Ed Magedson and His Racketeering Operation Called ‘Rip Off Report.com’
We recently wrote an article on Rip Off Report and it’s ties with google, now Commercial Investigations, Inc. would like to go into more detail about Rip Off Report.com itself. Ed Magedson, the creator of R.O.R. (rip off report.com) one might consider him “The Godfather” of an online Corleone family or if that analogy seems a bit dated, a Tony Soprano of the internet. Ed has a cutting edge way of extorting businesses. In every mafia movie, T.V. show, or story, typically thugs and gangsters show up to law abiding businesses with baseball bats, and guns asking them if they would like to pay for “protection.” Many people may think this is a “thing of the past” Ed Magedson is doing this to companies via the internet. Instead of physically damaging a business or it’s employee’s Ed attacks reputation, and image. Sarah Fenske from the Phoenix Times had an interview with Ed Magedson, and wrote this article, “The Real Rip Off Report”
http://www.phoenixnewtimes.com/2007-02-01/news/the-real-rip-off-report
Sarah writes this on page 6 of her article,
“It’s because, as the number of lawsuits against Magedson has increased, lawyers have learned about Magedson’s willingness to take money from companies to mitigate bad complaints. He calls it his “corporate advocacy program.”
Here’s how it works: Businesses pay Magedson a fee, plus a monthly retainer. And in exchange, Magedson makes “EDitor’s comments” next to complaints — generally saying that the claims are false.”
Ed and his lawyer defend this “corporate advocacy program” by Ed needing this money to keep the website running. A minimal fee would be understandable since websites have a cost for running them. However if Ed was doing this program for the right reasons, it would be an “at cost” program. In multiple cases Ed charges six figure price ranges and a monthly retainer.
If Ed was not extorting and had a legitimate “at cost corporate advocacy program” the cost of editors and website hosting, maintenance, would cost businesses no more than a few hundred dollars to get their slander taken off the website, and allowing Ed to make a profit. Web hosting is such a competitive market, using godaddy.com you can have an extremely reliable website, with unlimited storage space and transfer for $12 or $13 bucks a month. The only actual costs you are looking at, would be an editor, website manager, and money in Ed’s pocket. (If Ed hired efficiently he could even have a website manager double as an editor) So, imagine if Ed charged a company $200 one time fee and then a $15 a month retainer. This leaves the website cost being covered by just one business signing on to the corporate program, leaving all other business’s retainers as pure profit. The $200 would be to pay his editor and cash in his pocket, not bad for a job that would take a whole 15min or less to go look up the negative comment and delete it. Then repost a new one saying this previous comment was found to be slander by a competitor, or something of the sort. Even raising the ante on this, a one time cost of $5,000 and a monthly retainer of $50 a month, his profits would be through the roof.
So why does Ed Magedson charge some companies anywhere from $100,000 to a reported $800,000 fee to remove comments. Oh wait, maybe an additional cost to the website is paying someone to do Search Engine Optimization on websites with slander being written on them by writing tags, linking websites and keywords without consent of the website owners. Also putting incorrect keywords and tags to company names which is borderline illegal and most search engines do not allow such tagging to be done. Google typically disapproves of this with every other website it indexes but lets R.O.R. get away with it. Google does not allow duplicate sub domains to be indexed yet however Google indexes thousands of duplicate pages from various domains and sub domains that Ed owns. Maybe if Ed Magedson cut back on NEGATIVE search engine optimization costs his website costs would not be so high. There is a fine line between capitalistic profit and extortion, it clearly has been crossed.
At this point, Ed isn’t perfect but he doesn’t look like too bad of a guy right? He is just trying to make A LOT of money from his idea. That is until you hear the other part of this racketeering operation he has. In many known cases, Ed and his “friends” he often refers too, write their own negative comments and slander against companies. Ed also allows known slander to sit on his website, and he does nothing to these known comments unless one pays him. To wrap this whole thing up in a nutshell; Ed Magedson and his friends write extremely negative slander on your company with no factual basis, then the few customers who may have actually had a bad experience completely over exaggerate the actual experience they have had to keep the “flow” going that was made by Ed, then by the time your company finds out they are so knee deep in negative comments it will cost them six figures to erase these comments. Rip off Report, a very modern, sophisticated shake down.