Amended Colorado Affiliate Tax Goes to Senate

Rebecca Madigan of the Performance Marketing Association (PMA) wrote an update on the Colorado Affiliate Tax (HB 1193) today. The tax measure, which at last word was being discussed by the state senate finance committee, has been passed on to the state senate with a critical and potentially beneficial amendment.

In her post, Ms. Madigan states,

We were given an opportunity for an amendment that would exempt online affiliates from establishing nexus for out of state retailers. It would give the retailers safe harbor of 30 days to terminate any affiliates who did personal marketing or selling, which would establish nexus, thereby requiring out of state retailers to collect sales tax for online purchases.

The PMA fought the introduction of this bill with a lobby effort led by seven professional lobbyists. They were joined in the fight by over 150 affiliates from Colorado, an organized turn out that obviously surprised state legislators.

That level of organized opposition to the bill won the affiliate marketing community nearly 15 hours of negotiating time with legislators in a bid to water down or kill the bill. At this time, a draft of the amendment is not available but the senate committee promised modifications to the bill would be completed by Monday before the bill is presented to the senate for vote.

Ms. Madigan suggests advertisers seek legal counsel when the amended bill is passed saying,

This amendment, if completed as promised, may make some merchants comfortable enough to continue working with Colorado affiliates. For others, it may not. The amendment needs to be completed and available for review, and advertisers should immediately consult legal and tax experts.

Congratulations to everyone who worked together to fight the Colorado Affiliate Tax. Though a tax measure is virtually certain to pass sometime next week, the amended version should be enough to keep most advertisers available to affiliates in Colorado.

For more information, please visit the Performance Marketing Association website.

Virginia to debate “Amazon Tax” Law

The Virginia State Senate is considering a tax measure similar to the Affiliate Taxes charged in New York, North Carolina, Rhode Island and currently being debated in Colorado.

Virginia Senate Bill 660 was introduced yesterday by Senator Emmett W. Hanger Jr. from Augusta Country. According to the bill, if an online retailer enters into an agreement with a resident of Virginia in which that resident receives some form of consideration for referring potential customers to the online retailer, that relationship constitutes taxable solicitation. Such references can take the form of a link.

Perhaps the strongest opposition to Affiliate Taxation is taking place in a New York State courtroom where Amazon.com and Overstock.com are jointly challenging the New York State affiliate tax as unconstitutional.

To make your voices heard in Virginia, please visit the Virginia.Gov Government contacts website.

Colorado Affiliate Tax Update

STORY UPDATE (Feb5, 12:40pmET) – An amended version of the Colorado Affiliate Tax Bill (HB 1193) has passed the senate finance committee and will be forwarded to the state senate for a vote on Monday. Please see: Amended Colorado Affiliate Tax Goes to Senate for more information

We have received word from sources watching the Colorado Senate finance committee in Denver as it reviews a dozen separate tax measures moving through the state legislature.

One of those measures, House Bill 1193 is an Affiliate Tax which the Performance Marketing Association suggests will decimate Colorado’s affiliate marketing community by forcing over 100 affiliate programs to retreat from Colorado.

Janice Roetenberg, Director of Corporate Marketing for Adperio reports that as of last night, the finance committee had not gotten around to reviewing HB1193. The committee meets again today but there is still time to write to state congress representatives explaining the damage an Affiliate Tax will reap on the affiliate marketing sector.

To find a Colorado State representative to write to, please click here.

SEMPO’s 6th Annual State-of-the-Market Survey

Search and Internet marketers are invited to participate in SEMPO’s sixth annual State of the Market survey, which opens next week.

The survey takes a look at the three major search marketing service sectors; organic, PPC and social media, and asks respondents a short series of questions about their experience in each sector. The results have traditionally provided a thumbnail sketch of the health, wealth and future directions of the search marketing industry as a whole.

“One of SEMPO’s major contributions to the search marketing arena is the publication of the results of our State-of-the-Market Survey. Now that we are in our sixth year with the survey, we have a proven track record for compiling empirical research that seriously impacts those working in the search marketing industry,” said Marc Engelsman, member of SEMPO’s research committee and Vice President of Client Programs and Services for Digital Brand Expressions. “We’re very appreciative of marketers taking the time – just about 10 minutes – to participate in the survey because the more people who participate, the bigger the impact the survey will have.”

Open to all SEM managers, professionals and practitioners (regardless of SEMPO membership), the survey provides the only annual examination of the search marketing industry. In other words, this is the only statistically accurate annual history of conditions facing the overall industry. For that reason alone, participation is important. As a bonus (and a way of saying thanks), survey participants will receive a free copy of the final report which SEMPO suggests is a $249 value.

The State-of-the-Market Survey is open for participation through Monday, February 22, 2010. Preliminary results will be available in early March with a full report expected in late March.

Breaking Teeth on Golden Eggs – Affiliate Marketing Taxation

Once upon a time there was a hard working farmer with the strange but true name, The State of Colorado. His friends just called him Farmer Colorado. Through diligent labor, planting, tending and planning, Farmer Colorado built a strong and prosperous economy for himself and his kin folk.

Alongside his fields of grains and corn, Farmer Colorado raised geese. Farmer Colorado was in fact known for having one of the densest gaggles of geese in the nation.

One day, Farmer Colorado noticed that one of his geese had started laying one solid gold egg per week, along with the normal eggs she regularly produced. It took a few minutes for Farmer Colorado to wrap his head around his sudden and totally unexpected wealth. This goose not only continued to lay the odd golden egg, she began to lay them more frequently.

Farmer Colorado found himself in the rare position of being a farmer who was financially flush. Revenues from the sale of golden eggs paid for the goose roost, a year’s supply of Goosie Chow, and enough water to irrigate the roost and quench any thirst the entire gaggle of geese might have.

A few months later, Farmer Colorado noticed several other geese had started laying golden eggs. Not only was the goose roost able to pay for its own upkeep, revenues generated allowed the roost to grow and diversify its output to develop new income streams. Farmer Colorado was able to expand the roost. He even developed a system by which other farmers could easily raise gold egg laying geese themselves.

Almost a year into what was being called the Colorado Goose Roost Miracle, two of Farmer Colorado’s cousins from the city dropped by the farm with their families for dinner. Though they had each inherited shares of the family farm when their father died, and each had covered their share when commodity prices were too low to cover costs, neither cousin had ever really taken an active interest in learning how the farm was run.

They were however city smart and thus knew a lot about managing large sums of money. Since they both had business backgrounds, Farmer Colorado figured they would be interested in helping him manage the growing business of sharing his wealth. After all, one cousin worked selling mutual funds and the other held what appeared to be an enviable investment and real estate portfolio.

The two cousin’s side of the family had moved to the city from the farm ages ago and, like most city raised folk, they had only a vague notion of where eggs, milk, broccoli, steak and carrots come from.

“Food comes from your farm”, blurted one of the youngest of the city kids, clearly proud to show she knew where food comes from. “Mommy gets food from the store”, her older brother immediately corrected.

After dinner, Farmer Colorado invited his cousins to the Goose Roost to show them the six or seven geese who laid golden eggs. Amazed, the two started to drop hints about how they could benefit from their country cousin’s good fortune. Farmer Colorado politely ignored the hints. Being sophisticated people, the cousins knew that their financial acumen seriously outweighed any ignorance of farm life. Eggs are, after all, simply basic commodities.

When they got back to Denver, the two city cousins were excited. They had spied a pool of riches beyond their immediate imaginations and needed their piece of the action. Heaven knows, they had shares of the farm and had dutifully paid their share of the land taxes.

“We have to get to the source”, said one of the cousins. “I know how women work, and that goose is certainly not a gander. Women are born with all their eggs already developed. Ergo, those geese are full of golden eggs!”

“If we get all of them now, we can invest a huge sum and make tidy profits from now until forever”, said the second. “We can set up a fund for our farmer cousin and he won’t have to work as hard.”

The first cousin agreed. “We have to get our hands on those eggs”, he replied. “We’ll go out there on Friday night and, when everyone is asleep, we’ll gut the geese and take the eggs”.

The two cousins could barely contain themselves as the week wore on. Each talked over the other as they discussed their brilliant plan. Getting the golden eggs became, in their minds, the smartest thing they possibly could ever do.

When Friday night fell, the cousins packed themselves into their SUVs and drove separately to the farm. They parked on the road, around the corner from Farmer Colorado’s driveway. Quietly closing their car doors, the two gathered the tools they’d need to get the job done. One took a long knife, the other a gunny sack. Their plans were simple, generous, clever, and, like most really good plans, involved the slightest dash of subterfuge. “It’s for the greater good” they whispered in unison as they tip-toed across the lawn on their way to the goose roost.

As they entered, they could see the largest of the geese, the one their farming cousin had first shown them. That one was the first they grabbed. Remembering something he had seen on an episode of CSI, the first cousin snapped the bird’s neck with a series of rapid wrenching motions. As feathers fell to the floor, the second opened the bird’s stomach to get at the store of golden eggs.

“Perhaps this one is tapped out”, he said as his bloody hands traveled as far as the goose’s gullet in search of even a tiny golden nugget.

Dropping the dead bird, the first cousin reached for and twisted the neck of another goose. It too was found to be empty by the second cousin, as was a third, fourth and fifth goose. By the time the sun’s rays were peering over the mesa to the east and all the geese were dead and gutted, neither cousin was an ounce of gold richer.

There’s a moral to this story, one the state legislature in Colorado should read. Colorado is about to pass an Affiliate Marketing Tax, one that might kill one of the strongest golden geese in the state’s economy. The tax has already passed the house and is likely to pass the state senate on Thursday morning.

The affiliate marketing sector has a wonderful and growing community in and around Denver. This community provides direct employment to thousands of Coloradans and hundreds of thousands of affiliates in Colorado and around the world. Chances are, the vast majority of legislators have little to no idea how their decision will alter one of the brightest points of light in America’s small business universe.

If you live in Colorado, especially in or around Denver, it’s still not too late to make that call, write that email or personally visit your state senator.

Privacy Concerns Plague Corporate America

Thousands of personal records were exposed last week after a break in at a Government of Ontario Ministry. Hundreds of thousands of personal records dating back to the Clinton years went missing after the loss of three hard drives two years ago by the White House IT staff. An unknown amount of data was illegally accessed in December when a number of US corporations and defense contractors, including Google, were hacked by a group believed to be based in China.

Each week, it seems a new story emerges about data loss and personal privacy. As more and more of our personal information and critical business data is stored online or on accessible servers, protection of that information becomes more and more important.

I am sitting in a two day conference in Toronto addressing Health Information Privacy, Safety and Security. Aside from myself, the three dozen attendees are either lawyers or public health administrators. Many of the major health care centers and hospitals in the city are represented and each has an enormous responsibility over an enormous amount of extremely sensitive information.

From a technicians’ perspective these folks have their work cut out for them. The need to communicate between health care providers is obvious. Specialists need to know what a person’s general physician knows. Similarly, general practitioners need to know if various specialists have prescribed medicines or other forms of care. At the same time, the need to take extraordinary safeguards to guarantee that patient information is secure is obvious.

There are no easy answers. For every system, there’s a malicious person who thinks it should be broken. For every malicious person who thinks a system should be broken, there are two or three who think the information found within is there to be exploited. Speakers have addressed types of attempted attacks they have faced, the most successful having been ones resembling uber-hacker Kevin Melnick’s social engineering exploits.

So what is a beleaguered network administrator to do? According to many of the speakers who’ve addressed the conference, there’s not a lot an admin can do with the exception of pushing for proactive processes designed to protect sensitive data.

One large Canadian government ministry, for instance, has a 28 page list of rules regarding how workers behave and how data is stored. No outside data storage devices, computers that time-out after being left alone for over five minutes, stringent sign-in and sign-out procedures when logging onto a server. Another large organization present at the conference assigns unique IDs to each piece of information and to each employee.

It comes down to discipline on the part of the company, organization and workers. Protecting sensitive information isn’t just good business, in most jurisdictions, it is the law. From what I’m hearing at this conference, data security is one of the most pressing problems in both the public and private sectors. It’s 11 o’click…. Do you know where your data is? More on privacy tomorrow.

Affiliate Convention Denver 2010 Agenda Posted

Earlier today we posted the preliminary agenda for Affiliate Convention Denver 2010, June 21 and 22 at the Colorado Convention Center.

Building on the success of last year’s Affiliate Conventions in Denver and Los Angeles, we are expecting a larger, more dynamic summer show. We’re trying out new approaches with several of the sessions. The goal is to create a more direct and actionable experience for attendees, vendors, sponsors and presenters.

Though we expect increased attendance, we want to allow for more interaction between speakers and audience during sessions. We also want to create a more clearly defined set of session tracks each of which include basic to advanced level sessions.

Affiliate Convention Denver 2010 will be organized in three unique tracks, Marketing, Technology and Business, with eight topics addressed by each track. More basic sessions are featured at the start of the agenda with advanced sessions towards the end. Most of the sessions will be delivered by moderated panels but many are designed to be more interactive.

Some sessions, like the One on One Site and Campaign Clinics and the How To FAQ will be held in breakout group format in which we place an expert at one of four round tables in a room. Session attendees can then choose which expert’s table they’ll sit at for a direct review and discussion of their marketing efforts or technical issues.

Others, such as the Affiliate Ethics Roundtable and the Final Debate Panel will be organized as town-hall style debates with audience participation welcome through out. The Final Debate Panel that closes all Affiliate Conventions will again be fueled by two days of high level information and networking and two or three container trucks of free beer.

Affiliate Convention is a series of welcoming, community events for everyone from grassroots affiliates to network CEOs. From top level education and skill sharing sessions to premier networking opportunities, Affiliate Convention is geared to give you the greatest convention experience and an extraordinary value.

Registration is now open. Working affiliates always attend Affiliate Convention events for free. For non-affiliates, the earlier you register, the better the discount you can receive.

Join us at Affiliate Convention Denver 2010, June 21 and 22 at the Colorado Convention Center.

Greg Niland and Frank Watson Search for Solutions on WebmasterRadio.FM

Two more of the long-term legends of search engine marketing are coming to WebmasterRadio.FM starting next week.

Greg Niland (GoodROI.com) and Frank Watson (Smart-Keywords.com), are teaming up to present Search for Solutions debuting Monday February 1 at 7pm ET/4pm PT.

Greg Niland (aka GoodROI) was the original host of Good Karma which aired on WebmasterRadio.FM from December 2005 until December 2007. An active member of the Internet Marketers of New York and avid organizer of IMNY charity events, Greg is one of the swiftest search marketers in the world.

Frank Watson (aka AussieWebmaster), is well known in the SEO, PPC and affiliate marketing communities. He is also a staple speaker on the web marketing conference tour making frequent appearances at Search Engine Strategies and Affiliate Convention events. He is a writer, educator, lecturer and one hell of a fine web marketer. His columns can be read regularly at Search Engine Watch.

Greg and Frank will have a free wheeling sort of show where they will take and pose difficult questions on search marketing and the business of being a working webmaster. With nearly three decades of experience between them, Greg and Frank are enormous additions to the WebmasterRadio.FM family of show hosts.

Tune into Search for Solutions, weekly on WebmasterRadio.FM starting Monday February 1, 2010 at 7pm ET, 4pm PT or download podcasts from the WebmasterRadio.FM archives, from iTunes, or from other fine podcast distribution outlets.

Having Tablets on the Brain

Do our habits directly affect our evolution as homo sapiens? Is there any truth to the modern myth that the dominant digit for the millennial generation is the thumb rather than the forefinger? Are our grandchildren going to become so light sensitive that they’ll not worry about UV radiation from the Sun as much as they worry about the blindness inducing brightness of a clear and sunny day?

These questions were tumbling through my mind as I rode the subway into Toronto’s financial district very early this morning. On the seat in front of me, an office worker was reading a Tom Clancy novel on a Kindle reader. To my right, another was messing around with his Blackberry, likely scheduling appointments and figuring out how his week would work out. Vaguely pretending to read a dead-tree newspaper, I spied on my neighbors as the train sped between stations.

Toronto’s underground transit system is over sixty years old. While the trains are updated and upgraded every decade or so, the tunnels and rail bed were built in the 1950s. Sometimes, as the train moves through a tunnel, the lights go on and off leaving only the tunnel lighting to provide a shadowy glimmer within the train. Everyone reading print on paper immediately looks upwards towards the overhead lights in the vain hope their glares will magically illuminate them. Nobody reading an electronic device noticed or cared, at least, that’s what their blue tinged faces appeared to suggest.

The Blackberry dude was able to amuse himself for several stations as he typed, rolled and tabbed himself towards a Zen like state of electronic organization. The man with the Kindle was focused on whatever dangers Clancy was putting his protagonist through. An older fellow with a laptop and sweater vest seemed a bit smug for a second but given he was wearing a sweater vest in the first place, that might just be his normal appearance.

Aside from the man with the Kindle, everyone with an electronic device on my train looked as if they were working. They had the set faces of people determined to make something of their days, even though their in-office work days had not actually begun. My assumption is they probably do this everyday. The lights flashed back on and I continued to read my newspaper.

So what does it mean to be constantly connected to an increasingly smaller segment of society? While the Internet allows us far broader cultural and social interaction, our use of it tends towards making immediate and often mundane work easier and faster, thus insuring we receive a greater number of immediate and often mundane tasks to perform for work every day. Could this be a reason why I find most people increasingly impatient and even more mundane than before?

I am bettering myself as I read my dead tree newspaper. I am actively informing myself with the goal of being the best participant in my peaceable little democracy as I possibly can be. That’s what I was telling myself as I was sort of jealous that the guy in front of me had a Kindle and I don’t. (I don’t feel the least bit jealous of the Blackberry dude, though as I recall, he did have nice shoes.)

I realize I am thinking this way because I am reading an article about the hype surrounding the expected unveiling of the Apple Tablet computing device later this week. I have to admit, I’m excited about what everyone seems to think is going to be launched. I do dig change, even if it makes me and those around me uncomfortable and even when it comes at the great expense of thousands of dollars. As soon as an Apple Tablet hits the store shelves near me, I’m almost certainly going to dive on the bandwagon, buy me one of those things, and racially change the way I relate to the depths of information around me.

In other words, I wasn’t really thinking about society as much as I was thinking about myself. Typical… Along those lines goes a famous self-attributed quote, “I am truly interested in change. Ask any of my ex-girlfriends.”

Like dating a new person, where change takes us as individuals is virtually anyone’s guess. My best bet says we’ll do a lot of what we do today but in a different and likely faster way. That doesn’t mean we’ll be more efficient, smarter or better able to practically use information, it just means we’ll have a neater tool with which to make, monitor and manipulate that information.

Subway rides, on which one can have some of their most interesting meditations, will become an exercise in personal efficiency. The moment menus at fine restaurants are displayed on portable devices rather than printed in a leather-bound booklet is the moment fine dining conversation is socially displaced by yet another YouTube video. There will be good and bad but the most obvious things that will come from Wednesday’s Apple announcement will spell more changes in the way we work, read, recreate and entertain ourselves.

Less obvious changes happen over time. We’ll see how tablet computing will affect us as individuals and as a society. There is only one thought I had on the train ride I know to be absolutely true.

“I don’t care if he’s an early adopter, or if I’m almost of a certain age,” I thought to myself, “there’s no way I’m ever wearing a sweater vest.”

Twitter Hole Open for Hackers

Twitter has a hole in its coding which potentially exposes millions of accounts to malicious hackers. A security expert based in Florida says he has found a security flaw in Adobe Flash which could allow hackers to see the passwords of Twitter users.

Senior security analyst Mike Bailey of Foreground Security in Orlando says he found a problem in the way Twitter’s website is coded which could allow hackers to exploit a well known vulnerability in Flash.

Adobe has known about the exploit since it was originally found in 2006 and has taken steps to inform programmers on how to handle it. Adobe has also posted warnings for webmasters who use Flash however many do not know about them.

According to Bailey, it shouldn’t take Twitter too long to fix the problem by slightly altering the way its website is coded. Twitter might by now have already fixed the problem. Bailey claims to have informed the company and plans to discuss his findings at the Black Hat DC Security Research Conference in early February.

Ominously, he says that the microblogging service might have been vulnerable for over a year.

If a computer security analyst in Orlando Florida could find an issue at Twitter, it’s a safe bet that malicious hackers could as well. If they have chances are, you wouldn’t know about it, even if you yourself got hacked.

This type of exploit allows a hacker to access your password. Once the hacker has your password, they have your Twitter history and all the information contained within. If that information includes direct messages containing sensitive information, the hacker might have scored something. With the ability to spider freshly scraped databases of direct messages between users, sensitive information could easily be discovered. Fortunately, most hackers are keyboard warriors, not hardened criminals. They’re not going to use your information against you. Unfortunately, some hackers know hardened criminals well enough to do a lot of business with them.

There’s not a lot of safety for hackers in ripping people off. Hackers compile information which they tend to sell to others or trade within their communities rather than use that information themselves. Hackers might steal the information but it tends to be their commercial accomplices, the criminals who actually go to the bother of using it to rip you off.

In this case, a more likely scenario has the hacker pretending to be you. With your password, the hacker also has access to your account and can start Tweeting as you. By posing as a particular user, the hacker can prompt friends of that person to click on malicious links. Imagine the swiftness with which one posing as a popular person could create a rapidly growing bot-net using Twitter. Hackers might not perceive themselves as criminals but they do seem to enjoy making bot-nets. Bot-nets are also commercially traded between hackers and criminals.

Given the publicity this story has generated in the past twelve hours, it is very likely the folks at Twitter have taken steps to fix the problem. At this time, we have not received replies from tweets to @twitter and to @biz requesting comment.