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An interesting tidbit has emerged from America Online’s lawsuit against Advertise.com over the latter’s alleged trademark infringement and unfair competition with regards to AOL-owned Advertising.com.  (One is Advertise.com, the other is Advertising.com.  Yeah, I was confused too).

Well, a preliminary ruling came out last week when the U.S. District Court for the Eastern District of Virginia granted the startup’s motion to transfer the case over to California, where Advertise.com is headquartered and where AOL boasts multiple offices.

We got our hands on the court documents (embedded below), which conveniently reveal some previously undisclosed numbers about Advertise.com’s current and projected revenues.

The transcripts of both motion hearings are interesting, because part of them reveal how much money Advertise.com – which is what ABCSearch rebranded itself to back in April 2009 – is making with its digital marketing platform / online ad network.

At one point during the first hearing on September 18, the transcript shows the court asked Advertise.com’s counsel about the size of his client’s business:

The Court: I don’t know much about your client. How big is your client?

MR. SELESNICK: Your Honor, they’re expected to — this year I think their projected revenue is about $25 million.

THE COURT: Well, compared to AOL then, I mean, it’s a little bit of a David and Goliath, although again, it’s not a mom-and-pop shop, either.

MR. SELESNICK: Correct.

During the other motion hearing on October 9, it was also revealed that Advertise.com made a grand total of $44,000 from its activities in the Commonwealth of Virginia during 19 months of operations.

This may look like a minor victory for Advertise.com from the outside, but when you consider the few resources the startup has compared to AOL, they must have been pleased not to have to litigate on the other side of the country if just for the extra travel costs and other inconveniences. The reason America Online wanted to have the lawsuit in the state of Virginia in the first place was because it’s a so-called rocket docket, a district that has an accelerated timetable and that strictly adheres to deadlines, resulting in speedier disposition of cases than most other districts.

We should note that when we contacted Advertise.com to double-check the $25 million projected revenue figure, its outside PR representative Ann Shannon of Pan Communications asserted “that figure is inaccurate,” but wouldn’t comment any further.  So either Advertise.com’s lawyer didn’t know what he was talking about and misled the court in a material fact which resulted in the lawsuit being moved to a more favorable venue, or Advertise.com’s PR person doesn’t know what she is talking about.  We’re going with the lawyer.

DOCSEN-_185807-v1-Transcript_of_9_18_Motion_to_Enjoin_hearing –

2009-10-09 Transcript re Defendant’s Motion to Dismiss or Transfer Venue –

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Offerpal Media, an advertising platform concentrated on helping developers monetize social networks by offering virtual currency in exchange for participating in ‘offers’ like online surveys, has filed suit against Kickflip, the company behind the Gambit payment engine.

As first reported in GigaOm, the suit alleges that Kickflip temporarily used Offerpal’s services for the purpose of stealing knowledge of how the service worked, which it then used to start a competitor. From the suit:

[Kickflip] misrepresented its intentions in forming a relationship with Offerpal, and then used the information and trade secrets learned in the course of the relationship to develop and improve Defendant’s own competing service.

Kickflip responds that the suit has “absolutely no merit”. The company originally started off as a game developer in 2007 (you can see a list of their old games here). The company says that during that time it has tried to use OfferPal and SuperRewards (an OfferPal competitor) to monetize their games but that both were unable to meet their needs, so they built their own service. The company’s ‘about’ page offers a similar background:

In 2007, we formed kickflip inc. to build online games, eventually reaching over 7 million users. We had the same problem you have…making money. So we built all the tools we needed to help users pay for our games. Our users loved it. We loved it. So we thought we’d allow a few friends to use it. Surprisingly, the developers and their users liked it too. Since then we’ve been focused on providing the easiest payment solution for online games and communities.

Kickflip has issued the following statement regarding the suit:

We were game makers long before we built Gambit. As game makers, we used the services of both OfferPal and SuperRewards. We noticed these services couldn’t keep up with our needs, so we decided to build our own, which turned into Gambit. Since then we have been building partnerships with game developers. We have a lot of respect for the business OfferPal has developed, and it is unfortunate that they feel it necessary to sue a former customer and game developer. We are confident that this lawsuit has absolutely no merit, and we plan to fully defend ourselves. If you have further questions, feel free to contact our lawyer:

Eric Benisek
Vasquez, Benisek & Lindgren LLP
925-627-4250

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