Local Onliner

Merchant Circle threw itself a party last week at Nola’s in Palo Alto to celebrate a year in business and registration by 140,000 small businesses. I’m on their Evite list, so I knew about the party. It is probably a good thing that some of their registered small businesses didn’t know about it, however. They might have come with knives (or worse!)

While the site actually offers a terrific set of free tools and services – truly — it continues to pump up its user base by auto-dialing small businesses, and getting them to rush to their PCs to see if their customers said terrible things about them. Of course, it is just a come on. In many cases, there are no reviews. Just a place to sign up.

I can’t imagine co-founder Ben Smith, when he started the site, was thinking of developing a list of disgusted small businesses. At the time, he denounced the Yellow Pages as a “mafia” and vowed to be the true, tech-savvy friend of small businesses. His original concept was that local businesses, up-and-down the street, would sign each other up for the benefits (hence the “Merchant Circle.”)

A year later, the letters that I get on a regular basis would argue otherwise. Small business owners are writing to me because they have no way of calling or writing to Merchant Circle to complain. Phone numbers and physical addresses don’t appear anywhere on the site.

“I got a phone call today at work,” writes Brian Smith, a barber known as the “long haired hippy.” “It was a recording that ‘claimed’ I had a review posted by one of my customers about the service at my barber shop. The recording went on to say that all I needed to do was log on to MerchantCircle.com and type in the business phone number. Then I could read this ‘review.’ Well, I typed in the number. Then the site told me that I had to register to read the review. This was free registration, or so it said. I will soon find out. So, I registered. There was no review. I had been tricked.”

Another reader, who asked not to be identified, wonders whether Merchant Circle is probably making a heap of money from Google AdSense by steering people to its site — legitimately or not. Here is what he says:

“I was called by Merchant Circle (though my phone number is on the Do Not Call List), informed that my business had been reviewed, and told to claim my business to see the review. MC’s call was illegal…but maybe they could claim ignorance and blame old data. But the information about a review was a straight up lie. There was no review and they knew it. And their automated claiming system failed.” Apparently, my reader was given the same phone number of a daycare center that had failed two years ago.

“Which set me to wondering — since each page of the site is peppered with Google ads, how much are these guys earning from AdSense pay-for-clicks?”