'll give us roughly 43 percent of the company, which is basically control."

Andy Edmond from SexTracker told AVN.com: "The deal is also a way for Voice Media to play their properties on public markets to see if it's good or bad for business. It is unlikely Voice Media will go public, just as it is unlikely for IEG (Internet Entertainment Group) to do so. Voice Media's been interested in the public market for some time. They've been developing non-adult properties. But I don't think they've ever felt confident they'd find an underwriter to take their properties public. So they sold one of their major properties, Clubpix.com, to Rick's, a public company. I think Voice Media's doing it as an educational experience, as well as a slight gamble, to see if their property goes up or decreases in value because of its relationship with the public market."

Voice Media owner Ron Levi told me: "Selling Clubpix had nothing to do with paying off [credit card processing] fines and all that gobblygook I saw posted...

"We've gone back to our free signups and they've been a smashing success."

Ron writes: News Flash - Free Sign Ups are Back!!

Back in November 1996 CyberErotica (CE) implemented Free Sign Ups for Trial Memberships to their Paysites. It was a very successful marketing tool and helped Webmasters make more money than ever before.

March 16th, 2000 CE had to stop Free Sign Ups because of the increased fraud it was experiencing. It seems that by that time, most other Paysites that had previously offered Free Sign Ups that had done away with them and had changed to Paid Trial Sign Ups, thus CE became a target for a lot of fraudulent traffic. So March 16th, 2000, CE switched over to Paid Trial Memberships in an attempt to control fraudulent activity.

CE's programmers then went to work feverishly to identify and analyze the different types of fraud it had experienced. It took 2½ months and CE's programmers developed a new Free Sign Up program named CE-Free. It was launched June 2nd, 2000 and has become a smashing success!

Folks are talking about the 'summer slowdown' - we are not experiencing any 'summer slowdow'. We're fast approaching 1 million unique visitors a day just to the front page of CyberErotica. In less than a month over 2,500 Webmasters have signed up for our new programs and Saturday, June 24th, 2000 was our biggest sign up day ever!

Ron: "You can't see the affect of what you start for 90 days... So you can imagine how slowing the process is... Reminds me of the audiotext days when you had to buy advertising 90 days in advance. And 90 days later you found out that your ad was bad.

"If you opened up a new account at a new bank, in the first two months, if you'd see three chargebacks, that would be amazing. It happens after 60 days when people start getting their bills on their credit cards. And they see it for a second or a third time and they start calling their banks and calling our customer service."

Luke: Ron Levi and Cybererotica got good reviews for customer service in the latest issue of MaximumPC magazine for customer service.

A man writes in to a MaxPC columnist Watch Dog: "Dear Dog. I have an embarrassing problem. I don't know who else to turn to. One night last month, some friends and I came back from our house pretty wasted and decided that the best thing to do was to look at some porno. After looking at lots of crappy sites, we stumbled across Cybererotica. It's a paysite with a free seven day trial. We decided to use my credit card after reading the terms and conditions. We thought it would be safe. It turned out to be ok but since I did not want to pay $34:95 ($51.22 Canadian), I cancelled my membership. The page came up confirming my cancellation. Then today I received my Master Card bill. To my surprise, it showed a charge of $51.22..."

Dog responds: "The Dog contacted Ron Levi, owner of Cybererotica... He said that if the account had been cancelled within the trial period, the system should've automatically processed it. Being skeptical of his claims, the Dog tested this by dialing a service number late at night. After a four minute wait, the customer service rep answered to cancell the Dog's membership. Yow! If computer companies offered 24 hour support that answered within four minutes, the world would be a happier place... Cybererotica is a legitimate business."

Ron: "I spent time on the phone with this [Watchdog] guy. I didn't know who the guy was when he called me. You know me, I talk to everybody...

"I have 140 people in customer service. Our expense in trying to deal with chargeback issues have raised our overheads extremely, but we're massaging it every way we can.

"This MaximumPC is a computer nerds magazine. And this guy normally destroys everybody. Obviously this kid waited longer than the seven days. We can't cancell then because we've already charged it, so we issue a credit."

Luke: "What do you think of the job AVN is doing with IA2000?"

Ron: "It's a high end magazine. They certainly know the magazine business. And judging what I'm seeing so far with vendors [for the New Orleans IA2000 show in September], it's going to make the Cybernet Expo look like a dwarf.

"I work my ass off. And anything I do, I do with the industry in mind. People always used to tell me, you're going to be a target. Two years ago, I was oblivious to what that meant but with the naysayers and doomsayers and jealous people out there, I'm starting to see what people meant. I found that you can have 3500 webmasters in a program and 3495 are happy. And they'll never post a thing. And there are five people who are unhappy and they post and send nasty emails."

K-Man writes: "Luke, he's so full of s---, his eyes are brown! Mike Hoffmeyer, Ron's first webmaster will verify my orders were to round up unlicensed photos from netpics.com for use on CyberErotica. What is this with Ron's saying I am trying to tie him in with child pornography ( because netpics got shut down for hosting child porn, did I ever mention the reason? No, Ron did) .... One might wonder why he's quick to jump the gun and get defensive over child porn? Why don't you ask him about the 1997 scandal where CyberErotica had erotic stories that INVOLVED little children? Now, I doubt that he personally knew they were there, but he certainly didn't have the sense to ensure this sort of thing was NOT going to show up on his site. I've run on enough about this character I've got better things to do with my day, oh one more thing, while speaking with him on the phone today I asked him to tell me to my face (ear?) that I am not telling the truth and he WOULD NOT say it...."

8/9/00

Ron Levi Interview

I got a call Wednesday from Ron Levi, the Jewish owner of Voice Media and Cybererotica.com. I'd emailed him to get his views on Gore's selection of Joseph Lieberman, an Orthodox Jew, as his running mate.

Ron: "Doesn't that cut down Gore's chances? After you get past California, people think we have horns.

"That selection is amazing. This is the first I've heard of it. I've been real busy growing my business."

Luke: "There's been lots of interesting discussion on Netpond but you haven't had a chance to read it."

Ron: "I'm trying to make money. Those guys just have way too much time on their hands. The boards used to be a place where you could do business and meet people and get things done and blast new product out. Now everybody's wired for sound and looking to start pissing matches and get a name for themselves. When I have new product, I go to the boards and socialize a bit because that's the proper thing to do before you talk about business. But aside from that, I don't even look at these boards anymore. They've lost their value."

Luke: "I see you have a new music CD out featuring porn stars."

Ron: "Yep, I'm branching out in every direction I can. Music crosses over to adult entertainment... We're even thinking about doing a Cybererotica Life magazine aimed at consumers. I'm looking in all sorts of ways to brand our flagship site Cybererotica.

"I don't believe in billboard advertising, TV advertising... We have such a large subscriber base and we get more traffic than Playboy or Hustler. Why not go into their backyards but with an internet model... There's so much internet money. Whereas Hustler, Playboy and Club are hurting. Hustler magazine was always living off of phone sex ads. Well, that's gone to nothing. And the readership has gone to nothing. But I can grab market share from them from the people who know us from online. A lot of people would rather see a Cyberotica than a Penthouse, Hustler or Club magazine. And I can easily distribute it and do the things that other magazines don't know how to do.

"If you go to Playboy.com, how can they ever make money and have a webmaster program whereby people send them traffic, because they charge $6.95 for a membership. So where's the economy to pay a webmaster? It is a bad model. My exposure online to surfers is far more vast than all those guys put together. I send out emails to 5.2 million people a day in a double-opt in list.

"I've had that sportsfeed.com site up for three years. It caters to gamblers because it gives out the betting line, which ESPN and Sportline don't do that. Unless you buy traffic to come to that site, there's no value there. When they do come, they do click on "Betting Odds." We won an award for the site because it is also done in HDML and is on the AT&T and Motorola networks."

Luke: "How does it make money?"

Ron: "It doesn't."

Luke: "Do you fear the coming elections?"

Ron: "I don't know which way to look. Gore is pro-internet but Tipper is very anti-porn. And historically, the Republicans have been known to go on witch hunts.

"At least in the last three years, the feds go after guys who do the con jobs with mail order and 900 lines, where they misrepresent themselves to the public. There's so much fraud going on on the internet.

"With Rodney King, the 12 jurors saw the frame by frame beating so many times that they became desensitized and ruled in favor of the police. I think that when CNN broadcasts a story that Sony's DVDs are going to be a grand success. Why? Because 80 Vivid titles were on them. I think the public has become desensitized. They hear about porn on the net...

"We keep our stuff behind credit cards. But when I see this stuff on network TV, it is alarming. When I was in the 900 business, anytime we did an interview with somebody, no matter how carefully we watched what we said, they would paraphrase us. You know how they do it with soundbites? They take five words of a sentence because it's what they want... And you'd get destroyed in any interview you did. Now, anytime I see an interview about an adult company, it is always upbeat and positive."

8/10/00

XXX writes: Luke, I think the free hosting that Cybererotica is providing you is slanting your style. You need to ask Ron Levi about how his shaving has cost him what was once the largest webmaster program on the net. This guy is a piece of work.

He used to come on and say how he was paying everyone for every signup etc. Well, then he disappeared for a while and all of a sudden everyones ratios went in the toilet. Then someone posted on one of the web boards about signing up and not getting credit for his own signup. Apparently this guy signed up and cancelled. Then he had someone else signup and this guy didnt cancel and then about 24 hours later he got credit for the signup.

So it became apparent that Levi was not paying for signups that cancelled. These guys signed up via check and discovered that they were not getting paid for check signups. Then low and behold his new program does not pay for signups that cancel within a week. I guess the guilt of cheating everyone got to him. Levi talks about all his hits but the guy runs a console chain that has them getting investigated by the FTC. Sportsfeed hits all come from being about the 8th console on the cybererotica.com site. Its a shame because Levi has ruined that company. They just cant keep up and all the numbers show them slipping big.

I think MaximumCash is about 2 times the size now. I guess this is why Levi hides from the boards now. He is afraid of the truth. He used to complain about all these companies that ripped people off. Now he is partnering with them. It is pretty desperate on his part. There seems to be only 1 really trustworthy company and that is maximumcash.com. That guy runs a tight program and pays for all signups and counts all hits. I dont know how he does it but he does. Try and open your mind Lukey. Don't be swayed by the free hosting.. Signed, XXX

Luke: To the best of my knowledge, Ron Levi and Cybererotica have a sterling reputation for honesty. They don't shave and never have. They've never paid late. And Cybererotica has not hosted me since December of 1998. They do own a site I once wrote, 4porn.net, which I wish they'd use for other purposes. But I have not contributed to 4porn.net since early 1999.

I got back from shul (observing TishuB'Av, the saddest day of the Jewish calendar where we mourn such national catastrophes as the two destructions of the Temple) at 1PM Thursday. It's a fast day and Jewish fasts are tough, no water as well as no food. No bathing, no sex and no wearing of luxuries such as leather.

I called Levi about the allegations.

Ron: "I love these assholes. When a guy sends me an anonymous email like this, I tell them that I won't address their concerns until they reveal themselves. That's my kneejerk reaction on this because it is so far from the truth and what I am all about...

"I'm only going to respond to this as a favor to you. I wouldn't do it for anyone else.

"We don't shave one bit, as I've always represented to you. We pay for every single signup. Ratios went into the toilet when we went to a paid subscription (in March) and our conversions hit the toilet as did MaxCash's when they tried to do the same thing (when they changed over to paying the bonus on the dialer option). I send them a lot of traffic and they went from a one in 300 to a one in 900 ratio. Then they made some adjustments and we're back down to one in 300.

Ron: "When we went from a paid trial to a free trial, our ratios plunged. Why do you think I came back with a free trial? But I had to come back in the new era of programs, paying on productivity. You can't pay a webmaster $45 per signup, which our free programs pay, without the person becoming at least a $34.95 member. So we came up with these free programs where we tell webmasters that if the person who signs up does not convert to a paid membership, you don't get paid. We use full disclosure.

"I don't hide from the boards. I'm simply busy.

"Understand that on that seven day period for free signups, on midnight of the seventh day, we go through what we call housekeeping (cron job). Our customer service updates the credits for the day and within two hours of the eighth day, a signup may be taken away.

"We started taking checks around March 10. It took ten days to incorporate it into our pay system for webmasters.

"Look at our new stats program for our new free program."

Luke: I cruised over to the stats page and saw its realtime stats on visitors and signups, cancellations and credits.

Ron: "This is a state-of-the-art program which we can pop into somebody's paysite if they want us to administer a click-thru program for them. It takes us two days to do it... This is a new era for pay programs because you cannot pay a webmaster for a person who does not pay you.

"The FTC has no problem with our sticky software... Sportsfeed.com does pop on the eighth consul at Cybererotica.com and brings about 1000 hits a day. And traffic to sportsfeed.com does not matter much at the moment because the site does not make money."

Luke: As for Cybererotica's alleged slipping numbers, according to PCDataOnline (which costs $10,000 for a subscription), Cybererotica receives the second most traffic of any adult paysite (next to Karasxxx.com, operated by RJB and MaxCash).

Luke: "Are you partnering with people you've once accused of ripping people off?"

Ron: "I don't partner with anyone I've accused of ripping people off. There are plenty of companies that rip people off. And I won't go to a public board or even talk to you about it. I see everything. We have Risky mail. I don't take advertisers. I pick them. I have my guys sign up for programs and see how they work. And if they convert well, we call them up and say, we need $45 per signup.

"We partner with Homegrown Video and Pornholio (with the Blow Me Live site)..and sold one company to Rick's Cabaret, a publicly held lapdance club. These are not people who cheat people. This email is nasty and false.

"RJB Telecom are friendly competitors of mine. We belong to the same internet organization, the Global Internet Association. We founded it. We've always been friends. We talk. We invest money back and forth with each other. We send big traffic back and forth as we do with JoeE and IGallery."

8/11/00

I'm torn between two lovers, feeling like a fool. Loving both of them (Netpond and Netsurprise, two leading webmaster resource centers) is breaking all the rules.

At 12:05 PM, I got a phone call from Sykk Boy and Anthony at Netpond.

Anthony, Netpond's Chief Operating Officer (COO): "Luke, we saw on Adultnetsurprise.com that you're going to be doing a radio show Tuesday nights with Dokk. You can't do a show for both of us. You'll have to choose.

"You'll notice that they don't spam or promote on our boards because we told them that we don't want it on our boards."

Anthony: "Luke, this goes way back. Don't you remember getting an email from me about Kaiser and all that bulls---?"

Luke: "I never got it."

Anthony: "Well, I sent you one detailed how we got f---ed over. Do you know the full story about Netsurprise and Netpond?"

Luke: "No."

Anthony: "FM came to Nick@Ilynx and said he wanted 49% of Netpond for f--- all. For a war chest to play against YNOT, because SexTracker just took YNOT over."

Luke: I wasn't aware of the intensity of the feelings between Netpond and Netsurprise. That I had agreed to do a show for Netsurprise on Tuesday nights came across as a supreme act of disloyalty to my friends at Netpond, who'd taken a chance on me two months ago and given me my first internet radio show. Though my dealings with the people at Netpond have always been positive and cordial, when forced to choose between the two sides, I had to go with Ron Levi and Netsurprise as I have a 30-month relationship with him.

XXX (a source close to Netpond): "Nick refused FM's [Ron Levi] offer because it would've taken a majority vote away from him. So then FM opened up Netsurprise and took with him Kaiser, who at the time was the Chief Operating Officer of Netpond. Kaiser started talking to the other employees at Netpond about moving to Netsurprise. The day that Kaiser and company (Kheh, John Hilton) left to go to Netsurprise, the whole staff was supposed to go with Kaiser to Ron Levi's operation. But Anthony had quit Kaiser because he couldn't get along with him.

"Everybody, including Rowdy and Jack, were supposed to leave Netpond high and dry. It was a power play. Ron Levi made an approach to everyone at Netpond, offering to double their salary, but only two of them left. John Hilton was a blow. He does beautiful art work. Kaiser did not collect invoices for advertising for six months at Netpond. We had to infuse money every month from the parent company Whitaker.

"When Anthony took over a COO, Netpond was in arrears over $250,000. Because no one got invoiced.

"Netpond is the number one resource center. Netsurprise is not even a close 12th."

Luke: "I read Netpond regularly and that's about it."

XXX: "Nobody reads Netsurprise. It is the same ten people, all Netsurprise employees, who talk to each other. Netpond has the webmaster traffic. It allows free expression. But it can't do anything that coincides with Netsurprise and Albumside etc... There's very bad blood between the two... Though on the last auction to raise money to help kids, the Netponders put the bad blood aside to go on Albumside and raise money for a good cause. Netpond gave away a $60,000 package.

"Luke, you can't attack Netpond's business and the way Netponders feed their families, then there's a big problem.

"When Ron Levi first opened up Netsurprise, it was a carbon copy of Netpond, down to the third level domain names. Then he slowly changed it around so it doesn't look anything like Netpond."

Luke: "Does Ron Levi own it in conjunction with Joe Elkind?"

XXX: "Yeah, in exchange for some undisclosed sum."

Luke: "Didn't Joe stiff Netpond for advertising?"

XXX: "Yeah, but Netpond got around it and Joe is once again advertising on Netpond."

Commando writes on Netpond: l-keford you really need to get a life or a real job... the internet is a big forum, you havent a clue to the reputations that your toying with or slandering Just some freindly advice watch your back mate...

YYY webmaster: "Go with Ron Levi, Luke. You'll get a bigger webmaster audience. You will get the power players. They have a much better technical operation. It is high end. And DOKK is the best person with this stuff. He's the best techie and a sharp nice guy. He has all the webmasters attention. Him and Ron together are a great team.

"This is the time for you to step up and get in front of the audience you've always wanted to get in front of... You'll have a ball with the radio show and stop covering the video porn business altogether you'll become so enthralled with the internet. It's fascinating. The more you get into it. As you get to know all the personalities. When you go to the next trade show, and you meet many of your sources, you will say wow. This 21-year old kid makes $10 million a year? If DOKK offers you a show, you have to take that.

"Netpond technology sucks. And their webmaster base is mainly newbies who don't know what's up. Whereas Dokk and Ron are successful and attract successful people...

"The problem is that Netpond and Ron Levi and JoeE hate each other so you'll have to choose... They're direct competitors."

Shawn, a source close to Netpond: "There is no rivalry between Netsurprise and Netpond. Netsurprise does not compete... If there is a rivalry, it is Netpond against itself, trying to make Netpond2 (Anthony) better than Netpond1, when Kaiser ran it.

"If you go to Netsurprise, you'll immediately lose half your audience. FM (Ron Levi) now has a board that he has to pump garbage traffic into to get his figures up. Their sponsors will tell you that they get no clicks from AdultNetsurprise.com. Go read their board. Every person posting there is a member of the staff. They're paid to post. There's nobody there. It's a ghosttown.

"If you get Fantasy Man stoned enough and get him off the record, he'll say, f---, I wish I hadn't started it. Nick, Netpond owner, has pissed off fewer people than FM has.

"You [Luke] want to have one leg in each camp, with your dick dangling in the water. It won't work."

Nickatilynx writes on Netpond 1/22/00: Have had calls with FM today and previously. He wanted 49% of Netpond in return for him bringing his webmasterarea,ideas and potential warchest.(No cash)

After discussions and council with Kaiser (unable to reach meat) I decided that although he brings lots of good things,he brings just as many bad things.For every door he would open,one would close.

todays call in part over Dokk I expressed to him that 49% is a lot. He accepted my decision but informed me that he would be pulling alladvertising and no longer buying clicks from the click program. I already have a customer to replace him on the click program....me.:)

The board is upsetting some people...a lot of people... however if we change it we become no different to YNOT,TN etc etc. We stay as we are. If anyone thinks my judgement is wrong,you must consider your ownposition. Things are not going to be easy for a while of that there is nodoubt. Nickatilynx

Ron Levi aka FM responds: Sat Jan 22 19:38:20 2000 - 24.113.34.124 - message #1624

Wanted to post a reply to this because I don't think Nick stated the deal quite how I explained it to him. So here goes......

I spoke to Nick about Netpond. I inquired as to who actually owns Netpond so I could potentially make a deal with them. He went on to tell me that in the final outcome Nick, Meatman and Kaiser would own 100% initially. Then of that 100% the three folks involved would dilute to owning 70% and that the other 30% would distributed to the other Netpond officials. Thatall sounded fine to me.

I then asked him what 'hot ideas' Netpond had for the next two months that he felt would be 'earth shattering'. He replied that he honestly didn't have any. I then told him that I have tons of fresh ideas that I'm about to implement with our new Webmaster Communityhttp://netsurprise.comand further that I would be interested in having Netpond and Netsurprise merge, thus Netpond would benefit from our fresh ideas and that I would also supply and inexhaustable 'WarChest' [$$CASH] to implement all of these money making ideas.

To do this I suggested that Netpond and Netsurprise could merge. Netpond would represent 51% and Netsurprise would represent 49%, we would be taking the minority interest and give Netpond the control by having 51%. It would also recieve whatever cash it needed to fund money making promotions.

Nick viewed this as having no value because I wasn't offering him a direct payment or large chunk of money. In doing my due diligence I found that in fact Meatman has not recieved any of the monies due him from Nick for over 6 months. I further found that no ownership had been conveyed to Kaiser and he had only been paid for his monthly salary. For this reason I tried to structure the deal so all involved would be sure to recieve their value.

Upon discussing this further with Nick he just said he was not interested. My personal feeling is that Nick is taking all revenues from Netpond at this point, paying the monthly salaries to all involved and keeping the rest. This does not bode well for the future of Netpond.

Also, I have been underwriting Netpond Clicks since December 6th when I found out that Nick was about to close the program. The traffic generated fron this program converts at 1:2801, it was 602,328 raw hits generating only 215 sign ups in our follow me program. Since I had to guarantee $.05 per hit the program has cost me $140.05 per sign up since day one. I could have terminated this immediately but I had an idea on how to improve this.

When I spoke about this to Nick he said he really didn't care if I kept Netpond Clicks in my program or not, that he had other folks interested in buying this traffic.

After listening to his cavalier attitude I then told him I would stop paying for this traffic at the end of the month. Also, with watching what is happening on the boards lately I see very little business being conducted and a bunch of pissing going on. So I also told him that I was going to pull my advertising at the same time because I felt that all the folks who work hard at Netpond aren't getting their true value and that it is only a matter of time before Nick causes the demise of Netpond.

I have been a staunch supportedrof Netpond for quite a while now and feel that Nick is a runaway freight train and that in the end all involved will be ripped off by him. I hope this answers some of the questions I keep getting in emails from some of the Netpond Officials.

Luke: I understand that Meatman, a partner with Nickatilynx in Netpond according to Ron Levi, has filed suit against Nick and Netpond.

I talked to Ron Levi Friday afternoon.

Ron: "We've always taken the high ground with these people. We've never done any sour grapes against them. Anthony [the new COO of Netpond] has done a character assasination over and over again against Kaiser who's never rebutted him.

"Did I tell you Luke to make a choice between the two? No, it was fine with me for you to do both. They do that with everybody. Everybody at Netpond understands that if they come over to Netsurprise, they're done with Netpond."

2/16/01

Clash Of The Titans - RB vs FM

Rich Botto's MaxCash board hosts a thread entitled "Cybererotica Going Down."

FM aka Ron Levi, owner of Cybererotica, responded on the Max Cash board: CyberErotica is not going down - it's going up - hook up with us and make bigtimegreen!!

RB - I find it very surprising you allowed this thread to be posted on your board - I guess I'll post on my board that RJB is again 10 days late with their checks, etc. etc. Remember, you drew "first blood" as Rambo said....

The bottomline is the money - BigTimeGreen as I call it - all of our Webmaster Checks will be sent out "ON TIME" tomorrow - all $3 Million Dollars - just like we have been doing for the last 5 years, twice a month - $6 million per month, like a clock!!

As far as the employee layoff - OMPI employs people - I guess that some were layed off - has nothing to do with CE - that's his call as they are his employees and managed by him - not CE. ....and since we're airing dirty laundry all of a sudden - RB - We've continued to send your affiliate payments while your other "buddies" played scared and paid you by offsets - shown you "Maximum Respect" just to get dissed by you...

I've done this even with the knowledge that you've spread bullsh-t rumors about me reporting you to the FTC - well let's get it out in the open - you must think I'm g-dlike - while having the FTC investigating CE - I was able to say "look Mr. FTC - don't investigate me - look at RJB - wow - what power I must have - yeah, give me a break - it's sad when I see a guy who professes to be the" bomb" on the net not being able to take responsibility for his own f-ck up or actions - when you put those dialers up - you brought bigtime heat to yourself, why don't you just accept the fact you messed up instead of blaming me?

At the time you started incorporating dialers into your programs I made a post on CONDOM stating we were not going to use dialers because I thought they would bring heat... ... remember when Serge did the dialers for Peter Knoble way back and had an entire country's long distance billing in, Moldova, brought down - I remember - I guess you forgot, I tried to indirectly give you a hint by that post - sorry you missed it!!

You come from audiotext, just like us - how could you not have known it would bring you "CONSUMER COMPLAINTS" when folks started getting $700 phone bills and if they didn't pay, their phones would be disconnected - that's what generated tons of "CONSUMER COMPLAINTS" to the FTC

Also, I've told Alyssa that MAXCASH's traffic to our programs has dropped of to nothing while all of our traffic to Maxcash has remained the same - all of our 404's and headlines in RiskyMail and Teen-Mail rotation - now I'll do something about it... I'm pulling all RiskyMail and Teen-Mail Maxcash Banners - I'm going to redirect all of our 404's to someone else that will act professional and appreciate the business.

Here are our January 2001stats http://63.67.231.12/rjb.jpg
http://63.67.231.12/rjb2.jpg

Webmaster's you don't have to like us, you can even hate us - but always remember - our money spends just like anyone elses, it's just business, not a popularity contest. We started paying Webmasters bigtimegreen before anyone else - and we'll continue to do so - our programs convert better than anyone's and you always get paid ontime because we really care about people whether you want to believe it or not...

Watch for our new programs coming out that will blow away RB's EE and anyone else's email programs - it will have 3 different payouts and it converts at 1:5 - pay attention, it doesn't cost any money - we've always stayed on the cutting edge and always taken the lead - no reason for us to stop now!!! as Jim Carey said in the Mask ....somebody stop me, I'm smokin'!!! SPAM http://cybererotica.com/money.html

I'll bet this post gets pulled real quick :-) peace out! fantasyman

one more thing.... RB are you aware that I passed on Razor and then it was brought to you? Prove me wrong - I couldn't see how you could advertise any adult in it, just another Maxim knockoff - only firsts make the big bucks!! Good Luck!!

RB responds: FM - Why doesn't this surprise me in the least. If you know anything about this board, you know it is open...There are as many Max Cash bashing threads as there are good posts about our program. We allow it all and we do not censor...I get KILLED on this thing regularly. But, did you see me contribute to this forum? No. Did you see me bash you? No.

Now you come in here like a 5 year old, attack me, my program and my business decisions. I'm not going to censor that either. Once again your ego overtakes your common sense. How about giving me a call before attacking? How about returning Aly's calls? I know she's been calling you for two weeks.

Spreading BS rumors about the FTC thing? I told you personally what I knew to be fact, the rest, well, you believe what you want to hear and I will just keep working. My banners to you were still in place during the whole thing weren't they? As for Razor, it has nothing to do with adult and I was in negotiations on that deal at the same time you were. Regardless, thanks for wishing ill on that as well.

You're coming out with all these great programs? Great. You're going to bury me? Great. I really don't care, man...Blow your wind. But, when your pissed off, which appears to be quite often, learn where to direct your anger, man.

Just as a side note, as I've mentioned, Ron, the FTC thing had little to do with dialers and no evidence of fraud to date has been brought against us. As for being the "bomb"...what the hell is that? What are battling for who is sitting at the "cool kids table"...Come on, man...Calm down. Drew first blood...LOL...A little paranoid, man.

FM aka Ron Levi responds: RB - your the best spin control person I've ever seen - you're the Teflon Don - it all just bounces off of you... You accuse me of acting like a 5 year old? No, I'm a businessman trying to protect my business, just as you do, this thread is a complete attack on my company. We've paid out over $250 Million to Webmasters since Feb '96 and I think I just might have something to protect just as you do.

You want to take this off the boards - give me a call - you know my business number and my cellular number - I'm leaving here 11am pst to take my 9 year old Son to Disneyland for his birthday - I'll still have my cell phone - if you don't have it, just ask JoeE for it..... You say why didn't I give you a call - you've never been available by phone, you know that and I know that. I tried to talk to you numerous times by phone, I called your cellular phone, left messages, no response. Every Vendor in the industry knows that about you, it's common gossip amongst us. Aly called me once, I was in Daytona Beach watching the 24 hours of Daytona, we had a car in the race, I couldn't hear her, I asked her to call me back on Monday, she has my cellular number, she never did. And why was I calling her in the first place, because your traffic to use tailed of to nothing why we continued to send you traffic from RiskyMail and Teen-Mail as well as all of our 404's - anyone can type in http://cybererotica.com/error and they will see this is true.

You never told me anything about the FTC thing you knew to be a fact - you just had your people spin it out in ICQ's - I have numerous ICQ logs that folks sent me evidencing my statement. Our banners may be in place - if nothing changed by looking at your position on PCDATAONLINE you would be earning the same $86k to $150k we were paying you since the New Orleans Show....

As for RAZOR - I never wished you ill on Razor - there's your "spin" again - I just said that only firsts make big money - that's my opinion.

Yes, we are coming out with new programs, once again your spin, you interpret that to say that I said we're going to bury you, I never said that. Boy you should have been Al Gore's spin monster - he would have won!! More soin.... you speak of my anger? RB it's obvious you haven't spoken to me for quite a while - I've put it in check for over two years - ask anyone. My post wasn't anger - my post is fact.

As for the dialers and the FTC - all I said was that was the FTC "hotbutton" that brought their attention to you. In reading through your FTC public documents I would say the affidavit that VISA supplied the FTC is what brought you your real heat - read Martin Elliot's statent again - you should probably sue him and Visa.

Now I've even given you a way to cash out big time with Visa. RB as you can see I'm very calm - I just love to watch you do do your thing - spin, spin, spin...... peace out!

RB responds: FM - I love the Telfon Don comment...LOL That post was more reasonable, man. Just so you remember, we did speak about the FTC thing and I did tell you the one thing I knew as FACT...Not going to get into it again and once I told you about it, it was dropped. No spin on the way you came in here...I've seen Hurricane Ron before...Just don't shy away from it like others do. As for ICQ...I don't even have it...Privately, however, I would love to see the logs. As for this thread bashing your company, you're right, it does. However, if you read any of my posts, you will see I don't condone it and when my program gets bashed on MY boards, I still do not censor it. I try to promote positive conversation here. "Common gossip amongst the webmasters"? Please tell me you have better things to do with your time than play washer woman with other webmasters spreading gossip about me...Please! If you want to travel down that road, I could write a book about all the s*** I've heard out of your camp about your feelings regarding me...Personally, I don't have time for that crap. I'm available...Sometimes it may take me a while to get back to people, but I am running 2 companies and working my ass off. I never said you stopped sending me traffic...Don't know where that came from. Listen, Happy B'day to your son and go have a great time...Relax...I'm taking a few days to myself as well and getting the hell out of dodge. You want to talk, Monday or Tues...Absolutely fine by me.

Opti writes: Ron, Would you consider re-assuring or apologizing to the 182 webmasters who honestly thought they were contracted to work for you before taking your son to disneyland today? Some of my friends are feeling a bit confused and even worried about paying the bills next week. No one said thats your problem at all as far as I can see but it does seem strange that a guy as well liked as you were last week doesn't seem to have any feelings about your people.

FM responds: Opti Since you know all of these people you refer to, first of all let me say it's not 182 people. It's not 100 people that work for OMPI. I just wanted to get the number of employees of OMPI corrected before I comment. CE has never hired or fired any of the people you are speaking about - it has been OMPI always. If you look at the sites they work on in whois you'll see also that OMPI is the owner of all of those websites these people work on - not CE All I'm saying here is that I had no knowledge of what is going on in OMPI's camp - I had no say in any decision making with regard to this current issue with his employees I will tell you that OMPI is contracted to us for search engine work "ONLY" and we handled his payroll while we did, to help him out because he's been a friend of mine for 32 years.

I will further tell you that I have called him since seeing these posts which I had no knowledge about and talked to him about this issue. The *fact* is that as of a week ago he took over his own payroll for his employees. All we were doing was helping him out administratively. He said he is hiring back the people who were productive and that anyone who wants to talk to him has his email address. I am telling you exactly what he told me because I still don't know exactly what happened. Not one CE employee has been layed off. I hope this helps you out and explains our participation in this matter. Now with that said, it's time for me to leave for Disneyland so I don't get in trouble with my Son.

ps RB at this point I'm not going to respond to your post back to me, all we're doing is creating the carnival atmosphere everyone likes to see and that's the exact reason I stopped posting on all boards long ago :-) I've never posted on this board before and I probably won't again. Aly has my cell phone - she's welcome to call. RB, and right back at ya, you have my cell phone number - you can call me anytime you like :-) Have a great weekend, you relax too, we both deserve it Looks like the Webmasters drew us out for another shoot out in public, something you and I never did before, so it's time for both of us to get out of Dodge ! Thanx for the Birthday Salutation to my Son, I'll tell him.

April 17, 2001

Voice Media Settles With The FTC

Voice Media owner Ron Levi aka Fantasyman has taken to Netpond to defend his company from attacks by anonymous posters.

Today the Federal Trade Commission announced a tentative settlement with VM over credit card processing issues prior to May of 1999.

Fantasyman writes on Netpond: Slim: If you read the entire complaint it leads back to before May 1999 when DMR was our processor. Even though they were our processor and not billing properly, it was still our responsibility.

This is not a judicial settlement, that means a complaint was never filed with the court. It is an administrative settlement.

We did not have to pay any redress, there were no fines or penalties or restitution of any kind. We didn't have to post any bonds like others have been made to do.

We've been cleared to continue to do our Free Trials, since we took over our own billing after April 1999, we use full disclosure and have passed FTC scrutiny.

As part of the settlement VMI made no admission of liability and denies the charges alleged in the complaint. The unrefuted evidence does not support a finding that VMI defrauded consumers in any way.

VMI believes that this is why the FTC agreed to an administrative settlement with no order of fines, penalties, or restitutional remedies against it.

So spin this any way you like, call me a theif, I'm not, if you identify yourself, I'll sue you for defamation.

We're still here, and plan to be for a long time.

From the FTC announcement today:

Web Crammers Settle FTC Charges

Consumers Charged For "Free Trials"

Web site operators who billed consumers for "free trials" have agreed to settle Federal Trade Commission charges that their practices were deceptive and violated federal law. The settlement will bar the defendants from making false or misleading statements - including misrepresenting whether consumers will be charged for goods or services during a free-trial period - and will bar billing before providing clear and conspicuous notice of all terms and conditions. The settlement also will prohibit the defendants from changing the terms of their agreements, cancellation or refund policies without first giving consumers the opportunity to cancel the membership.

Voice Media Incorporated (VMI) and its officers, Ron Levi and Paul Lesser, are based in Carson City, Nevada.

In the complaint detailing its charges, the FTC alleged that the VMI operates adult content Internet sites and sells memberships for $19.95 to $34.95 per month. The sites promote membership by periodically offering "free" 7-day trial memberships. VMI asked those signing up for the free trials to provide credit card numbers for age verification. The complaint alleged that VMI represented that it would not charge membership fees to consumers who affirmatively canceled their trial memberships within the trial period. Contrary to that representation, VMI sometimes charged monthly membership fees to consumers who canceled within the trial period. Additionally, the complaint alleged that VMI immediately billed the credit cards of those consumers who signed up for the free trial at the outset, treating the submissions of credit card information as authorization to bill the accounts. However, consumers did understand that they had to take affirmative steps if they did not want to become members and be regularly billed.

The settlement will bar the defendants from making false or misleading statements, including false statements that they will not charge consumers during a free-trial period; that their services are free; and that a request for a credit card number is for age verification only. The order also prohibits them from requesting credit card information except for purposes of age verification, without giving consumers clear and conspicuous information about membership costs and the length of any free trial; terms of cancellation; and how consumers can provide notice of cancellation. The order prohibits the defendants from billing consumers who have not agreed to purchase their goods or services and from automatically billing consumers after a free-trial expires without first notifying the consumer in a clear and conspicuous way that the trial period has expired and billing is about to begin. It also prohibits the defendants from changing the terms and conditions of their agreements without giving consumers 15 days advance notice and an opportunity to cancel. The agreement also contains certain bookkeeping provisions to allow the Commission to monitor compliance.

Voice Media says:

The [FTC] inquiry, part of an industry-wide investigation of the trial membership practices of Internet entertainment companies, resulted in an administrative settlement as to VMI not involving any court filings against the company, no court orders, no payment of fines, no penalties and no restitution of any kind. Furthermore, although the FTC examined VMI's free trial membership practices, the settlement does not prohibit VMI from continuing to offer free trial memberships.

The administrative settlement grew out of the FTC's inquiry of administrative error by a third party processor which occurred prior to May 1999. Since then, VMI assumed its own customer billing, terms and conditions and customer service functions to ensure full disclosure to consumers. Contrasted with VMI's administrative settlement, a number of others within the industry have been the subject of United States District Court complaints, Stipulated Court Orders, restitution Orders and even Court supervised Receiverships.

VMI continues to be a leader by forging new industry standards through its efforts to develop appropriate consumer disclosures in cooperation with the FTC. We applaud the work of the FTC in its own efforts to prevent consumer injury and to aggressively address deceptive and fraudulent activities, which might otherwise undermine consumer confidence in Internet transactions. For questions or comments please contact James A. Steele, Esq. at (818) 999-0106.

Frank writes: the FTC's paper work in the case of CE/VMI looks like someone was determined to do the minimum amount of work ... just going through the motions ... a few desultory paragraphs with no fire and no steel in the middle ... contrast that with the hundreds of pages of filings, court receivers, yaddacetera ...

Auto writes: Ron Levi places blame for the FTC complaint on DMR. Mr Levi was a strong supporter of DMR. A lot of people got burned when DMR went under.

May 10, 2001

FM's Cybererotica planned this party way in advance to run in conjunction with its big trade show for webmasters. Cybererotica wanted to keep these webmasters hostage, feed them information, feed them, entertain them, and hope that they will sign up for all your programs.

Some competing internet companies didn't want to pay FM a thousand dollars to help sponsor the show.

SexEntertain was originally going to throw a Cinco De Mayo cyberparty with Mike Rick from Cybersynergism but Mike's house wasn't ready in time.

So Kimber goes into the chat the other day of AdultGossip.com's radio show and she got lambasted by FM. It got heated. They go back and forth. And FM tells her that she's not welcome at the hotel. Then Friday night, Kimber showed up at the hotel. It was a ballsy move on Kimber's part. And FM told her that she wasn't welcome there. But she was certainly within her rights to see other people at the hotel.

Kimber spoke up for herself and it got ugly.

The Cybererotica trade show in Los Angeles last weekend was a tremendous success, attracting several hundred people, most of whom were new to the business. When you've got girls eating pussy in the middle of a room. With a bunch of amateur porn stars getting down surrounded by a bunch of amateur webmasters trying to get into this business. It's like Avon. You're closing.

I saw looks on people's faces. Holy hell! This is what the porn business is all about. I want to quit my day job.

The LA scene was there - Vivid, IGallery, PornKings.com. JoeE had a suite at the Mondrian where he threw these crazy bashes.

Cybererotica consultant Lee Noga writes: CyberErotica and numerous sponsors put on the AWE event and the night time events are part of the convention and sponsorships, Ron does not benefit from these parties, its the other sponsors who do...their signage is everywhere, and CEN was a 50% sponsor of the party, so its not just a CE event....so stating the hostage crap is incorrect, CE gets no more exposure than a regular sponsor and often gets less, so lets not take this out of context...

Kimber does not know when to back off, and has only been marketing for 2 weeks, and did not even know who FM was, she should learn the terrain before going mouth to mouth with anyone. Several webmasters talked to her about her behavior and what they witnessed, and she was remorseful and apoligized on Saturday on the boards so I am told.

Any webmaster company that shows up to the AWE shows without being a sponsor is asked to leave, this has been policy set after the first Miami show. Its only fair the AWE sponsors get the chance to spend time with the webmasters as well as show them a good time without interference from outsiders.

There was no way any tour would have accepted Sex Entertain as a sponsor last minute after all that preceded the event given their actions and attitude.

I personally spoke to Kimber and was gonna suggest they leave the immediate premises but she said they would NOT be back on Saturday and it was like 2:30AM outside the front of the hotel where many hung out and smoked, and it was her right to stay on the outside of the property if she wanted too.

Had Sex Entertain conducted themselves more professional [ie-Kimber], they could have had a sponsorship, they clearly had no respect for the event, and had no business coming anywhere near the Marriot.

If you want to harvest webmasters, spend some money, take part in whats happening, but not cease an opportunity because the webmasters are housed under one roof taking part in events paid by numerous companies [CyberAge, CCBill, Xpays, CEN, AVNonline, VIVIDVIP, PornHolio, WebInc, HerbalO, Pornication, RoseCash, National Net, EMG, SilverCash, Sweet Entertainment, NetBilling, Net Dialers, Content Club, Conversion Cash, BabeNet, Shaw Internet].

The show as fantastic, I would say 80% or more attendees never had been to a webmaster event [we did a show of hands], about 250 attended the seminar.

PS-- FM never just lambasts anyone without firing numerous warning shots, I have been present when some ppl disregard the shots and opt to go toe to toe with him, I have never seen FM start crap, he is not that way, if he does pin somebody it was of their own doing that wanted to take it there. When that happens FM is no different than anyone else, he will go for the win.

Arbitrator Makes Preliminary Ruling In The Trade News Vs New Destiny Dispute

June 7, 2005

Judge's ruling on PDF. Background on the dispute. XBiz reports.

I spoke to Spike at Homegrown. He said the judge's ruling is muddled and he doesn't think it is a victory for either side.

"It was a very confusing ruling," said Spike Tuesday afternoon. "I am going to have to have you talk to Dave [Olsen]. We've got an audit of all his [Ron Levi's] stuff, so to me, that's a victory. I don't see what we got that was a victory either."

Ron Levi responds: "The Arbitrator's ruling is not muddled or confusing, it's very clear. There was no copyright infringement, there was no evidence of a shave, the assignment to Trade News was valid. All other allegations were dropped. There will be an audit, if the audit comes up in our favor, and it will, they will be further ordered to pay a portion of our legal bill and probably the expense of the audit. It's just like I said it would be when this all started, a contract dispute, no wrongdoing. Homegrown made some very damaging public statements about me personally that have been proven to be not true."

I remember when I first read Homegrown's initial filing in this case (March of 2004), I thought that Ron Levi had to be a crook. Then the legal paperwork piled up and I was glad I didn't need to give an opinion, because I was out of my depth.

I got this press release Tuesday afternoon from Ron Levi's team:

Trade News and Voice Media Vindicated, Ron Levi Pleased with Judges Ruling   

(LOS ANGELES) -- June 7, 2005 -- Trade News and other Defendants who were sued by New Destiny Internet Group, LLC the parent company for Homegrownvideo.com are extremely satisfied with an arbitration Judge’s Interim Order issued today that categorically rejects HGV’s claims of copyright infringement, invalid assignment, and other alleged related wrongful conduct and that finds no monetary award against the Defendants.  (See page 7 of the Interim Order).  

Trade News requested early on in the process that an independent audit be performed (See page 8 of the Interim Order).

New Destiny opposed any such audit at the time Trade News requested it (See page 8 of the Interim Order which states that "Trade News' request was opposed by New Destiny") - now the arbitrator has embraced Trade News' request and ordered an independent audit with the costs of such audit to be divided evenly by both sides.   

The Arbitrator's Order rejected New Destiny’s other claims against Defendant Ron Levi.

  "We are pleased that the Arbitrator has rejected New Destiny's core claims of Copyright Infringement and Invalid Assignment. Voice Media and Trade News look forward to complete and total vindication and finality in this case once the independent audit is completed" says Ira Rothken defendant's counsel. 

I call New Destiny's attorney Dave Olsen. "I got a press release from Ron Levi's [team] claiming victory," I say.

Dave: "He should read the opinion a little more carefully then. The judge has ordered an audit on the shave claim. The judge did deny the infringement claim. The judge is going to appoint an auditor to look at the books and then there will be a final opinion.

"He denied their cross-complaint in its entirety.

"It's your standard mixed-bag-decision."

Ira Rothken, attorney for Trade News, calls me back at 3:31pm. I've gone through several headlines by this point as I try to process and upload the story in real time.

Ira: "The headline [then] reads: 'Arbitrator Requires Audit.' We were the one who requested the audit and they opposed it. In his own ruling, the arbitrator points out that we requested it and he finally gave it to us.

"This is a further manifestation of the spin you saw from day one in this case."

Luke: "I'm processing stuff as it comes pouring through in real time."

Ira: "I will applaud you though. The technique you use allows you to scoop everybody else known to mankind by using this real-time blog approach. It kills modern media."

Luke: "It has its weaknesses."

Ira: "It has its weaknesses, but after criticizing you, I'm going to applaud you too, because no one can compete with this."

Luke: "What's the most important thing that comes out of this preliminary ruling?"

Ira: "With the exception of the arbitrator embracing our request for an independent audit, the complainant loses every other claim: copyright infringement, invalid assignment, trademark, bad customer service claims. Every one of these claims were rejected by the arbitrator after he had a robust trial on the merits. We had witnesses who were cross-examined, who gave testimony under the penalty of perjury.

"Ron Levi, Trade News, and Voice Media are very happy with the arbitrator's interim ruling. We look forward to this independent audit so we can have total finality.

"It is our view that the independent audit is going to further confirm the arbitrator's initial view -- that the plaintiff was paid what was owed them. The arbitrator points out that they [New Destiny] have not proven there were any underpayments made.

"Furthermore, it is likely in our view that an independent auditor is going to find that Trade News overpaid New Destiny. We're certainly going to ask the arbitrator to give back any overpayment."

Luke: "Did they dismiss any of your claims? Your cross-complaint?"

Ira: "Our cross-complaint was at its core a declaratory relief case asking the court to declare that we are not in copyright infringement, the court did that, that we're not in trademark infringement, the court did that implicitly... That we did not breach the contract by providing poor customer service. The court granted our declaratory relief on that because whatever claims were discussed were rejected.

"For the plaintiff to say that our cross-complaint wasn't successful is misleading... We did ask the arbitrator to award to the respondents any over-payment. We expect to get those. We also requested costs and attorney fees. We're optimistic about getting those."

Luke: "Did anything surprise you in the judge's ruling?"

Ira: "No."