Did you ever hear of Replay TV? They started up at about the same time as TiVo and did pretty much the same thing: they developed a personal video recorder that stores television shows on a hard drive. Whenever both companies appeared at tech shows, critics would rave about Replay's technology and turn their noses up at TiVo's.

Replay died just as TiVo hit the big time.

So if Replay had such a great product, what went wrong? Well, it seems to be the same thing that's going wrong with Chitika at the moment.

I still think that Chitika have a great product. Their ads look good, they're fun to mouse over, packed with information and they're easy for publishers to control. I've had some pretty impressive CTRs with them.

Like Replay, there's nothing wrong with Chitika's product. But there seems to be plenty wrong with what's happening on the business end of the company. First there was the audit that slashed everyone's incomes. That came out of the blue, hit everyone right where it hurt and destroyed much of the trust and enthusiasm that had built up around the company's eMiniMalls. Now there's a delay in paying the results of those same slashed November earnings -- and that delay wasn't announced until after the payments should already have been made.

The people at Chitika are a pretty smart bunch and they went out of their way to make eMiniMalls friendly to publishers. I don't know how they messed up so badly or who's responsible for it, but I sure hope they going to get it fixed (although even if they do, I think they're g

oing to have to work pretty hard to win back people's trust.)

But I can't imagine a product as good as eMiniMalls is just going to disappear. I've already seen traditional ads designed to look exactly like eMiniMalls on Web pages. They weren't interactive and they looked too much like ads to be very effective but it's pretty clear that ads like eMiniMalls can be a great way to generate extra revenue. Users love them.

Even if Chitika don't get their act together, I'm pretty confident that someone else will. I'm going to be keeping a close eye on Chitika to see if they can solve their problems... but I'm also going to be watching out for other companies to see if they're going to take advantage of Chitika's big idea.

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