December 8, 2019

Webdenda: Accounts and People of Note in the Advertising Industry

Bottlerocket Marketing Group, New York and Foxborough, Mass., was acquired by Brand Connections, New York. Financial terms were not disclosed. The acquisition is the second in a month for Brand Connections, coming after a deal to acquire Pie Advertising, New York.

The Center for Tobacco Products at the Food and Drug Administration selected three agencies to work on public health education campaigns to help discourage youths ages 12 to 15 from using tobacco. The initial budget for the assignments during the next two years is $188.6 million. The Rescue Social Change Group, San Diego, will handle assignments aimed at four demographic groups: African-Americans, Asian-Americans, Hispanics and youth who identify as lesbian, gay, bisexual or transgender. Sensis, Los Angeles, will handle assignments aimed at youth who live in rural communities. Better World Advertising, San Francisco, will handle assignments that are to be determined.

Jennifer Cohan joined Edelman, New York, part of Daniel J. Edelman Inc., as chairwoman of the global consumer practice. She succeeds Christina Smedley, who left to join PayPal, a unit of eBay, as vice president for global communications. Ms. Cohan had been a managing director at the New York office of GolinHarris, part of the Interpublic Group of Companies.

Tom Cotney joined mBlox, Sunnvale, Calif., as chief executive. He succeeds Andrew Dark, who is now nonexecutive chairman at Miura Systems. Mr. Cotney had most recently been a board adviser to Catavolt and before that held posts that included chief executive at Air2Web.

Craft Worldwide was formed by the McCann Worldgroup, New York, part of the Interpublic Group of Companies, to unite all its production operations at a single business unit. Craft has more than 570 employees in almost two dozen cities that include London, Melbourne, Mumbai, New York, Paris, Shanghai, Singapore, Tokyo and Toronto. Among the clients for which Craft is working are Aldi, Coca-Cola, General Mills, L’Oréal and Microsoft (Xbox).

Michael Di Girolamo, partner and executive producer at Station Film, was named the 2013 chairman of the AICP Show, sponsored by the Association of Independent Commercial Producers, New York. The date for the 22nd annual show, which will also include the presentation of the Next Awards, is to be announced early in the new year; the show is usually held in June at the Museum of Modern Art.

Kevin Dillon joined Ratio Interactive, Seattle, in a new post, president. He had most recently been director for engagement strategy at Ascentium, Seattle, now known as Smith.

Erin Dorr and Layla Revis joined the New York office of We Are Social. Ms. Dorr becomes an account director; she had managed social media and advocacy programs at the Dachis Group. Ms. Revis becomes senior director; she had been vice president for digital strategy at Ogilvy Mather Worldwide, part of WPP.

Emcee Design was opened by MeringCarson, Sacramento, Calif., to serve current and new clients. The design unit has seven employees and is being led by Michael Leonardini, design director at MeringCarson, and Mina Robertson, senior account manager at MeringCarson.

Samantha Fennell joined GTM, New York, in a new post, strategic adviser for branded entertainment. She had most recently been executive director at Time Inc. Branded Solutions, part of the Time Inc. unit of Time Warner.

Suzanne Grimes joined Clear Channel Outdoor Americas, New York, part of Clear Channel Outdoor Holdings, in a new post created after a reorganization, president and chief operating officer. She had most recently been a consultant and before that held executive posts at magazines owned by companies like Condé Nast Publications, News Corporation and the Reader’s Digest Association.

David Kurtz joined AdColony, Los Angeles, in a new post, chief product officer. He had most recently been vice president for the publisher network at ATT Interactive.

Duke Marr joined R/GA, New York, part of the Interpublic Group of Companies, in a new post, managing director for commerce. He had been vice president for e-commerce product management at 1-800-Flowers. Also, R/GA opened an office in Austin, Tex., which it said in July it was planning to open later this year.

Mary Warren McCarthy, senior vice president and group director/strategy at Blitz Media, Boston, was promoted to a new post, chief media officer.

Norman M. Miller joined Niche Media, New York, in a new post, executive director for luxury brands. He had been integrated sales director at Martha Stewart Living Omnimedia, New York.

Article source: http://www.nytimes.com/2012/12/10/business/media/accounts-and-people-of-note-in-the-advertising-industry.html?partner=rss&emc=rss

Scott Thompson, PayPal Executive, to Become Chief of Yahoo

After a few months’ search, the struggling Internet media company announced on Wednesday that its new chief executive would be Scott Thompson, the president of PayPal, the online payment service owned by eBay.

The 54-year-old Mr. Thompson, analysts say, has a background mainly in technology rather than digital media or corporate turnarounds. While PayPal is a consumer service, analysts said that was very different from a media company.

Mr. Thompson joins a company that is losing momentum against the ascendant powers in the consumer Internet business — Google and Facebook. Its woes persist even though it has 700 million online visitors a month, one of the largest audiences on the Web; is a leader in online news, sports and finance; and will report net profit of more than $1 billion in 2011 on revenue of nearly $4.44 billion, estimates Jordan Rohan, an analyst at Stifel Nicolaus.

Still, Facebook surged past Yahoo last year in online display advertising in the United States for the first time, according to eMarketer, a research firm. Yahoo has farmed out its search advertising to Microsoft, in a cash payment and revenue-sharing deal.

The overall online ad market increased more than 20 percent to $31.3 billion last year, while Yahoo’s share of that thriving market slipped to 11 percent from 13.3 percent in 2010, eMarketer estimates.

Yahoo’s slippage prompted the ouster last September of Carol Bartz, a respected technology executive recruited to be Yahoo’s chief executive in 2009. But Ms. Bartz proved unable to rejuvenate the company.

Now it is Mr. Thompson’s turn.

“Yahoo seems like the ideal fixer-upper from afar,” Mr. Rohan said. “But Internet assets are hard to fix.”

In a conference call on Wednesday morning, Roy J. Bostock, the chairman of Yahoo’s board, said Mr. Thompson had proved at PayPal that he could take a company with solid assets and build a business. That is the central challenge at Yahoo, Mr. Bostock said, noting its collection of online media offerings and large audience. The problem, he said, was that Yahoo had been floundering — “treading water,” as he put it. “You can call it a turnaround, if you want to,” Mr. Bostock said.

Analysts say Mr. Thompson must first decide how to focus Yahoo’s strategy.

In recent years, the company has spread itself too thin by making sizable investments in technology and also in creating original media content, said Shar VanBoskirk, an analyst at Forrester Research. That, she noted, is in contrast to Google, which aggregates content from around the Web and concentrates its investment in technology, but does not spend money to create media content itself.

Mr. Thompson, analysts say, will probably push to harvest more advertising dollars from all the consumer data it collects from people using its popular e-mail service and visiting its sites, which cover a range of topics including finance, sports and gossip.

“It’s not about putting up pretty content, but about maximizing the value of the eyeballs in front of that content,” said Charlene Li, founder of the Altimeter Group, a technology research firm. “There’s a real opportunity for him at Yahoo, if they can take all this data and use it for advertisers.”

At PayPal, Mr. Thompson demonstrated an ability to take an existing business, redefine it and achieve strong growth. Since he took over PayPal in 2008, and before that when he was chief technology officer, Mr. Thompson helped guide the company’s transition from being a payment method for eBay shoppers alone to an online payment system for all kinds of transactions. Under Mr. Thompson, PayPal expanded its number of users to more than 104 million, from 50 million, and increased its revenue to more than $4 billion, from $1.8 billion.

“That, to me, is a track record of building,” Mr. Bostock said.

In the conference call and an interview later, Mr. Thompson said that it was too soon to discuss any strategic shifts he might make. But he said Yahoo had to innovate and improve its offerings for both consumers and advertisers. “That balancing is what we need at Yahoo,” Mr. Thompson said. “That is how big businesses with network effects are built on the Internet.”

Yet when a company’s momentum wanes, the same snowballing effect can make recovery unusually difficult. Mr. Thompson acknowledged that challenge, but said the trend was reversible at Yahoo, without describing the path to recovery.

“The core business assets are stronger than people believe at this point,” he said. “We can turn the network effects in our favor as opposed to against us.”

Mr. Thompson began meeting with Yahoo board members in November, he said. And the more he looked at the company, whose Silicon Valley offices in Sunnyvale, Calif., are a few miles from PayPal, based in San Jose, Mr. Thompson said, the more he became convinced that Yahoo’s problems were fixable and that he could do it, despite his lack of experience with online media and advertising.

“There is really a lot here, a lot of upside,” he said. “And it’s clear what I need to learn at an accelerated pace.”

The appointment of a new chief executive, Mr. Bostock said, will not slow down Yahoo’s current negotiations to sell off most of its stakes in China’s Alibaba Group and Yahoo Japan to its Asian partners. If a deal is reached, it would involve a complicated asset swap and cash payments from Alibaba and Softbank — and bring Yahoo as much as $10 billion in cash to invest to reinvigorate its main business in the United States, people briefed on the talks said.

But a new chief executive, analysts say, does make it less likely that Yahoo will be sold to private equity investors. When asked during the conference call about that, Mr. Bostock said, “I do not envision us not being a public company going forward.”

Since Ms. Bartz left, Yahoo has been run by Tim Morse. He will now return to his former post as chief financial officer.

Yahoo shares on Wednesday fell 3 percent, to close at $15.78.

Michael J. de la Merced contributed reporting.

Article source: http://feeds.nytimes.com/click.phdo?i=f5b22b1f4f441147d7e185a9f5170e0c

PayPal Executive Named Chief of Yahoo

Mr. Thompson, analysts say, has a background mainly as a technologist instead of being an expert in digital media or corporate turnarounds. While PayPal, a division of eBay, is a consumer service, analysts said that is very different from a media company.

But in a conference call on Wednesday morning, Roy J. Bostock, the chairman of Yahoo’s board, said that at PayPal Mr. Thompson had proved he could take a company with solid assets and build the business. That is the central challenge at Yahoo, Mr. Bostock said, noting that the company has a wealth of strong media and advertising assets, and an online audience of more than 700 million visitors a month.

The problem, he said, was that Yahoo had been floundering — “treading water,” as he put it. “You can call it a turnaround, if you want to,” Mr. Bostock said.

Under Mr. Thompson, PayPal expanded its number of users to more than 104 million, from 50 million, and increased its revenue to more than $4 billion, from $1.8 billion. “That, to me, is a track record of building,” Mr. Bostock said.

Mr. Thompson said it was too soon to discuss any strategic shifts he might make. But he said Yahoo has to innovate and improve its offering for both consumers and advertisers. “That balancing is what we need at Yahoo,” Mr. Thompson said. “That is how big businesses with network effects are built on the Internet.”

The chief executive job at Yahoo, Mr. Thompson said, represents a daunting challenge, but also a major opportunity. “The core business assets are stronger than people believe at this point,” he said.

Mr. Thompson replaces Carol Bartz, who was dismissed in September. The company has been run by Tim Morse since Ms. Bartz left. He will now return to his former post as chief financial officer.

Yahoo shares were down 2.1 percent in early trading Wednesday.

Article source: http://feeds.nytimes.com/click.phdo?i=f5b22b1f4f441147d7e185a9f5170e0c

British Police Make Arrest in Net Attacks

The British police announced the arrest on Wednesday of a 19-year-old man who they said was the spokesman of the online vigilante group Lulz Security, which has claimed responsibility for a string of attacks on the Web sites of government agencies and private corporations.

In a statement, the police said the man used the online alias Topiary and had been picked up during a raid on a residence in the Shetland Islands, the rugged archipelago off the northeastern coast of Scotland. The police said they were also questioning a 17-year-old but had not arrested him.

On Twitter, Topiary described himself as a “simple prankster turned swank garden hedge.” His missives were often facetious, suggesting the handiwork of someone who relished playful language.

Lulz Security, the offshoot of a larger and more amorphous hacker group called Anonymous, has said it was responsible for attacks on the sites of PBS, the Senate, the Arizona Department of Public Safety and a company associated with the F.B.I.

The most recent post on Topiary’s Twitter feed is dated July 21, two days after law enforcement authorities announced the arrests of more than a dozen people in the United States, Britain and the Netherlands, who were accused of participating in online attacks at the instigation of Anonymous. “You cannot arrest an idea,” Topiary wrote.

In the United States, 14 men and women, mostly in their 20s, were charged in connection with an online attack last December against PayPal, after the online payment company stopped taking donations for WikiLeaks.

On Wednesday, in response to those arrests, Anonymous called on supporters to cancel their PayPal accounts. Shares in PayPal’s parent company, eBay, dropped 3 percent, in line with declines in other tech stocks.

A PayPal spokesman, Anuj Nayar, denied that any significant number of PayPal users had canceled their accounts in response to the call for a boycott. “We haven’t seen any changes to our normal operations, including account opening and closing,” Mr. Nayar said.

The attack on PayPal’s site last December slowed down the company’s system, but to such a small extent that it would have been imperceptible to customers, he said. At no point, Mr. Nayar said, was the Web site shut down.

Article source: http://feeds.nytimes.com/click.phdo?i=c9dd203835eb3bc85f5f385b65cb0bd3

16 Arrested as F.B.I. Hits the Hacking Group Anonymous

In an indictment unsealed Tuesday afternoon in United States District Court in San Jose, Calif., 14 people were charged in connection with an attack on the Web site of the payment service PayPal last December, after the company suspended accounts set up for donating funds to WikiLeaks. The suspects, in 10 separate states, are accused of conspiring to “intentionally damage protected computers.”

Anonymous had publicly called on its supporters to attack the sites of companies it said were turning against WikiLeaks, using tools that bombard sites with traffic and knock them offline.

A Florida man was also arrested and accused of breaching the Web site of Tampa InfraGard, an organization affiliated with the F.B.I., and then boasting of his actions on Twitter. And in New Jersey, a former contractor with ATT was arrested on charges that he lifted files from that company’s computer systems; the information was later distributed by LulzSec, a hacker collective that stemmed from Anonymous.

The PayPal attack came in response to the release by WikiLeaks last November of thousands of classified State Department cables. Members of Anonymous, a clique of worldwide hackers with a vague and ever-changing menu of grievances, have claimed responsibility for a number of attacks on government and corporate Web sites over the last eight months.

In recent weeks, police in Britain and the Netherlands have arrested several people suspected of having participated in those attacks. Justice Department officials said British and Dutch police also made related arrests on Tuesday. FoxNews.com reported Tuesday that the police in London had arrested a 16-year-old boy who they believed was a core member of LulzSec and used the alias Tflow.

The arrests of suspected Anonymous supporters in the United States were among the first known in this country.

Ross W. Nadel, a former federal prosecutor who founded the computer hacking and intellectual property unit at the Federal District Court in San Jose, said the arrests could be “a highly visible form of deterrence.”

The prosecution is expected to face at least two major challenges, said Jennifer Granick, a San Francisco-based lawyer who specializes in computer crimes and has defended hackers in the past. Because hackers often use aliases and other people’s computers when they carry out attacks, prosecutors will have to prove that those arrested “were the ones with their fingers on the keyboard,” she said.

Second, the conspiracy charge could be especially difficult to prove, given that Anonymous boasts of being leaderless and free-floating. “When you have a decentralized group,” Ms. Granick said, “the question is, Are there big fish, and are any of these people big fish?”

The charge of “intentional damage to a protected computer” is punishable by a maximum of 10 years in prison and a $250,000 fine, while conspiracy carries a maximum penalty of five years in prison and a $250,000 fine.

Cyberattacks are made possible by a combination of two features of the Internet economy. Poor security at many companies and agencies makes sensitive government and private data vulnerable to breaches. And mounting an attack is inexpensive and, with the right skills, relatively simple.

In the San Jose case, all 14 suspects are accused of using a free program called Low Orbit Ion Cannon to hurl large packets of data at PayPal’s site with the intention of overwhelming it.

With the exception of one suspect, whose name was redacted by the court for reasons that federal officials did not explain, those arrested were identified by their real names and nicknames, ranging from Anthrophobic to Toxic to MMMM. Most were in their 20s, and just three were above the age of 30. It is unclear if any of them knew one another.

Article source: http://feeds.nytimes.com/click.phdo?i=ef7a8d709849ca4067ec978652db46e1

Link by Link: Speed Bumps on the Road to Virtual Cash

MONEY is accumulated, traded and transferred online every day, but can there be a form of currency that exists only online and yet has real-world value?

That is the premise of Bitcoin, an open-source virtual currency system that since 2009 has grown to a market worth more than $100 million.

But the past few weeks have shown that a virtual currency can be just as vulnerable as the paper kind. Bitcoin accounts have been subject to hacking and theft; the currency itself experienced a bubble and a crash. And at least one group that was collecting donations in Bitcoins has decided against using them because of possible legal entanglements.

Gavin Andresen, who is the lead developer of the open-source software that operates the currency, said in an interview from his home in Amherst, Mass.: “I expected it to have lots of speed bumps along the way — but I didn’t expect there to be so many speed bumps in a row.”

There are several appeals to the idea of an online currency. The standard way to ensure the validity of online transactions, according to Jerry Brito, a technology expert at George Mason University, is “to have an intermediary to keep the ledger,” that is, a service like PayPal or a credit card company that takes a percentage of the transaction.

A virtual currency would not need an intermediary. It would also make it harder for authorities to track transactions (particularly appealing for gambling sites or other quasi-legal activities).

Bitcoin began as a kind of thought experiment. In 2009, an anonymous programmer published a paper proposing a virtual currency that would elegantly solve many of the problems surrounding currency that exists only on the Internet, including the main one, that the money would simply be copied like, say, music files, and plummet in value.

Another part of the challenge was to create a currency without having to resort to a central bank to issue the currency and track the transactions. In other words, the transactions would be genuinely “peer-to-peer” rather than pass though a virtual bank.

The solution of the Bitcoin programmer, who wrote under the name Satoshi Nakamoto, was to ensure that each “coin” was its own certificate of authenticity — that the coin, in essence, would be nothing more than that certificate.

In the Bitcoin system, a new coin is produced whenever a computer can calculate an answer to a difficult problem, and then attaches that answer to a digital record of every transaction of every Bitcoin ever traded — a breathtakingly large amount of information to carry around in order to buy a pack of gum, but in a time when information can zip around the Internet, not too much to ask. Anyone would be free to create a new coin, within proscribed supply limits, by having a computer do the work needed to prove that it was in fact a valid Bitcoin.

“The incentives are right, they are a check that everyone is following the rules,” said Mr. Andresen. “Early adopters want it to succeed, because they already own the currency. And if you generate Bitcoins no one thinks is valid, you have wasted a lot of computer time.”

In fact, Bitcoin is a rarity for a currency in that it is neither a so-called fiat currency — one like dollars, which are valuable because the government says they are — nor is it a specie currency, one that gets its value because it can be converted into a precious metal like silver or gold.

But why would a Bitcoin have value if it is only a stream of numbers, unsupported by government fiat or by some underlying asset?

“Why does any tool have value?” Mr. Andresen asked. “It is valuable because it is useful.”

Starting almost as soon as the coins were introduced, they have been traded for dollars at online exchanges, serving as a crude measure of the currency’s popularity and health (and also giving a market where owners can trade in Bitcoins for real dollars).

After two years, there are seven million of these “coins” in circulation and the rate of increase — currently 50 coins are added every 10 minutes — will slow each year until the number tops out at 21 million coins around 2025. The coins, which trade for about $17 each at online exchanges, have a cumulative value of about $100 million. “I do think of it as the market cap of Bitcoin,” said Mr. Andresen. Today, a list of businesses that accept Bitcoin currency is a motley collection of companies on the fringe of the computer world, groups that conduct gambling or the like, and, notably, the antisecrecy group WikiLeaks, which accepts contributions in Bitcoins. You certainly can’t stock the pantry or furnish your home with Bitcoins.

Article source: http://feeds.nytimes.com/click.phdo?i=e075e2aea30446d3c392e7072160a2e9

Small Group Rode LinkedIn to Big Payday

With the hours ticking down to his company’s stock market debut, Mr. Hoffman dialed into a conference call from San Francisco’s Ritz-Carlton hotel as his chief executive, Jeff Weiner, and a team of bankers raced up from Silicon Valley in a black S.U.V. to meet with potential investors.

Demand for shares was intense, and they decided to raise the offering price by $10, to around $45.

When trading began on May 19, LinkedIn did not open at $45. Or $55. Or $65. Instead, the first shares were snapped up for $83 each and soon soared past $100, showering a string of players with riches and signaling a gold rush that has not been seen since the giddy days of the tech frenzy a decade ago.

Now there are signs that a new technology bubble is inflating, this time centered on the narrow niche of social networking. Other tech offerings, like that of the Internet radio service Pandora last week, have struggled, and analysts have warned that overly optimistic investors could once again suffer huge losses.

That enthusiasm was on full display in the blockbuster debut of LinkedIn, which provides a window into how a small group — bankers and lawyers, employees who get in on the ground floor, early investors — is taking a hefty cut at each twist in the road from Silicon Valley start-up to Wall Street success story.

“The LinkedIn I.P.O. will be used very powerfully over the next year as these companies go public and bankers deal with Silicon Valley,” said Peter Thiel, the president of Clarium Capital in San Francisco and an early investor in PayPal, LinkedIn and Facebook. “It sets things up for the other big deals.”

The sharp run-up after the initial public offering set off a fierce debate among observers about whether the bankers had mispriced it and left billions on the table for their clients to pocket. But the pent-up demand for what was perceived as a hot technology stock set the stage for easy money to be made almost regardless of the offering price.

Naturally, Wall Street is enjoying a windfall. Technology I.P.O.’s have generated nearly $330 million this year in fees for the biggest banks and brokerages, nearly 10 times the haul for the same period last year, and the most since 2000.

Besides the $28.4 million in fees for LinkedIn’s underwriting team, which was led by Morgan Stanley, Bank of America and JPMorgan Chase, there were also a few slices reserved for specialists like lawyers and accountants. Wilson Sonsini, the most powerful law firm in Silicon Valley, collected $1.5 million, while the accounting firm Deloitte Touche earned $1.35 million.

Mr. Hoffman founded LinkedIn in March 2003 after making a fortune as an executive at PayPal, the online payments service, but even as LinkedIn grew and other employees and private backers got stakes, Mr. Hoffman retained 21.2 percent, giving him more than 19 million shares when it went public. He has kept nearly of all them, so for now his $858 million fortune — it was $667 million before the last-minute price hike — remains mostly on paper.

Mr. Weiner arrived more recently, in late 2008, after working at Yahoo and as an adviser to venture capital firms, but his welcome package included the right to buy 3.5 million shares at just $2.32. And they are not the only big winners who secured shares at levels far below the I.P.O. price.

For example, when LinkedIn raised cash in mid-2008, venture capital firms including Bessemer Venture Partners and Sequoia Capital, scooped up 6.6 million shares at $11.47 each in return for early financing. They have held on to the stock, but Goldman Sachs, which got 871,840 shares at $11.47, sold all of it for a one-day gain of nearly $30 million.

Scores of fortunate individuals also managed to profit.

Stephen Beitzel, a software engineer, worked at LinkedIn from its founding until March 2004, but kept his stock when he left. His shares are now worth $17 million, and he sold $1.3 million worth in the offering.

Article source: http://www.nytimes.com/2011/06/20/business/20bonanza.html?partner=rss&emc=rss

Bucks: Person-to-Person Payments Get Easier at Big Banks

Three of the nation’s biggest banks introduced a service that will enable their customers to move money from their checking accounts using only an e-mail address or a mobile phone number.

Bank of America, JPMorgan Chase and Wells Fargo already introduced the transfer service, called clearXchange, in Arizona, and it will roll out in more markets in coming months. It will be available nationwide within a year.

The new service will improve upon banks’ existing person-to-person payment services, and it will compete directly with PayPal, which has shuttled money between consumers for years.

But the banks claim that their new service will be more convenient because it cuts out the middle man: PayPal isn’t a bank, so you need to fund your account with money from a checking or other account. With the banks’ service, the money will be ferried directly from your checking account to the person you want to pay. And it doesn’t require you to dig around for a routing or other account number, as some services require.

“The key thing here is that you don’t have to set up any additional accounts,” said Mike Kennedy, head of payments strategy at Wells Fargo and chairman of clearXchange. “People have a primary savings and checking account with their institution and that is what they want to transact out of.”

The new service should save consumers time — though paper checks and cash still work just fine. But it’s unclear how much, if anything, it will cost. Pricing is up to each participating bank. If banks do charge for the service, you’ll have to figure out if the convenience factor makes it worthwhile.

So how will it work? Let’s say you want to pay your friend back for dinner. If you both bank at any of the institutions in the network, you can reimburse your friend in a couple of ways. You can do it on the spot with your cellphone by accessing your bank’s mobile application or mobile banking site. Or, you can do it from your bank’s Web site on your computer.

Either way, you would then enter their name, mobile phone number or e-mail address, and the amount you want to transfer. There’s also an optional “memo” field to note what the payment is for.

After you hit send, the recipient will then get an e-mail or text message that alerts them of your payment with instructions on how to make sure it lands in the correct account. The first time they use the service, they will need to register their e-mail or phone number so it’s associated with their account.

That raised several concerns in my mind: What happens if you mistype your buddy’s e-mail address or mobile phone number and the wrong person gets the message – will they be able to retrieve your money instead? Or what if someone hacks into your e-mail account and finds the note that someone wants to send you $200?

In all of those scenarios, bank executives said the potential thief would need to have your online banking user name and password. If someone did manage to break into your online banking account, they could conceivably send your money to their own account. That’s not a new threat though. If a fraud were to occur, the banks said they would refund the person sending the money as soon as possible.

Many banks already offer person-to-person payment services. At ING Direct, for instance, you can send money from your phone or your computer using the person’s name, e-mail address and the last four digits of their bank account number; you can save their information on a drop down menu for future payments. (ING customers with iPhones can also transfer money to one another by entering the amount in the bank’s mobile app and “bumping” their phones).

But the banks that are part of the new exchange argue that their service makes the process even easier, for both senders and recipients. For instance, recipients in many existing services would need to enter their routing number on the bank site of the person sending them money. In the clearXchange system, they can retrieve their money using their own bank.

The exchange hopes to lure more institutions to its service – it’s already discussing those possibilities with other big banks – which would increase the population of people who can transfer money this way. And eventually, the banks said they plan to offer the same service to customers who want to send money outside of the network.

Would you use the new service? And would you pay for it?

Article source: http://feeds.nytimes.com/click.phdo?i=3f6f0c70389033306e4488e63a9b6243

DealBook: EBay to Buy GSI Commerce for $2.4 Billion

DESCRIPTIONJim Wilson/The New York Times EBay’s headquarters in San Jose, Calif.

11:19 a.m. | Updated
In a bid to expand its retail might, online marketplace eBay has agreed to buy GSI Commerce, an Internet marketing services company, for $29.25 a share, or $2.4 billion, eBay announced on Monday.

For eBay, which is best known for its auction site and online payment service PayPal, the addition of GSI will strengthen its position as an online retail powerhouse and make it more competitive with rival Amazon. It is eBay’s biggest acquisition since its $2.6 billion deal for Skype in 2005.

The company is paying a significant premium for GSI, offering its shareholders a 51 percent premium over the closing price on Friday. Shares of GSI surged 51 percent in morning trading, while eBay shares fell 3 percent.

“We intend to lead the next generation of commerce innovation,” eBay’s chief executive, John Donahoe, said in a statement. “With its complementary strengths, GSI will extend the power of our portfolio. With eBay, PayPal, GSI and our global platform capabilities, we are focused on delivering new ways for retailers and brands of all sizes — from sole proprietors to large merchants.”

The deal is expected to close in the third quarter of this year. There is a 40-day “go shop” period during which GSI may consider rival bids.

GSI helps manage the Web sites and online marketing campaigns for several top-tier retail clients, including Toys “R” Us, Aeropostale and Kenneth Cole.

Its suite of services includes payment processing, order management and fulfillment and customer service. Beyond its e-commerce services, the company also owns Retail Convergence, the parent company of Rue La La, which it purchased in October 2009.

With GSI, analysts say, eBay will be able to create a more robust marketplace for its third-party sellers, who have previously relied on competitors, like Amazon, to manage their orders and online marketing efforts.

“EBay can now cross-sell the services that GSI provides to the thousands of power sellers on eBay,” said Jordan Rohan, an analyst with Stifel Nicolaus. “They are paying a reasonable price to be more competitive with Amazon.”

Under the deal, eBay seems less interested in GSI’s Retail Convergence assets, namely Rue La La, a social shopping service that competes with Web sites like Gilt Groupe and HauteLook, which was purchased by Nordstrom in February.

EBay, according to the company’s statement, will divest itself of 70 percent of Rue La La and ShopRunner, both of which, the company says are not “not core to its long-term growth strategy.” The assets will be placed into a new holding company run by GSI founder Michael Rubin. eBay’s decision to shed the majority of Rue La La is an interesting one, considering eBay’s growing interest in the field. The company purchased a German competitor, brands4friends, late last year for about $200 million in cash. eBay will loan the new holding company $467 million.

In Monday’s press release, eBay said the deal was expected to be accretive in 2012 and generate synergies of about $60 million by 2013

Goldman Sachs and Peter J. Solomon Company are advising eBay, while Dewey LeBoeuf is serving as its legal adviser. Morgan Stanley is advising GSI Commerce, while Morgan, Lewis Bockius is acting as its legal adviser. Davis Polk Wardwell is acting as legal adviser to a special committee of GSI’s board.

EBay’s Biggest Deals:

Skype Technologies Sept. 11, 2005 $2.6 billion
GSI Commerce March 28, 2011 $2.4 billion
PayPal July 7, 2002 $1.4 billion
Gmarket April 15, 2009 $1.2 billion
Bill Me Later Oct. 3, 2008 $905 million
Shopping.com June 1, 2005 $668 million

Article source: http://dealbook.nytimes.com/2011/03/28/ebay-to-buy-gsi-commerce-for-2-4-billion-bid/?partner=rss&emc=rss