Sometimes business practices go bad. A good example of this is a survey of restaurant reservation systems by the Marketing4Restaurants website.
A striking allegation in the survey is how some of these services advertise on Google against their own clients, called ‘adwords arbitrage’ by one competitor to the established booking services.
One of the failed promises of the internet was the removal of the middlemen. Many of us thought the web would enable businesses and individuals to communicate directly to the public without the need for intermediaries.
We were wrong, rather than eliminating middleman the internet gave birth to a new breed of bigger global breed with the rise of Google, Facebook and Amazon being the most prominent.
The success of the ticket clipping culture has seen thousands of platform services and online exchanges that do little more than try to lock small businesses and contractors into into their systems for little if any benefit.
However advertising against your own customers as Open Table and Dimmi are alleged to do is another level of bastardry and, at least in Australia, quite possibly illegal.
Even if this behaviour does turn out to be within the letter of the law, a business competing against its own customers is being run by ethically challenged people and is almost certainly doomed in the medium term – what client is going to pay to subsidise its competitors?
As internet startups struggle to justify huge investor valuations we can expect more behaviour like this. Hopefully though most of those businesses, and the investors who fund them, are doomed.