Amazon has already emailed its termination of its affiliate advertising program with 25,000 websites. The letter says, in part:As for those businesses themselves:
(The bill) specifically imposes the collection of taxes from consumers on sales by online retailers - including but not limited to those referred by California-based marketing affiliates like you - even if those retailers have no physical presence in the state.
We oppose this bill because it is unconstitutional and counterproductive. It is supported by big-box retailers, most of which are based outside California, that seek to harm the affiliate advertising programs of their competitors. Similar legislation in other states has led to job and income losses, and little, if any, new tax revenue. We deeply regret that we must take this action.
The new law won't affect customers, Amazon said, but added that the immediate termination of the affiliate program also applies to endless.com, myhabit.com and smallparts.com.
Amazon affiliate Keith Posehn, owner of zorz.com in San Diego, said he had affiliate advertising agreements with more than 70 companies and these programs were 35% of his company revenue before the California legislature passed a similar bill last year. Then-Governor Schwarzenegger vetoed that bill.Of course, anyone who knows anything about business could have said, "I told you so." Unfortunately, that doesn't include California's esteemed political leadership.
"We got 70 termination letters in one night before he vetoed it," Posehn said. After that, he started changing his business away from affiliate advertising and has started a new mobile application company.
"I have pitched investors and several question the wisdom of staying in California," Posehn said. "Some venture capitalists are very keen on placing startups outside California because start-up costs are less."