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February 24 2012

Top stories: February 20-24, 2012

Here's a look at the top stories published across O'Reilly sites this week.

Data for the public good
The explosion of big data, open data and social data offers new opportunities to address humanity's biggest challenges. The open question is no longer if data can be used for the public good, but how.

Building the health information infrastructure for the modern epatient
The National Coordinator for Health IT, Dr. Farzad Mostashari, discusses patient empowerment, data access and ownership, and other important trends in healthcare.

Big data in the cloud
Big data and cloud technology go hand-in-hand, but it's comparatively early days. Strata conference chair Edd Dumbill explains the cloud landscape and compares the offerings of Amazon, Google and Microsoft.

Everyone has a big data problem
MetaLayer's Jonathan Gosier talks about the need to democratize data tools because everyone has a big data problem.

Three reasons why direct billing is ready for its close-up
David Sims looks at the state of direct billing and explains why it's poised to catch on beyond online games and media.


Strata 2012, Feb. 28-March 1 in Santa Clara, Calif., will offer three full days of hands-on data training and information-rich sessions. Strata brings together the people, tools, and technologies you need to make data work. Save 20% on Strata registration with the code RADAR20.

Cloud photo: Big cloud by jojo nicdao, on Flickr

February 23 2012

Commerce Weekly: The mobile payment system that's ready now

Here are a few stories that caught my eye this week.

Three reasons why direct billing is ready for its close-up

In a sign that direct billing is gaining credibility beyond the realm of online games and media, WorldPay, a payment network for sellers, said it would add Boku as a method of payment to its system. Direct billing companies like Boku, BilltoMobile, and Bango let people buy things by entering a mobile number online and replying to a confirmation SMS text; the charges show up on their cell phone bills. Execs with these firms often describe them as "banking for the unbanked," but the reality has been that in practice, many of the "unbanked" are online game players who are too young to have bank accounts.

But that seems bound to change. Direct billing has at least three things going for it that make it an attractive option right now for mobile payments.

Boku graphic

The first is the potential user base. The graphic above, from Boku's site, shows the numbers that these services pin their ambitions on. There are two billion credit card accounts in the world, but more than five billion mobile phone accounts. Each of those mobile numbers is a unique identifier that the carrier can identify anytime, anyplace in the world. Compare that to the experience many of us have had where your credit card issuer puts a hold on your account because it is suspicious that you paid for a taxi in Chicago on Tuesday but are now buying lunch in Puerto Rico on Thursday.

Second, PayPal is about to train its millions of mobile customers to pay for things by keying in a mobile number. Its real-world retail pilot at 51 Bay Area Home Depot stores allows users to do just that (or use a PayPal card) to pay for hardware and other real-world goods. PayPal bought Zong, a direct-billing leader, for $240 million in July 2011. It has woven that technology into its suite of customer payment methods, though the process now taps your PayPal account rather than showing up on your mobile phone bill. And that's probably a good thing: One of the things that has held direct-billing back has been the reticence of mobile carriers to go along with a scheme that threatens to anger their subscribers when they open their monthly bills to see totals that are hundreds of dollars more than they spent on telecom services. The direct-billing companies have helped the carriers get over their hesitation by offering them a cut of the charge, much higher than the few percentage points that credit card companies charge for transactions.

The third great thing that direct billing has going for it is that it could allow people to pay for real-world goods now, no matter what kind of mobile phone they have. We've written a lot about NFC wireless as a tap-and-pay solution coming "soon." But so far in the U.S., only a handful of Nexus G users on the Sprint network are able to pay for goods using NFC and Google Wallet. Verizon's decision last December to lock Google Wallet out of its rollout of Samsung's Galaxy Nexus due to "security concerns" made the advent of universal NFC a little less certain. Direct billing, however, works on any mobile phone that supports text messaging. As Boky co-founder Ron Hirson pointed out in a column on Venture Beat last year, the more advanced benefits of a mobile wallet accompany direct billing, and no NFC is required. As Hirson wrote, the real advantage to mobile payments isn't the supposed convenience of tapping your phone compared to swiping a plastic credit card; it's the integration with other apps on the phone for record-keeping, bargain hunting, rewards tracking, financial planning, and the option to go social.

X.commerce harnesses the technologies of eBay, PayPal and Magento to create the first end-to-end multi-channel commerce technology platform. Our vision is to enable merchants of every size, service providers and developers to thrive in a marketplace where in-store, online, mobile and social selling are all mission critical to business success. Learn more at x.com.

Is social commerce not commercial enough?

A Bloomberg story published late last week said Gamestop plans to shutter its Facebook store after disappointing results. The article also noted that over the past year, three prominent retailers — Gap, JCPenney, and Nordstrom — have all opened and closed stores on Facebook, too. The report quoted Forrester Research analyst Sucharita Mulpuru explaining the disconnect that's leading to disappointment:

"There was a lot of anticipation that Facebook would turn into a new destination, a store, a place where people would shop. But it was like trying to sell stuff to people while they're hanging out with their friends at the bar."

The report was noticed, and widely reposted and linked to. A counter-point published by Forbes on the same day appeared to get less attention. In that piece, Wade Gerten, CEO of 8th Bridge, which makes social shopping software, suggested these companies failed because they didn't understand what social commerce (or Facebook commerce) really is. Gerten wrote that it's not about setting up your Facebook page as a checkout stand; that's what your website does. It's more about tapping Facebook's best qualities — sharing, bragging, and asking — to help people discover what you're offering. He cites Ticketmaster and Delta Airlines as two successful practitioners of the art. Neither company attempted to replicate its website's transactional activity within Facebook's walled garden, but each organization used that channel to promote their offerings. So maybe it's not exactly F-commerce but F-marketing?

Meanwhile, with Facebook's ability to push merchandise now slightly tarnished, we look for a new champion. Pinterest is barely on the radar screen, but Forbes' Jeff Bercovici writes that it's already a better place for social commerce. "Pinterest isn't a bar," Bercovici writes, referencing Mulpuru's quote in Bloomberg's story. "It's more like a craft fair where people go to exhibit their wares, check out other vendors' offerings, or do a bit of both."

How to dial a telephone (again)

Our smartphones are so capable, and we're so adept at using them to manage our lives, that it's funny to look back and see that people once needed instruction in the most basic of phone operations: how to dial a number and place a call. But an ancient 10-minute black and white film on AT&T's Tech Channel (embedded below) shows the lengths that "the Bell network" went to in preparing their customers for the switch from operator-assisted calls to dialing systems. Rows of nerdy guys in white shirts and pocket protectors line up to yank out the fuses at the stroke of 12, while other white-shirted guys in another room at the same moment yank out strings that activate the new systems. A model who might have been Lucy's Connecticut neighbor explains some of the basics, like what a dial-tone and busy signal sound like, how to look up a number in the directory, and even how to dial a rotary phone.

Actually, the instructions on how to use a rotary dial phone — "making sure your finger firmly touches the finger stop with each pull of the dial" — are as novel now as they were when this film was produced. My young kids found an old one in their grandparents' house (not in service) and had fun marveling at how this heavy, black analog beast was able to make calls.

Got news?

News tips and suggestions are always welcome, so please send them along.


If you're interested in learning more about the commerce space, check out DevZone on x.com, a collaboration between O'Reilly and X.commerce.


Related:

February 10 2012

Commerce Weekly: Facebook finds a mobile commerce partner

Here are a few items that caught my eye this week.

How will Facebook cash in on mobile?

Facebook logoWith Facebook's public filings ahead of its imminent IPO, we know now that advertising accounted for 83% of its revenue of $3.71 billion in 2011. But we also know that almost none of its revenue came from mobile users — which is a bit of a problem since mobile users are an increasingly large part of Facebook's user base. Facebook members have embraced mobile apps on smartphones and tablets, and Facebook has encouraged their use by developing and releasing apps that deliver a UI experience that is, in some ways, superior to the traditional browser-based interface.

Now, Facebook has to figure out how to make mobile pay. A deal signed this week with mobile payments firm Bango aims to help. Bango provides mobile payment services and direct billing to carriers (like Boku and BilltoMobile), so that the cost of buying things on your mobile shows up on your mobile bill. That seems like a convenient way to buy, and such services have sometimes touted themselves for nobly serving "the unbanked" — even if many of those unbanked are largely American teenagers who use the services to buy virtual goods in games. The drawback is that mobile carriers have been lukewarm to the systems because they worry about customers seeing huge mobile phone bills and complaining or switching, even if what they're seeing is made up of virtual poker chips and Smurfberries. Direct billing services have helped the carriers get over these anxiety by giving them a cut of the revenues much greater than most payment providers get, often as high as 33%.

There's no word yet on how Bango and Facebook will manage payment or what percentage of those payments will go to the telecoms. But we can imagine what goods will be sold: Facebook Credits, as Facebook last year began insisting that mobile game providers sell their virtual goods using only Facebook credits. But I would expect Facebook's position on Credits to evolve as mobile commerce grows on the site. It's one thing to force users to buy Credits so they can be dispensed within social games; it seems unnecessary when consumers are buying a wider range of digital (or physical goods) throughout their Facebook experiences, and a restriction that could limit the potential. As long as the mobile carrier is taking a cut, why couldn't Facebook take a cut as well, without having to force Facebook's virtual currency into the equation?

X.commerce harnesses the technologies of eBay, PayPal and Magento to create the first end-to-end multi-channel commerce technology platform. Our vision is to enable merchants of every size, service providers and developers to thrive in a marketplace where in-store, online, mobile and social selling are all mission critical to business success. Learn more at x.com.

Google Wallet's glitches

Google Wallet is stumbling through some embarrassing growing pains as it comes under the scrutiny of white-hat hackers who are finding and publicizing security flaws. Engineers at Zvelo developed a Google Wallet Cracker app that appears to be able to break Google Wallet's encryption in seconds. Google is working to find a solution for the glitch, which exposes users' Google Wallet PIN numbers on rooted Android phones. Kate Knibbs at Mobiledia writes that the breach "validates Verizon's decision to block Google Wallet on the Galaxy Nexus," due in part to its concerns about security on the Android platform.

Meanwhile, over at TheSmartPhoneChamp.com, there's a video that highlights another security flaw in the phone. Since the Google prepaid account option within Wallet is tied to the device, not a separate Google account, someone who finds the device can open the Wallet app, clear the data, and then re-launch the app. Although the "new owner" will need to enter a PIN, the old prepaid Google account is still tied to that smartphone. I'm not certain how big a hole this is because I have no idea how much people store on their prepaid accounts — though I would hazard a guess it's not more than $300. All right, so nobody wants to lose $300, but it's not like being upside down on your mortgage.

Add to these issues the growing awareness that malware and crapware are a problem on the mobile side. To fight the malware problem, Google developed Bouncer, a program that scans for malware and spyware on Android apps. To keep out known troublesome apps, the service performs a malware and spyware scan on all submitted material. It also uses behavioral analysis to determine if a given app is trying to do something suspicious. Google doesn't stop there; it also performs fraud and abuse detection to ban and remove malware writers posing as legitimate developers. Google says it's already deployed the service and has seen a 40% drop in "potentially malicious downloads" thanks to it.

What would you buy with a QR code?

PayPal has launched a pilot with "shopping walls" in subway stations in Singapore, where you can purchase stuff by snapping a pic of the QR code while using a PayPal app on a smartphone (see a shopping wall in action here). It looks like a swell way to get some of your Valentine's Day shopping done while you're waiting for the Circle Line. Another nifty experiment would be ordering dinner from a shopping wall while waiting for your train in one station, so that it would be ready for you when you exit another. Snap the QR codes of the meals you want and checkout with PayPal. The system could even be smart enough to know when you'll pick it up, based on the station you ordered from. And there's no question of the food going to waste: The restaurant has your money and your mobile number.

That's my idea — and I freely admit that it's just because I'm late for dinner. Let me know if you've seen anyone selling meals or other interesting items via QR codes.

Got news?

News tips and suggestions are always welcome, so please send them along.


If you're interested in learning more about the commerce space, check out DevZone on x.com, a collaboration between O'Reilly and X.commerce.


Related:

December 15 2011

Commerce Weekly: Daily Show skewers freemium CEO

Here's what caught my eye in commerce news this week.

Daily Show corners gaming CEO on freemium

Poor Rizwan Virk. The co-founder and CEO of GameView Studios thought he was going to be featured as a new media visionary whose product (social games) contribute to a thriving virtual economy while the real one staggers on through an endless, grinding downturn. Instead, he found himself being skewered by Daily Show correspondent Aasif Mandvi, who accused him of playing off children's emotional immaturity and propagating a business model that looked a lot like drug dealing. Fame, like the Daily Show's producers, plays by its own rules. Here's the segment:

The sneak attack on Virk centered around GameView's popular TapFish, which features a virtual aquarium where players feed virtual food to virtual fish. The game is free, but as with all freemium games, a small percentage of players choose to buy virtual goods (food, fish, accessories) to enhance it. Virk touted the model in the interview as a new approach that allows more people to play the game: "Traditionally, you had to go to a store and buy a $60 cartridge to play. In this new model, you can play games for free."

Mandvi then switched gears and reported on a family in Montpelier, Vermont, (though it's unclear whether this was a real family or actors) where the kids boasted about maxing out the dad's credit card buying virtual fish and fish food on an iTunes account. B-roll showed someone purchasing $99.99 of virtual fish — though Virk says most of the game's actual purchases are for less than $2.

Virk looked equal parts annoyed and confused as Mandvi accused him of pushing a model that lured people into the game and then exploited their addiction. "You provide a product, the first one is free," Mandvi said. "And then as they get accustomed to your product, the price rises. So you're a drug dealer." He then went on to accuse Virk of targeting kids as the dupes, exploiting their "undeveloped frontal cortex" and their desire to keep the fish alive at any cost.

Virk defended himself in a blog post the next day, saying he felt tricked because the Daily Show said it was producing a segment on the virtual goods, and Mandvi's "drug dealer" comments came near the end of four hours of recording. In the post, he pointed out that most purchases are for much less than the one shown during the interview and that all purchases require the buyer to enter their iTunes password. But of course, far fewer people will read his post than see the Daily Show bit.

The report was an unusual attack on the increasingly popular freemium model, which, as Flurry Analytics pointed out last summer, has become the dominant model for popular mobile games. Stories of kids overspending appear rare and anecdotal. I took a small survey on Facebook and Twitter for this post, asking parents how many of them shared their iTunes password with their kids. For the most part, that trust barrier seemed to break down along age lines, with parents of kids younger than about 8 or 9 not sharing the password, while parents of teens were more comfortable with sharing — especially if, as in one case, the child had set it up for them. That may be because at a certain age, kids are old enough to understand they're spending real money and that they're likely to lose the privilege if they abuse it. At least that's what happened to one of the kids in my mini poll: "[I shared the password] until he purchased a bunch of music with inappropriate content!"

X.commerce harnesses the technologies of eBay, PayPal and Magento to create the first end-to-end multi-channel commerce technology platform. Our vision is to enable merchants of every size, service providers and developers to thrive in a marketplace where in-store, online, mobile and social selling are all mission critical to business success. Learn more at x.com.

Isis taps NFC partner

ISISIsis, the mobile payment platform funded by Verizon, AT&T, and T-Mobile, said it has contracted with Dutch digital security company Gemalto to run the NFC platform on Isis-enabled phones. This means that Gemalto will manage the access to the secure NFC chip on Isis-enabled phones, saying in effect who can access the system for payment or other services.

The move is another step toward Isis' eventual rollout, which will be preceded by two tests planned for the first half of 2012 in Austin, Texas, and Salt Lake City, Utah. Isis is emerging as a major competitor to Google Wallet, particularly in light of Verizon's recent decision not to allow Google Wallet to function on the Android-powered Samsung Galaxy Nexus on Verizon's network. Verizon and Google say they're in discussions, but skeptics wondered if this might be the first of many blocks to come by the three carriers who support Isis.

Meanwhile, Bank Technology News (BTN) reported that Google Wallet may be planning to roll out a larger demo in London in the first months of 2012, ahead of the Summer Olympics. BTN said that Visa, the payments sponsor of the Olympics, is likely to be part of that trial. Thus far, Google Wallet has been limited only to Nexus owners on the Sprint network who have a MasterCard through Citibank. The London trial is likely to be widespread, reaching more handset owners and, presumably, far more merchants.

Consumers: Make it easier for us to spend

Survey results released this week offer the counter-intuitive finding that consumers might be more comfortable with mobile payments than they are with credit cards. Javelin Strategy & Research conducted the survey that found that (not surprisingly) consumers don't like having to key in 16-digit credit card numbers to buy stuff online. They would be more comfortable with direct carrier-billed mobile payment, which requires only a mobile number and a pin. Those charges then show up on a mobile carrier bill. The survey was commissioned by Payment One — a direct carrier-billed mobile payment provider.

More than half of the 2,000 consumers who took the survey said they've abandoned shopping carts before checking out because of security concerns, and four out of five said they would spend more money online if it were easier and more secure. In the report, Javelin said this could all add up to an additional $110 billion in new revenue for merchants in the U.S. each year. Payment One is just one of several vendors willing to step in to help merchants reach that number, recognizing that 14 numbers is a lot easier to key in than 16, particularly when 10 of those digits are your mobile phone number.

Got news?

News tips and suggestions are always welcome, so please send them along.


If you're interested in learning more about the commerce space, check out DevZone on x.com, a collaboration between O'Reilly and X.commerce.


Related:

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