This is a very interesting story from Shawn, the owner of Digital Point. He is facing FBI charges and can get up to 20 years of jail time. Quoting from his blog entry at DP:

I haven’t said much about it to date about the dealings between myself and eBay, because well… I didn’t see a point. But now with people’s imaginations running wild about what did (and didn’t) happen, I suppose I’ll talk about it. The story itself is far more interesting than you would think possible within an affiliate program.

The Beginning
I started doing things with the eBay affiliate program in the fall of 2004. On October 20, 2004, I decided I would see if I could rank well for one of the “holy grail” SEO keywords… “eBay”. On November 9, 2004, I was in the top 10 in Google for “ebay”… specifically I was #9 (at the time, the top 50 results were just the various official eBay sites for various countries). On December 10, 2004, I held the #4 *and* #5 position in Google for the keyword “eBay” and this was a position I held in Google until April, 2006 (when Google updated their algorithm, and I no longer cared about the ranking). I also held the #1 spot for other things like, “eBay Registration” (even higher than ebay.com’s registration page). The rankings were partially done with the Co-op Ad Network. People saw me outranking eBay’s own domain for the keyword “eBay” and in December of 2004 the Ad Network exploded in popularity. All of a sudden we had hundreds of millions of pages on the Internet serving billions of Ad Network ads every day.

I got the attention of eBay because my affiliate income was going crazy and they assigned someone to be my “go to” person for anything I needed within the eBay program. This person was assigned to me in early 2005.

Personally I was more than happy with the income I was getting as an eBay affiliate, but eBay was not and helped me come up with new/innovative ideas for driving more traffic to eBay.

Spring 2005
Due to the overwhelming popularity and reach of the Ad Network, eBay came up with the idea in the spring of 2005 that we should use our ad network for more than just helping people rank well in search engines. The logic was that we are serving billions of ads every day, so why not use it as a traditional advertising delivery system? It made sense, so we tried it out by using a small percentage of the Ad Network ad space to serve up tens of millions of eBay ads every day that ultimately were affiliate links. Affiliate income jumped another 300% around that time (as expected).

The Promise Made
At this time, the eBay contact that was assigned to me was constantly complaining about how they need to get a new car because their car was crappy. I finally got tired of continuously hearing about their crappy car and promised that I would buy them a new car if I ever made over $1M/month, but they could never talk about their car again starting now. I honestly never thought I would make anywhere remotely close to $1M/month at this point, so it was an easy way just to get them to shut up about their car.

Summer 2005
eBay was pleased… they were getting massive amounts of traffic and it sure made their affiliate program look good. In the summer of 2005, eBay decided it needed more traffic from me. I told eBay I couldn’t drive any more traffic. They responded that I should “experiment” with what they deemed “grey area” things (this is what eBay called anything that violated their terms of service).

At this point, things started to seem strange to me. eBay was paying affiliates millions per month, when they had no competition… for the most part it was traffic they would receive anyway. And why was eBay *happy* (and they were) that I was outranking them for their own company name and paying me for it? Someone searched Google for “eBay”, came to my site and I would send them to ebay.com to get affiliate revenue. Finally I confronted eBay about it all. I told them numerous times that I didn’t understand even why they HAD an affiliate program, and that I would gladly do what I do for them for 1% of what they were paying me. The response I was met with with ultimately was (and I quote), “Well don’t tell anyone that. Why do you not like ‘Free money’?”
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