PayPal’s Pickup of Fig Card, the End of Eons, and the Bose-MIT Lovefest—Some Thoughts

5/2/11Follow @gthuang

I’ve been flat-out for the past week or so. Here are three pieces of Boston-area tech news that are worth catching up on, and a few thoughts on each:

—Fig Card, the mobile payments company that just started last year, was acquired by eBay, via its PayPal division, for an undisclosed sum. Co-founders Max Metral and Hasty Granbery (one of the better names around town) have joined PayPal’s mobile division. My colleague Wade profiled another one of Metral’s and Granbery’s creative projects, Povo, back in 2008, introducing it thusly: “Mix one cup of Wikipedia with one cup of Google Maps, add a generous dollop of MIT-bred geekdom, and bake for about 14 months. Serves 600,000.” These guys look like a great addition to PayPal, which is increasingly focused on mobile commerce (see its recent acquisition of Boston location-based services firm Where).

It’s a fairly small deal, but it raises a couple of big questions on both coasts. Is PayPal getting ready to split off from eBay? And who’s the next mobile company to get bought in Boston? (I have my guess, but I’m not telling yet.)

—Eons, the social networking site for baby boomers launched in 2006 by Jeff Taylor, was scooped up by San Francisco-based Crew Media for an undisclosed price. Eons has been shrinking in recent years, and it spun off its more successful obituaries business, Tributes.com, in 2008. Former Eons employees have told me that the company failed for a number of reasons, ranging from “50 year olds are not viral” to classic startup mistakes like “taking too much money and hiring too fast before you get traction.”

—Audio firm Bose announced on Friday that founder Amar Bose has given MIT the majority of the stock in the company, in the form of non-voting shares. Financial details weren’t given. Professor Bose is an MIT “lifer” who served on the Institute’s faculty for 45 years, retiring in 2001. MIT, which is now the majority owner of Bose Corporation, will receive annual cash dividends on those shares, but has no control over the company and its operations and cannot sell the shares.

A story in the New York Times raised tax questions about the gift, but didn’t resolve the issue. The Times quotes Nate Nickerson, an MIT spokesman (and a former editor at Technology Review), as saying the gift was “very significant” and that the dividends will be “used broadly to sustain and advance MIT’s education and research mission.”

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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  • Philip Cohen

    Who gives a Fig?

    PayPal—eBay’s Ultimate Savior?

    I have no doubt that if and when the retail banks decide they want to take the final step (and probably the increased risk and therefore the extra work involved) and offer a simpler online payments process also based upon their customers’ unique email address identifier, similar to that which PayPal offers, to the many merchants who may otherwise not want (or may not qualify for) a credit card merchant account, and the participating banks offer that service in their usual professional manner via the likes of their partners Visa/Mastercard, the fundamentally clunky, unprofessional PayPal—outside of whatever is eventually left of eBay—will undoubtedly quickly disappear into the history books—there is simply nothing surer than the sun will rise in the morning.

    PayPal at POS.

    Unless PayPal issues every PayPal user with a swipeable credit/debit card—in reality a (GE Money Bank—ugh!) Mastercard—PayPal simply cannot compete with the retail banks’ “cards” at POS. PayPal is otherwise as clumsy at POS as “card” transactions presently are relatively clumsy at online transactions. PayPal’s only advantage is its mandatory offering on the now sickly eBay Marketplace and its use of the unique email address identifier which very well suits online transactions only. Regardless, even accepting that the FigCard process may enable users to make POS payments with their latest toy phone, why would anyone want to leave funds idle in a (non prudentially guaranteed) PayPal account so that they could use PayPal at POS? Why would any off-line merchant risk providing goods/services and then potentially have to wait weeks/months before actually being able to get their funds from the “no responsibility accepted” PayPal process? Think about it for a moment—Frightening. Then there is always the burning question, how can PayPal ever effectively manage the credit/transaction risk without knowing the parties to the transaction the way that the retail bankers, ultimately at either end of the transaction, know their customers? They can’t.

    eBay’s Chief Headless Turkey is seriously delusional if he truly thinks that PayPal, outside of the dying eBay Marketplace, will be eBay’s savior in the long term.

    Enron / eBay / PayPal / Donahoe: Dead Men Walking.

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