Buzz Words Going Mainstream: Mobile Money, the Share Economy, and the Second Screen
by Carol Kopp, Minyanville staff writer
Some of the best new ideas in Internet applications languish for years as mere buzz words rather than developing into household habits. That’s why successful investing is all about getting in at the right time, not at the earliest opportunity. Here’s a look at three buzz words that may finally be ready to become habits, and some of the companies behind them.
The Mobile Wallet
You’d think this would be a no-brainer: toss the plastic and pay with a credit or debit account by tapping your mobile phone on an in-store device and entering a password. A little easier, a little more secure.
From the business view, it’s a beautiful prospect: There are the transaction fees, and the advertising revenues from merchants eager to send you related offers that are immediately useful, based on your current location as well as your latest purchase.
The mobile money idea is so attractive that Web companies, the big banks, and small startups have fallen all over each other, creating confusion and tough choices for consumers and merchants large and small.
There’s also a technical hurdle—some of these choices rely on near-field communications, or NFC, technology, which is not installed on some phones, including Apple's (NASDAQ: AAPL) iPhone. And that problem overlaps with a competitive hurdle: None of the players want to accommodate the other players.
So progress has been slow, but there is some:
- Square, a well-funded startup, has scored Starbucks (NASDAQ: SBUX) for a customer as well as an investor. Rite Aid (NYSE: RAD) and Target (NYSE: TGT) also accept it.
- Google (NASDAQ: GOOG) has just released a new version of its Google Wallet, and is making inroads in the real world and online. Macy’s (NYSE: M), Toys "R" Us, and Banana Republic are all in, plus online-only merchants like 1-800-Flowers.com (NASDAQ: FLWS), Blue Nile (NASDAQ: NILE) and Google’s own Android app store.
- Verizon (VZ), AT&T (T) and T-Mobile have launched their own system, called Isis, in Austin and Salt Lake City test markets.
- But the best bet among those hoping to dominate the space looks like eBay's (NASDAQ: EBAY) PayPal. The default payment option for eBay buyers enters the competition with 123 million registered accounts already in the bag. And, it was making inroads as a payment option for other e-commerce sites when it entered the mobile wallet game.
PayPal just this week announced that it has signed an agreement with a company called Gilbarco-Veeder-Root, which has installed payment systems at 30,000 gas stations and convenience stores in the US.
Last month, PayPal signed a similar deal with NCR (NYSE: NCR), which has comparable strength in the hotel and restaurant industries.
That kind of ubiquity, combined with its name recognition, may help PayPal break through the early-adopter wall. According to a recent comScore study, about 72% of US consumers are aware that PayPal offers a “digital wallet,” and 48% say they have used it. No other brand comes close. Google Wallet is second in awareness, at 41%, and only 8% said they have used it.
The Share Economy
There’s nothing like a prolonged and ugly recession to bring out the entrepreneurial spirit in millions of Americans. The Internet turns out to be the ideal modern tool to bring together people who have skills to peddle, or stuff to share, with the people who need them.
There have been a couple of notable success stories:
- Airbnb has signed up people in 192 countries who want to rent a room in their homes, or a corner or a couch, to travelers for short-term stays.
- ZipCar (NASDAQ: ZIP) operates as a car sharing club, allowing members to rent a vehicle for a couple of hours instead of a whole day or more. The club now has 777,000 members, at latest count. It proved so popular in urban areas and college campuses that Avis Budget Group (NASDAQ: CAR) just bought the company for $500 million. Its rival Hertz (NYSE: HTZ), meanwhile, launched Hertz on Demand to compete.
The success of Airbnb and ZipCar has prompted plenty of imitators with a twist—like rooms for rent in fancy villas, or luxury rental car clubs.
For sheer scope of vision, however, it’s hard to beat TaskRabbit, a cottage industry for cottage industries launched by entrepreneur Leah Busque in 2008. Anybody can request a participating “TaskRabbit” to take on just about any task or chore, skilled or unskilled, that they can’t or don’t want to do for themselves. These can range from the routine (pet sitting; house cleaning) to the ridiculous (someone to dress up in a gorilla costume for a prank call). Not unnaturally, there’s a whole category for people who would like someone else to assemble their Ikea purchases. In addition to the usual feedback forum, TaskRabbits are screened in advance.
The "Second Screen"
This might be the most obscure buzz word of all, yet it’s the one that has been driving the entertainment industry bonkers the longest. Example: CBS (NYSE: CBS) Sports made a lot of advertising dough—a record $240 million—by televising the Super Bowl, and worked hard to make some more on its “second screen,” the Internet companion site. It drew $10 million to $12 million in additional advertiser revenue, according to AdWeek, and that’s considered a breakthrough of sorts.
Despite the growing sophistication and entertainment value of companion sites, the real-time “second screen” experience has been pretty much provided by Twitter and, to a lesser extent, Facebook (NASDAQ: FB).
Here’s a theory: The “second screen” experience will continue to be dominated by Twitter and/or Facebook, even during big events like the Super Bowl. That’s because watching and chatting with friends and munching chicken wings all at the same time is about as much as a normal human brain can manage.
Yet another buzz word has proved to be a chimera, and that word is multi-tasking.
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