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Online payment giant, Paypal is expecting over $3.5 billion in transactions from mobile devices by the end of 2011. It also expects a significant jump in mobile payments during the upcoming holiday shopping season. Earlier in the year, Paypal which is owned by eBay had predicted that it would see around $2 billion in mobile payments but a few months ago it revised its predictions to $3 billion. However, as recently as two weeks ago, eBay CEO John Donahoe upped the number again during a discussion on stage at the Web 2.0 Summit, saying he expects the total to now reach $3.5 billion by the end of the year. Paypal’s parent company — eBay’s own mobile initiatives generated close to $2 billion in sales last year, nearly triple the $600 million eBay reported in 2009. “Mobile is exploding. We are seeing a massive growth in mobile payment volume. We think the numbers for mobile payments are going to be huge for this holiday season” said Anuj Nayar director of communications for Paypal. In fact, Paypal has embraced mobile shopping aggressively and plans to make transactions more seamless from start to end of the consumer shopping experience. In fact, by 2013, Paypal is expecting its mobile payments volume to reach $7.5 billion. According to Scott Thompson, president of Paypal, “Paypal is re-imagining money and making it work better for merchants and consumers – whatever device you’re on, wherever you are in the world, and however you prefer to pay – whether that’s cash, credit, or installments. We’re rolling out a one-stop shop for merchants to engage their customers directly during every part of the shopping lifecycle – generating demand from consumers through location-based offers, making payments accessible from any device (not just from the mobile phone), and offering more flexibility to customers even after they’ve checked out,” he said. Juniper Research has determined that the total value of mobile payments for digital and physical goods, money transfers and NFC transactions will reach US$670 billion by 2015 and some 20 countries are expected to launch NFC services in the next 18 months, resulting in transactions approaching US$50 billion worldwide by 2014. With the amazing numbers being reported and the positive outlook towards the mobile industry as a whole, it comes as no surprise that companies will be jumping on the bandwagon to get into the near-field communications (NFC) space. Google, Samsung, Visa, Apple and a host of other brands all have NFC capabilities in the works. Image courtesy of techfreakz
The Twitter hack count keeps rising as the accounts of prominent news sources, celebrities and political figures keeps getting hacked. Recently, a group calling itself The Script Kiddies hacked into USA Today’s Twitter account and used it to solicit requests for future targets as well as to promote its own Facebook account. Days before the 9/11 anniversary of ground zero, NBC News’ Twitter account was hacked by The Script Kiddies who posted bogus messages claiming that Flight 4782 has been hijacked and another plane crashed into the site where the Twin Towers collapsed ten years ago. The message read “This is not a joke, Ground Zero has just been attacked. We’re attempting to get reporters on the scene. #groundzeroattacked.” – The FBI has since gotten involved with monitoring The Script Kiddie’s activities. In 2009 CNN anchor, Rick Sanchez’s Twitter account was hacked with the message below:
The Script Kiddies were also responsible for hacking into @FoxNewsPolitics and posted a series of messages declaring that President Obama had been assassinated in Iowa by an unknown shooter on the eve of the Fourth of July this year. In relation to the Fox News hack, a member of The Script Kiddies said, “We are looking to find information about corporations to assist with antisec. Fox News was selected because we figured their security would be just as much of a joke as their reporting.” The group is believed to be an offshoot of the hacker group Anonymous. By hiding behind the veil of a computer screen and anonymity, the group shows a callous disregard to human tragedy and is arrogant in their campaign of misinformation through messages on hacked accounts.
Last year, a French man known as “Hacker Croll” as his online pseudonym, hacked into President Obama’s Twitter account by guessing the password. French authorities reportedly worked with the U.S. Federal Bureau of Investigation to monitor Hacker Croll’s online activities and whereabouts, and to eventually bring him to justice. A couple of weeks ago, the Prime Minister of Thailand, Yingluck Shinawatra’s Twitter account was hacked and a series of mocking messages followed which included “This country is a business. We work for our allies, not for the Thai people. We work for those who support us, not those who differ with us,” said one tweet. Social media is one of the most effective ways to spread news, interact and even to topple oppressive governments like we have seen in the middle east. However, when placed in the wrong hands of hackers, social media becomes a more sinister medium.
Chinese social newtwork giant Renren has agreed to purchase 56.com a video sharing site (similar to YouTube). Renren, China’s version of Facebook (Facebook is blocked in China) has around 100 million registered users. “Video is increasingly becoming an important part of” usage, said James Liu, the company’s chief operating officer, in an interview with The Wall Street Journal, adding that Renren has been watching this area “for a long time.” Renren recently went public on the NYSE in May this year and posted $800,000 in net income in Q2, up from a $25.5 million net loss a year earlier. With this acquisition, Renren which has only showed marginal profits since its listing will have the added financial pressure as bandwith costs in China are high. Huihuang, Renren’s Chief Financial Officer said that ”the entire online video-sharing sector is not profitable at this moment” and “compared to other major players,” 56.com’s losses are much smaller. ”As a company, we want to focus on things that benefit us in the long term instead of the short term,” she said. “the entire online video-sharing sector is not profitable at this moment” and “compared to other major players,” 56.com’s losses are much smaller.
“As a company, we want to focus on things that benefit us in the long term instead of the short term,” she sai”the entire online video-sharing sector is not profitable at this moment” and “compared to other major players,” 56.com’s losses are much smaller.
Renren’s CEO Joe Chen said that 56.com will continue to be operated as a separate website but that user accounts and other functions between the video site and Renren will be linked. Renren plans to differentiate itself from China’s top online video companies, Youku.com Inc. and Tudou Holdings Ltd., by focusing on short video clips uploaded by its users rather than licensing content such as television shows and movies.” This move shows perhaps a new wave of technology-based acquisitions in China — one similar to Silicon Valley where companies buy out smaller ones in order to scale or acquire its user base.
From gaming to browsing to shopping, to paying for your coffee and gaming, the future is indeed in the palm of your hand — in mobile devices. The complications of flash updates and its unavailability on the iPad is only going to spur further development of HTML5 and browser-based interactions. When you look at the innovation and business development activities of the big players in the market, it’s not hard to see the direction of the industry as a whole. 1) Google Wallet & Trusted Stores – The recent development of these two massive projects is an indication that Google is planning to dominate the payment space and encourage more shopping through its eCommerce trust mark initiative. 2) Amazon’s Redesign & Tablet – Last month, Amazon confirmed its website redesign targeted at optimizing the browsing experience for the tablet. It also launched the Kindle Fire tablet late in September for a steal at $199. 3) eBay – In April this year, eBay acquired hyper-local ad network WHERE. The strategy is to integrate its PayPal virtual payment service into the WHERE mobile app to boost local deal discovery. eBay’s mobile initiatives generated close to $2 billion in sales last year, nearly triple the $600 million eBay reported in 2009. 4) Gaming Industry – According to MaximumPC and Appmobi, Flash single-handedly set UI design back 5 years. Gaming consoles that ruled the market as recently as 3 years ago are seeing a staggering drop off in sales, as are dedicated console games themselves. These activities is proof that the big boys and the gaming industry (a $44 billion industry) are betting on mobile — in a big way! What should your business focus on:
Though complete mobile usage in payment may well be in the near future, the affordability of handsets and tablets will be the drivers of the mobile industry as a whole — so start creating your mobile presence now.
Google is now benchmarking the customer experience with its release of Google Trusted Stores. How It Works: – Merchants get to display a Trusted Store logo on their site but they will need to share information like shipping, customer service and complaints. According to Google, ”When a shopper makes a purchase at a Google Trusted Store, they have the option to select free purchase protection from Google. Then, if a problem arises with their purchase, they can request Google’s help, and Google will work with the merchant and customer to address the issue. As part of this, Google offers up to $1,000 lifetime purchase protection for eligible purchases.” What will this mean to your business:
While this new product release probably raises more questions than definitive answers at this point, focusing on the customer experience of your business is never going to hurt in any way. One thing is for sure, Google is now getting into the “feel good” and emotional area of business — and its algorithms will probably decide which merchants will get rewarded. – I’ll be betting on the fact that businesses who focus and pride themselves with an overall great customer experience will be the organic search result winners. Below is a video by Google giving an overview of the Trusted Store program.
Finally — after many months of speculation, Amazon announced the release of four Kindles on Septmeber 28th — three eReaders and one 7 inch tablet known as the Kindle Fire. The Kindle Touch 3G and non-3G ($99 & $149) and Kindle Fire ($199) are only available on pre-order right now, scheduled to be released on November 15 and November 21 respectively. Prior to its release, we wrote a blog post guessing that the Amazon Tablet will cost around $250 — but at whatever the price point, it will be the first serious contender to Apple’s iPad. Amazon is expected to sell at least 3 million units of the Kindle Fire. However, is this pre-order strategy that’s slated for release just before Thanksgiving and Black Friday shopping a way for Amazon to gauge just how many pre-orders it can chalk up to in order to gauge the demand? According to cult of android it managed to secure an internal inventory management lookup report of the Kindle Fire pre-order and reported that: “ These leaked shoots show that orders for Amazon’s Android-based tablet are racking up at an average rate of over 2,000 units per hour, or over 50,000 per day. In the five days since Amazon put the Kindle Fire up on their official site, over 250,000 tablets have been pre-ordered. If this level of consumer demand for the Kindle Fire continues, Amazon will have 2.5 million preorders for the device before it officially goes on sale on November 15th.” Those numbers make the Kindle Fire’s launch likely to be the biggest tablet launch in history, beating both the iPad and iPad 2 in first month sales — we will just have to wait and see. Click on image to enlarge
With the exception of a camera, Amazon has managed to create a tablet that rivals most other tablets in the market in terms of functionality — at a fraction of the cost. The only current cheaper tablet in the market is HP’s TouchPad at $99 which has been liquidated and is unclear if HP will be manufacturing more since its abandonment of the WebOS business. While Amazon has presented itself as a serious contender to Apple with the unveiling of its product, pricing and content ecosystem — Amazon Kindles and Amazon.com is still very much a U.S. focused product and service. In contrast, Apple iPads are available in 64 countries. According to Forrester, it is estimated that by the end of 2011, 50% of iPad sales will come from outside of the U.S. Here is a quick comparison on the tablet prices in the U.S market currently for 16GB models:
It is estimated that it costs a total of $209.63 to produce each Kindle Fire. For each unit sold, Amazon loses $10.63. Even though the Kindle Fire may be a loss leader, the content ecosystem, value chain and seamless product buying experience will more than make up for the loss. Whatever the case, Amazon has clearly set the Android-based tablet pricing standard from this point forward. Image courtesy of cultofandroid.
Netflix has changed its mind once again — Qwikster will be no longer and Netflix goes back to being well, er.. Netflix again. That brings the average of one paradigm shifting change a month from Netflix since July — when it announced its price change, then splitting up its business in September and now back to being just plain old Netflix again for October. Here is a screenshot of CEO Reed Hasting’s blog post today:
Looks like as a previous customer of both streaming and DVDs, I will still have to pay for both services as separate services. Honestly, I am confused at this point and cancelled my subscription last month to only just the streaming part of Neflix’s services — currently known as the ex-Qwikster. Consumer and Brand Perception: The quickfire changes has caused nothing but brand confusion and distrust amongst its current subscribers based on its questionable moves. The more than 1 million unsubscribes and plunging stock prices since its announcement in July is the primary reason Netflix reversed the splitting of the two businesses. The good news is, they listened. Nevertheless, the damage is done. What Reed Hastings took 10 years or so to build up was ruined in a matter of months. Marketing Takeaway: Provide value — Changes are good but changes can be excellent when it provides more for less or truly offers value to your customers. Here is a good example:
Perhaps it’s time for someone else to take the helm of Netflix. What Reed Hastings has done to his brand is what one would call a small business owner that can’t seem to get out of his own way — except in this case, his company is publicly traded has millions of customers. Here is a quick snapshot of Netflix’s stock prices in the last couple of months.
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