DatabaseLLC, a provider of sales leads and email marketing services to sales people and small businesses, sued Infogroup, an Omaha based list company. The Company filed its countersuit in a lawsuit started by Infogroup two months ago. DatabaseLLC does business as Database101, infofree and AtoZ Databases.
“Luckily, because of our superior cloud technology, we were able to withstand that attack on our website”
Database’s Counterclaim charges that Infogroup has interfered with Database operations and competed unlawfully. The Countersuit alleges that:
1. Infogroup urged its employees to sabotage the Database101 website with thousands of orchestrated hits. This was done to disrupt Database operations. The attackers also hit Database’s AtoZ website and its infofree website over 8,000 times. “Luckily, because of our superior cloud technology, we were able to withstand that attack on our website”, said Database founder, Vinod Gupta.
2. Infogroup resorted to “tortious interference” with Database101’s relationship with its customers and prospective customers to cover up its own shortcomings. Infogroup has lost half its employees and declined in sales and profits since its current owners bought the company in 2010. Database founder Vinod Gupta was the largest Infogroup shareholder. Gupta voted for the sale of all his Infogroup shares and resigned from its Board in 2010.
3. Infogroup lured away the top software engineer from Database101 even though he had a confidentiality agreement with the company.
4. Infogroup used “orchestrated email” sent by its sales people to Database101 customers and prospects making disparaging statements about products and services. “They are starting and promoting false rumors about Database101, AtoZ Databases and infofree,” Gupta said.
Infogroup’s original lawsuit accuses Database of unfair competition. Gupta’s new company’s counterclaim strikes back. The papers filed in court state, “Database101 has no desire to mimic or repeat Infogroup’s costly methodologies, because Infogroup’s business plan is obsolete and it is not competitive in the marketplace.”
Database101 contends it uses state of the art “cloud technology” and the concept of “software as a service” to provide the most productive sales leads and growth services to millions of people and small businesses at very low prices. Gupta explained, “In this slow economy, sales people and small businesses are hurting. They need to build sales, not just cut costs. Database101 proprietary technology and analytics have filled this need with low cost, high quality service and lists. Old methods no longer work.”
Database101 likens its business to a wholesale distributor who takes databases from multiple sources, uses its proprietary methods to allow sales people and business owners to find just the right sales leads at a low price. It asserts Infogroup has an outdated business model that compiles mailing lists of little value because information is ubiquitous and dirt cheap.
The Counterclaim notes Infogroup reduced its Omaha based employment from 1,800 employees by an estimated 1,000 jobs in Omaha, and suffered declining revenues since its new owners bought the company in July 2010.
Database’s court filing also observes that the information business is crowded with companies. “Database101 is not the only Infogroup competitor borne of its former employees. Several such companies that compete with Infogroup have been formed by former employees.”
Speaking for Database101, founder Vinod Gupta said, “We realize that compiling lists of names is an outdated business model in this digital age dominated by Google, YAHOO, Linkedin, Jigsaw, salesforce.com and hundreds of other players. Information about businesses or people is ubiquitous and inexpensive.”
Instead, value is created with proprietary analytics and computer models applied to make information useful to the customer. “It’s like corn is a commodity, but the value is created by food companies by making corn bread, corn flakes, corn syrup and other corn products.” Now Gupta charges, “Since Infogroup can’t compete in the marketplace, they have decided to use lawsuits, false rumors and dirty tricks to demolish competition and sabotage their operations. Of course, we will fight this vigorously in the courts. We will protect the livelihoods of our 50 new employees and the potential we see for hundreds of new jobs we plan to create next year.
Similar Posts: