The Social

The simple concept of having virtual-good payments in games sent directly to your cell phone bill has gotten a lot of buzz--and stirred up a lot of rivalry. One of the start-ups looking to pull this off, Boku, announced Monday that it has signed on a dozen new gaming partners, both a few based on the Facebook platform and some others that are either Web-based or desktop downloads.

The partner companies are Waves, Cie Studios, Cyberstep, GameDuell, IGG, King.com, NHN USA, Ntreev, Outspark, PerfectWorld, Snap Interactive, and Zoosk. Most of them aren't household names: they're game manufacturers, not the games themselves, and some of them are most prominent outside the U.S.

There are a handful of companies trying to grab market share in this space, but the two who have been most vocal about making inroads have been Boku and rival Zong, which last month announced that it would allow members to sync credit cards with their phone numbers, allowing for larger payments and putting the company closer to direct competition with the likes of PayPal.

Boku says it's sticking to the mobile-number-only strategy, choosing instead to ink more deals and emphasize its global reach: with the current round of partnerships, the company says it will have 200 million registered users added to its ranks (no word on how active they all are, or how much redundancy there is across games).

Additionally, Boku has made some infrastructure upgrades that it says will improve the user experience, including the ability to detect whether a phone number that has been entered is landline or mobile--and if mobile, what carrier it's coming from.

The heated mobile-payment wars are expanding...beyond mobile. Zong, one of the start-ups hoping to capture the market for online micropayments billed to a mobile phone, announced Thursday the debut of "Zong Plus," which lets members link credit or debit cards to their Zong accounts.

It's another move that pits Zong against Boku, a competitor that launched right around the same time with broader global reach--last month, it announced its expansion to subscription-based services in addition to on-demand micropayments.

At launch, Zong Plus is compatible with Visa, MasterCard, Discover, and American Express accounts,

"Today you've got a variety of products for different kinds of payments and services," vice president of product management Hill Ferguson told CNET News. "You've got PayPal. You've got several of us in this mobile payment arena. What Zong Plus does is just elevates us into a different mobile payment type."

On the surface, adding traditional credit card payments seems to defeat the purpose of Zong, which inherently tries to offer a simpler and more universal alternative for small payments (cell phone carriers put a cap on how much can be spent). But Ferguson said that Zong Plus, which is free for participating merchants to upgrade to, "is an optional feature for consumers who have payments cards and feel that the incentive that we offer is powerful enough for them to open up their wallet and type in the information."

What's that incentive? Part of Zong Plus is a loyalty program that will rack up points much like airline miles. In a participating game or other micropayments-linked application, this means that when enough points have been accrued, the member may be alerted that their next purchase is "on the house."

Whether it will work is still unclear. Zong has deals with social gaming and virtual-world companies like OMGPOP, IMVU, and Gaia Online, but there are still enough rivals offering similar packages as well as the off chance that a big e-commerce player like PayPal could launch a service of its own and snuff out the competition.

The announcement comes in advance of the Virtual Goods Summit in San Francisco, where pretty much any start-up involved in the latest generation of e-commerce (read: magic swords and Mafia dons) will be showing off its wares. Plenty of other companies will be making announcements, too, presumably some in the payments space.

A test 'Square' in action, and a screenshot of the geo-tagged receipt.

(Credit: Engadget)

Well, we finally have a glimpse at "Square," the new mobile payments venture coming from Twitter co-founder and chairman Jack Dorsey. As expected, it's a little hardware add-on that can turn an iPhone into a credit card reader.

The funny part: Details about the small-business-oriented project have been on the Web for months. It was just that nobody had put two and two together until some eagle-eyed folks at Engadget realized that a URL on a screenshot of the "Square iPhone Payments Venture" first reported by Coolhunting matched a domain registered to Dorsey.

Dorsey, who stepped down as Twitter CEO almost exactly a year ago, is headquartering the company in New York, though we hear he already has employees in both Gotham and San Francisco. Its Web site will likely be located at SquareUp.com. Currently, that site is a collection of links to a smattering of businesses, including Sightglass Coffee, a new San Francisco coffee shop in which Dorsey has invested. (Wanna bet they're testing Square out there?)

From Coolhunting:

The innovation is in a small, plastic card reader that fits in to the headphone jack of an iPhone (or iPod Touch) and transfers the credit card's swipe data to the app. After the employee enters the amount to charge, the customer confirms by scrawling their signature with their finger and then either one enters the customer's email address to send the receipt to. The payment is processed by Square for a small percentage plus a fixed fee; the funds are transferred directly to the store's bank account, cutting both time and complexity on the processing side. The customer's receipt includes a map showing the location of the transaction which is handy for those who record, sort and file such things.

We heard that the venture is being called Square rather than "Squirrel," its originally reported name (according to TechCrunch's MG Siegler, this is because it looks kind of like an acorn) due to some unclear legal-copyright-licensing-whatnot issue. CNET News first reported the name change along with the news that Dorsey had been an angel investor in location-based mobile navigation start-up Foursquare.

Funding a hardware venture is typically more expensive than a Web-based one for obvious reasons: the up-front cost of production and manufacturing.

But two sources with knowledge of Square's logistics said that Dorsey believes he can keep production costs extremely low, possibly manufacturing a "square" at a cost of about 40 cents apiece. The company may then even give the devices away for free, making money instead on transaction fees. That's the old Gillette razor business model--make the razors cheap or even free, but replacement blades more expensive.

Regardless, we hear Dorsey has been working on a funding round.

Searching for a Zipcar with the company's new iPhone app.

(Credit: Zipcar)

SAN FRANCISCO--It's like the ultimate yuppie geek convergence: there's finally an iPhone app for car-sharing company Zipcar. To put it in the most stereotypical of terms, you now no longer need a computer to book that Prius for your weekend Whole Foods run.

Apple gave a green light to the free download earlier this week, so Zipcar members can now use the app to find and book available cars using GPS-enabled maps, access account and car database information, contact the company's headquarters, and use a "virtual key fob" to lock and unlock their reserved cars. It's the first-ever mobile endeavor for Zipcar besides text-message alerts, something that may be surprising considering the company's outside-the-box, next-gen image.

"This is an entirely new channel of communication with members," Zipcar Chief Technology Officer Luke Schneider told CNET News in a meeting at the company's San Francisco office, adding that over a quarter of the company's 325,000 members (which it calls "Zipsters") own iPhones. Applications for more mobile platforms are tentatively on the way, he added, as another quarter of Zipcar members own non-iPhone smartphones. But he said the company hasn't decided which to develop next.

Zipcar, founded a decade ago in Cambridge, Mass., is designed as an alternative to car ownership and rental. You pay by the hour, gas and insurance are included, and cars are scattered in parking spaces across cities and university towns (the places where living without a car is most feasible) so that once you've booked a vehicle, you can show up and unlock it with your membership card. Schneider came on board when the company merged with a rival, Flexcar, about two years ago.

With its iPhone app, Schneider said, Zipcar hopes to achieve a twofold goal: first, making the membership experience easier by allowing for mobile reservations and database information; and two, attracting new customers by letting them toy with the app even if they aren't already members. Load up the "virtual key fob" without logging in or having a reservation, and a pop-up message will appear saying, in quirky Zipster fashion, "You do not have a current reservation, but you can make fun sounds anyway." In other words, you can push the horn-honking button until your friends want to wring your neck. It's about "the experience" of the Zipcar brand, Schneider explained.

For the company's management, the mobile app can also fine-tune some of the data that Schneider says they're "constantly obsessed" with: which car models are in demand at which times of the day and year, which locations seem over- or under-served, and so forth. It doesn't collect any sensitive personal data, he assured me.

I had a chance to test drive the new iPhone app on Wednesday, when I picked up a Zipcar to drive to Mountain View for the TechStars Investor Day event. The app is extremely well-designed, and making a reservation is a no-brainer. It's overall terrific branding for Zipcar: newcomers will certainly get the idea that this is a company that's tech-savvy, rooted in convenience, and has a sense of humor.

And Zipcar needs to keep up that image, now that the car-sharing trend is catching on with rivals from both the nonprofit space (like the Bay Area's City Car Share) and the mainstays of the rental car industry.

The Zipcar iPhone app's 'virtual key fob' is cute, but more gimmicky than convenient.

(Credit: Zipcar)

"Zipcar established a category that didn't exist yet," Schneider said of competition in the market. "It validates the space when bigger competitors come in."

My gripe with the app, unfortunately, is with the nifty part that everybody's talking about. The unlock-by-iPhone feature is more of a fun toy than a utility; it simply isn't as convenient as it should be. First, you've got to load up the app and let it log you in--which takes a few seconds, enough time for me to fish around in my wallet and find my "Zipcard," the ID card that also locks and unlocks reserved cars. Then, upon hitting the lock or unlock button, the app has to communicate with Zipcar via data connection--not a short-range signal like an automatic door opener--and sometimes that can take another second or two. (Once, in fact, it just didn't seem to want to work.) Typically, I just got impatient and dug out my card.

Additionally, the app won't replace the credit-card-sized "Zipcard." They'll still need to use the card, not the iPhone interface, to unlock a car when they initially pick it up.

But that's a security regulation more than anything else, Schneider told me: "We don't want you to be stranded if your battery's run out."

Your decaf caramel macchiatos and no-whip pumpkin spice lattes are going mobile.

In a double-shot launch (sorry), coffee giant Starbucks unveiled late Tuesday its first two iPhone apps. The first one, called MyStarbucks, is a no-brainer: you can use the phone's GPS capability to find nearby stores (previously, this was available via text message), search ingredient and calorie information for Starbucks beverages, study coffee bean varieties, and build virtual drinks to see what exactly would be in one if you ordered it.

But it's the second app, called Starbucks Card Mobile, that could be worth a double-take. The app allows for balance check and refilling of Starbucks gift cards, which the company has expanded into a customer loyalty program by offering discounts, free refills, and two hours of free Wi-Fi to cardholders. And in two experimental test markets, the Starbucks Card Mobile application can use a barcode to replace the plastic gift card altogether.

As far as mobile e-commerce is concerned, this could be a big deal.

Mobile retail promotions, from text-message codes to redeem for free drinks to the nascent pop-up deals in geolocation app Foursquare, are nothing new. And mobile payments are commonplace in countries like Japan and South Korea. In the U.S., they haven't caught on yet. But having a ubiquitous national retailer like Starbucks in the game could change this.

The barcode-based electronic gift card from the new Starbucks iPhone app.

(Credit: Starbucks)

"We're really venturing into new waters in terms of mobile payment," Stephen Gillett, senior vice president of digital ventures at Starbucks, said regarding the Starbucks Card Mobile app.

"The mobile app is really the powering of some of our most frequently used functions on (the Starbucks card's Web site) and our in-store activity in terms of balance and payment and favorite orders," Gillett said. The app was developed internally with some help from third-party companies like mobile billing start-up mFoundry, he said.

Unless you're geographically very lucky, you won't be able to pay for a venti frappuccino with your iPhone just yet. Only 16 Starbucks outlets, eight in its home turf of Seattle and eight in Silicon Valley, can currently handle the barcode-based gift cards. These are stores already internally designated as test spots for new Starbucks technology, Gillett said.

"In some of these Seattle stores we've tested store manager laptops, allowing them to get instant messaging, full access to e-mail, and conferencing," he said. "These are some of the stores that got the new AT&T Wi-Fi earlier."

As a result, that means the integration process may be smoother for the test stores than it would be for a random Starbucks elsewhere in the country. "The store employees are used to getting new kinds of technology, new kinds of services earlier than most markets," Gillett said.

Estimates vary on just how big the U.S. gift card industry is, but according to the Federal Reserve, it's certainly well into the billions and continues to grow. As for Starbucks, already one in seven transactions at the coffee chain involves its array of gift and loyalty cards, Gillett says. "We see a significant amount of our traffic represented by loyalty cards of some sort," he said.

And eliminating that need for a physical gift card is a pretty obvious next step, especially if you've ever spent any time fishing around for one in a handbag.

The question is whether a new concept like barcode-based gift cards can easily scale to a chain as widespread as Starbucks. Mobile barcode systems have typically been rolled out in far smaller contexts--short-term advertising campaigns, for example, or companies with far smaller reach such as Equinox, a high-end gym in a handful of U.S. cities that recently began letting members check in with an iPhone-based barcode. And while Starbucks has been battered by the recession and has closed several hundred stores in the U.S., it still operates or licenses over 10,000 outlets in the U.S. and thousands more overseas.

So Starbucks is taking a slow approach to mobile payment testing, which means that customers outside of Silicon Valley and Seattle might not be seeing it any time soon.

"We're really working on getting that (customer) feedback before we put any long-term plans in future markets," Gillett said. "This really is a consumer-driven app in so many ways. This is an app that we need the customer experience to have a very strong influence on."

He was equally mum om whether Starbucks Card Mobile will offer advance mobile ordering options or other potential features. "Again, we're really looking to this app hitting the real world before we lock in future functionalities," Gillett said.

The same goes for taking the app beyond Apple's handset. Apple and Starbucks have a years-long and complicated history encompassing both iTunes and AT&T wireless service, but a mobile payment option ideally wouldn't be restricted to the iPhone.

"We are definitely interested in non-iPhone based platforms, particularly Windows and Android and BlackBerry," Gillett said. "But at this point we're just really focused on the launch for this."

Mobile payment start-up Zong is extending its product to include subscription-based services, the company announced Tuesday.

Gaming site OMGPOP and News Corp.-owned photo-sharing site Photobucket have signed on as launch partners.

So here's what this means: instead of entering credit card billing information, subscribers to OMGPOP and Photobucket can bill their subscriptions directly to their phone bills by entering their cell phone numbers and then responding to a confirmation code. Previously, the Zong service could only be used for one-at-a-time micropayments rather than subscription-based services.

With Zong's new development, which is currently available only on U.S. carriers (and ideally international ones soon, the company said), it can process monthly subscription payments of up to $9.99. Bigger transactions are tougher because of the company's complicated relationships with cell phone carriers.

Opening up its mobile payments to subscription services may give Zong an advantage in its close rivalry with Boku, another start-up offering a very similar pay-by-mobile-number service. The two have taken slightly different approaches to carrier relations, which gave Boku a bigger global reach at its launch--and it's continued to grow fast.

Zong, meanwhile, says that more than 10 million unique users have used the service to process payments so far.

A screenshot of the back-end dashboard of Citysourced, as displayed at TechCrunch50.

(Credit: Josh Lowensohn/CNET)

SAN FRANCISCO--It's about time people got excited over here.

It's not that the smattering of fresh new companies presenting at the annual TechCrunch50 start-up launch conference was boring, per se. Most of them, in fact, had an extremely practical slant to them, like the array of job- and car-hunting sites that take something Craigslist does and make it way less sketchy. And therein lies the problem: Sometimes, those sorts of productivity and next-gen enterprise start-ups simply aren't that cool and shiny when you stick them into a PowerPoint demo.

But it was on the morning of the second day of the conference that the judges, audience, and organizers seemed thoroughly impressed by an app that they could actually use. Meet Citysourced, a new iPhone app that lets the residents of an individual city log complaints and inquiries--graffiti, potholes, neighbors who go streaking--and send them straight to City Hall.

They had two announcements accompanying the launch: first, that Palm had made a research-and-development investment in Citysourced to build an app for the Pre handset; and second, that the city of San Jose, Calif., had signed on board to use Citysourced as its official mobile 311 system.

You might be thinking that this sounds familiar. That's because it's not the only player in the space: Open311 has gotten some buzz for applying the open-standards model to building civic feedback systems. Also, earlier this year the city of Boston commissioned a mobile development company called Connected Bits to build a complaint-filing app called Citizen Connect.

But none of the existing civic-engagement apps have caught on yet, and Citysourced's mix of no-brainer efficiency and easy-to-read maps seemed to impress both the judges and the audience. So did the back-end Web interface for mapping and tracking inquiries and complaints. Digg founder Kevin Rose, one of the judges, called it "an amazing idea" and started offering suggestions: he wanted to be able to subscribe to a feed of updates from his neighborhood, for example, as well as see volunteer opportunities and vote on the priority of issues, Digg-style.

Citysourced "just seems that it's one that's sort of a no-brainer," TechCrunch founder and conference organizer Michael Arrington said after the presentation, asking for a show of hands in the audience to see how many iPhone owners in the audience would want to download the app. Many arms were raised.

The challenge, as panel judge Tim O'Reilly pointed out, is that Citysourced can only beat its competitors if it has the best approach to the market, namely its effectiveness in getting new cities on board. The start-ups' executives said that they're already in talks with some more of the 10 biggest cities in the country and should have more announcements soon.

In either case, the laptop-wielding masses at TechCrunch50 seemed to think that this new mobile start-up is one to watch.

Ashton Kutcher at the Brainstorm conference earlier this year

(Credit: Ina Fried/CNET News)

Everybody panic!

Seemingly unable to let any hot social media start-up escape his hunky clutches, it appears that actor and prolific Twitter oversharer Ashton Kutcher is now using where-you-at, ping-your-friends city guide app Foursquare. A tipster pointed me to a Foursquare account for user "aplusk," the same handle that Kutcher uses on Twitter for his 3 million-plus followers.

Is it real? Well, his friends include Digg founder (and occasional bromancer) Kevin Rose, videoblogging personality Justine Ezarik, and "mrskutcher," which is the Twitter username for his wife, actress Demi Moore. Since Foursquare requires mutual approval of friend connections, this would indicate that the likes of Rose and Moore believe the account to be legit. And since Kutcher's Twitter account is linked to the Foursquare profile, which requires using the Twitter log-in credentials, it's either legit or Kutcher's Twitter account has been hacked. (And there have been no indications as to the latter.)

So why is this important? Well, it could be pretty momentous for Foursquare if Ashton Kutcher sticks around.

All joking aside, the 31-year-old Kutcher has been a prominent, and admittedly important figure when it comes to bringing social-media tools into the mainstream. His race to beat CNN to 1 million Twitter followers (he won) was one of the publicity blitzes that put the name of the microblogging service on the pop-culture map. Foursquare, a tiny New York-based start-up that launched only six months ago out of the ashes of the ill-fated Dodgeball and still hasn't wrapped up a round of venture funding (though I hear they're working on it) could really get a boost from this--assuming their servers are ready for it.

But it also raises an important security question. Unless they're using Foursquare to broadcast their locations for promotional purposes (as some party photographers and DJs in NYC are already doing, and it'd be certainly interesting if Kutcher did something like this), celebrities using any kind of GPS-based or geolocation app could be making themselves vulnerable to varying degrees of annoyance ranging from pesky fans with cameras to full-on stalking. It could also make Foursquare an appealing target for hackers.

But I assume Kutcher, who seems like a pretty smart guy, will be careful with who he lets onto his friends list. Now for the real question: how long before he unlocks a "Crunked" badge?

UPDATE (1:06 p.m. PT): Just to clarify, a few people were under the impression Kutcher had already deleted his Foursquare account. That was actually due to a broken link in this blog post; Kutcher is, for the time being, still on Foursquare. (My bad.)

On a completely different note, I recommend reading this follow-up post on branding consultant Matt Spangler's blog about what Ashton Kutcher means for Foursquare.

Nokia has signed an agreement to acquire Cellity, a small German company that creates social-network contact management and address book aggregation services for mobile devices.

Cellity's 14 workers will become Nokia employees. But the service will be shut down and existing user accounts will not be transferred to Nokia.

Cellity, which was founded less than three years ago, is based in Hamburg.

Terms of the deal have not been made public. The acquisition is expected to close in the current quarter.

Acquiring small start-ups is nothing new for Nokia. It acquired Plazes last year while the locator start-up was still in private beta, for example. The mobile conglomerate also has a history of willingness to rebrand. After acquiring a media-sharing site called Twango several years ago, Nokia ditched the start-up's moniker and folded it into a new software division called Ovi.