VentureBeat's Matt Marshall looks into the controversial post transaction marketing techniques of two Seattle area companies --WhitePages and Intelius -- and concludes that "Intelius is certainly no worse than WhitePages." The analysis follows Seattle Weekly's scathing profile of Intelius, which noted hundreds of consumer complaints and pointed to some of founder Naveen Jain's past legal troubles.

Both companies provide online directory services so that consumers can look up phone numbers and find additional information about people. And both offer advertising and special offers after a purchase is made of the electronic records, with WhitePages providing that through a partner site called US Search.

I recently looked at the tactics of both companies as well, and what Marshall reports is accurate.  WhitePages' post transaction marketing offers provided through US Search just keep coming and coming, making it nearly impossible to get to those record requests. I was left wondering why anyone would use the US Search product. (Editor's note: The post has been clarified to reflect that the marketing offers in question come through the WhitePages' partner and advertiser US Search, not directly from WhitePages.)  

WhitePages' John Lusk tells VentureBeat that the messaging around US Search is not very clear. And he said the company is planning to change that  as part of a larger rebranding effort that's coming in June, though he acknowledges that the company will continue to use US Search. (Editor's note: In a follow up email, WhitePages said that the offers in question do not come from them.)

Marshall writes:

"And WhitePages is stuck: The company is sort of addicted to the money it gets from US Search for directing it the traffic. It gets paid for every click through to the US Search page, and that income is much more lucrative than the advertising WhitePages gets to its own services."

(Editor's note: WhitePages says this statement is not true and that ad revenue through US Search is a minority of the company's overall revenue.) An interesting read, which also points out that Microsoft is using the WhitePages' service for its people search on MSN.

In an interview today with TechFlash, Jain said he wonders why Microsoft would engage in business with a company that is involved in deceptive marketing practices. He also said he stands behind the practices of Intelius.

"We believe that Intelius is useful and that the advertising is transparent because all of the advertising on Intelius is looked at by a privacy and consumer protection committee," he said.

I have an email into WhitePages founder Alex Algard to get his reaction to the story.

UPDATE: Here's Algard's statement on the report.

"WhitePages does not do post-transaction marketing. Some companies do, but we have chosen to not engage in that practice. End of story on that. Furthermore, I do not think it is fair to blame WhitePages for what might potentially happen on third-party websites, when we make it clear to users that they are clicking on sponsored ads.

We are highly protective of the trust that we have built with our users, and it is unfair to compare us to with other companies with lower standards."