Sean Kleefeld noted on his blog yesterday that things don’t seem to be going to well at Wowio—one of their creators still hasn’t been paid for content that ran in the second quarter of last year (before Platinum acquired the site), and their staff is making minimum wage. Then he takes a look at the Alexa numbers, which suggest traffic to the site is way, way down.

Click on the comments to get to the good stuff, though. That’s where Brian Altounian, president and COO of Wowio’s parent company, Platinum, posts a spirited response to Sean’s comments. He starts by pointing out that the entire economy is down, and therefore no one should be surprised that the numbers are down at Wowio as well. And then he reveals something interesting: You remember the big bucks that folks were making on Wowio? Altounian says that money came from investors, not revenues:

Who do you think was paying publisher royalties during the two years prior to Platinum’s purchase? Advertisers? Sponsors? NO! They came from Wowio founders and initial investors who, after two years, decided they didn’t want to shell out royalties without an income stream… Our change in the business model has been to pay the publishers when a book is paid for, either by a reader or a corporate sponsor.

Then there’s some back and forth, as Kleefeld and Altounian discuss the wisdom of investing in a company with significant debt, and it all ends more nicely than it started.

All this made me curious to see what was going on at Wowio, so I clicked over and took a look. What I found was an easy-to-use e-book interface, although the site design is a bit too charcoal-gray for my tastes. Most of the comics and books I looked at offered the option to read for free online or pay to download a PDF. Not being a chump, I stuck to the free online version. I might pay 99 cents for something, if I were willing to go to the trouble of registering, but the chances of me paying $14.99 for an e-book or $3.99 for a comic? Pretty much zero. Especially when I can read it for free online.

I think Dwight MacPherson gets it right when he says Wowio is a good way to increase your readership, but not to look to it for money. The days of taking in tens of thousands of dollars from Wowio are over, at least in the forseeable future, but as he says, you could use it like a more user-friendly version of MySpace Comics to offer a free preview of the first issue of a series. Be aware, though, that you could be draining off revenue from your own site. Todd Allan has a good dissection of the Wowio business model in this post from October.

That said, I managed to waste half an hour on Wowio without too much trouble. Their featured book was Spidery-Mon: Maximum Carcass 1A, a Jamaican-themed Spider-Man parody that reminded me of the old SuperDuperman comics that used to run in Mad Magazine. (I’m not that old—I read them in reprints!) I also glanced at a comic bio of Houdini, one of those Saddleback books that critics hate but my 9-year-old nephew loves, but when I went to House of the Muses: The Last Days of Sappho of Lesbos, I was blocked and told to register because the comic had mature content. While that’s a minor annoyance, I can see why it makes sense from Wowio’s perspective; they can carry mature content without being accused of corrupting minors, and getting readers to register brings them one step closer to becoming paying customers. Also, they do that if-you-like-this-then-you-might-like-that thing, which hooked me into reading a few new comics.

I’m just judging the interface here. I know there is a lot of distaste out there for Platinum, some of it quite well founded, and anyone doing business with them should think through the risks and benefits beforehand. But as a reader, I think it works pretty well, and I’ll probably check back from time to time to see what else is new.