EBay’s $135M Acquisition of Where Could Drive PayPal’s Mobile Future; Boston CEOs React to Another Silicon Valley Buyer

4/21/11Follow @gthuang

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mobile wallet—a longstanding goal of digital payment technology (and an increasingly urgent one, with tech giants like Google and Apple jumping in). As I see it, Where understands the pain points of local merchants and consumers and can give PayPal a stronger foothold in mobile; PayPal, meanwhile, understands e-commerce and, of course, payments. So although the fit isn’t obvious at first, the two companies are complementary, and each wants to move toward the other’s strengths.

The chief executives of other mobile startups in the area agree. “Where is a clear example of PayPal’s acquisition strategy to dominate the convergence of online/offline payments,” says Andrew Paradise, CEO of Boston mobile commerce firm AisleBuyer, in an e-mail. “We’re excited to see Boston-based mobile location startups closing deals with major Silicon Valley companies.”

Where will certainly face challenges in integrating with the PayPal machine. But “if they are looking above and beyond local search to local value,” the deal has promise, says David Rochon, CEO of Waltham, MA-based SavingStar, a mobile grocery-couponing firm. PayPal’s large reach should also help Where’s service, he says. More broadly, “what will ultimately end up happening is some consolidation” in mobile commerce, Rochon adds. “Here is an example of a mobile play being gobbled up by someone much bigger.”

It’s always interesting to look back on an acquired startup’s life and see where the tide turned. Xconomy first profiled Where back in 2007, when the company (then called uLocate) was promoting its platform for software developers to create location-based apps that help consumers find local businesses and attractions. My colleague Wade was in Where’s office in November 2009 when news of Google’s $750 million acquisition of AdMob hit; Where’s CEO, Walt Doyle, said at the time, “It’s a very good thing that Google, or any company, is willing to pay close to a billion dollars for a company involved in mobile.”

Where didn’t fetch anywhere near that amount, of course, but $135 million is nothing to sneeze at. Still, I couldn’t help but lament the fact that another promising Boston-area mobile technology platform has fallen under the ownership of the West Coast.

Other leaders around Boston are trying not to think that way—and they might have a good point. “We need to worry less about acquisitions, and more about bringing the next one along,” says Jim Schoonmaker, CEO of Newton, MA-based EveryScape, a local-search and imaging firm. “What matters is ideas and [companies] coming to life. If we stay focused on that, the rest of the stuff works out for itself.”

Gregory T. Huang is Xconomy's Deputy Editor, National IT Editor, and the Editor of Xconomy Boston. You can e-mail him at gthuang@xconomy.com or call him at 617-252-7323. Follow @gthuang

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