Wednesday, November 26, 2008

Loss Making HABBO Starts Giving Away Points

Ok, I will try and be discreet and professional here and offer my opinion on this latest strategy by Sulake to offer a "dual currency system" i.e.; one you buy and one you earn. So how should I put this? Maybe I will let Homer handle this. Finally I can spill the beans Posted by: Sulka
As of today, Habbo is a dual currency economy. Credits are bought and used to purchase persistent value, and you can earn Pixels by doing Achievements and just hanging around online. We're piloting the change in UK, and if it's working fine, the other countries will get it at some point in the future (as usual). The user feedback is of course mixed, but given the ratio of positive vs negative comments, I think we'll get pretty good overall rating in the final evaluation of the release. I'd like to thank everyone who's participated in the GDC "Free to Play, Pay for Stuff" round tables - I'm fairly sure this would not have happened without those sessions. And of course, Daniel James and Matt Mihaly for graciously sharing so much of what they've done with virtual economies. Unfortunately I can't spill all the beans on this but rest assured what's out now is not the whole system. There's still a lot to work on, and most importantly a lot of user feedback to read. It seems I'll be giving a post mortem of sorts about this in GDC, where I hope I can share a lot more than this. :)

Technocrati lays off 6, cuts pay - PaymentGuy's Blog Profitable

This sucks. Fortunately, the PaymentGuys and Girls are profitable and growing:

"Technorati announced on Tuesday that it was laying off six employees and cutting pay for the remaining members of the blog search engine company. Richard Jalichandra, the president and chief executive of the San Francisco-based startup, a leading site used to track and index blogs, announced the moves in a posting on the company blog. "There's not much I can say about the economy that hasn't been said a hundred times already," Jalichandra wrote. "We're facing the worst crisis of our lifetimes, and no one can say with certainty what lies ahead or how long it will last." Jalichandra said that to allow the company to "weather the storm," six employees were being laid off and two others would not be replaced. He said management would be taking pay cuts ranging from 15 percent to 25 percent and remaining employees would have their pay cut by 10 percent. The number of people employed by Technorati was not immediately available. Despite the cost-cutting moves, Jalichandra was optimistic about the future. "In spite of these challenging times, Technorati's prospects haven't changed, and in fact, have never been brighter," he said. "In the long run, Technorati will emerge a stronger and more profitable place for us, and the bloggers we serve, to thrive personally, professionally and financially." Technorati is the latest Silicon Valley company to announce job cuts. Challenger, Gray & Christmas, Inc., a Chicago-based global consulting firm which tracks job-cut announcements, reported this month that the technology sector is on pace to lose 180,000 jobs this year, the most since 2003.

Tuesday, November 25, 2008

Sybase Partners With Paybox

The deal, according to analysts, paves the way for paybox’s mobile payment software to leverage Sybase (News - Alert) 365’s integrated mobile messaging services and offer customers an open mobile payment infrastructure standard. “This agreement is a natural progression of where the market is headed and what customers are demanding from their mobile phones,” said Eckhard Ortwein, CEO of paybox. The deal supports a global effort to kick-start mobile payment services and help financial institutions, mobile operators as well as merchants.

Monday, November 24, 2008

Sybase CEO sees mobile commerce as future

John Chen, chairman, CEO and president of Sybase, has led a dramatic turnaround for the Dublin company by focusing it on infrastructure software that helps companies go mobile. Now a leader in mobile middleware, device management, messaging and mobile databases, Sybase topped $1 billion in revenue last year and is on pace for a record 2008. The next big challenge for Sybase is to get consumers to consider mobile commerce and payments through their phones. The Chronicle caught up with Chen to talk about the economy, mobility and the future of smart phones.

Q: Can you talk about the economy and its effect on your business and the high-tech sector in general? How has it changed in the last six months?

A: So far, we've had three record quarters in a row and we expect to continue that for Q4, and ... we'll have a record year. But the revenue line is going to be slow (for tech companies), and people expected that mostly because the export market is going to be weak. Will it affect Silicon Valley? Absolutely. Overall, I think the tech sector will have a difficult 2009, mostly because of the global market and not so much because of the United States. I've seen business activity in the United States that's encouraging. One thing we've been doing well in is financial institutions. It sounds illogical, but they're still buying - they're just buying different things. Now they're buying analytics, because they want to analyze exactly what risk they're taking and what the business information people are telling them. We're also doing well because of mobility. Some companies are spending money on mobility because it's ... a much cheaper channel of outreach to customers and to market to their customer in some cases.

Q: Can you talk about the direction your company has taken in terms of staking its success on mobility?

A: In the early 2000s, when the beginning of the tech bubble burst in the e-business commerce world, we weren't really a big player in that space. At the time, we had a choice to either get into it or get into a new paradigm. We decided more value could be added not only to our business but to our customers by getting into new things. We thought with broadband, e-commerce, cheaper devices, more available bandwidth wirelessly, that has something to do with how business operates in the future. That was seven years ago. When we first started, we didn't do more than $10 million revenue in one year. Next year, we're going to do over $400 million in revenue for mobile.

Q: What is your vision for the mobile worker - how will mobility figure into their work on a daily basis?

A: Our view is there is no need for any connected stations of any sort. It's about anytime, anywhere to anybody. All the enterprise messaging software connectivity should be able to go wireless or wired, it should give you the exact same experience. Are we there yet today? No. But over the years, we will see more and more convergence.

Q: Where are we right now in terms of mobilizing workers, and what do you and other companies need to do to achieve this vision?

A: Enterprise needs to treat (the mobile phone) as a platform that is part of the enterprise stack rather than treat it is as just a communications device, which is profoundly different. You have to change the business application rules. It could be a Research in Motion, iPhone or a Symbian device, and it should not make any difference. There should be no difference in sending your information wirelessly or over wires, except on the security side. What we need to do is continue to expand the capability of software to make it so enterprises can adopt it as a platform.

Q: What kind of effect is the iPhone having on business?

A: Companies are very intrigued by the iPhone. It's created a lot of interesting questions and demands, and it helps me particularly because for first time people start thinking: "I may have some part of my organization on RIM, or some use specialized devices and some may use Symbian or Linux, and some have the iPhone, but I want their experience to be the same and I want to control all of that." In the past I wasn't able to convince customers that heterogeneous connectivity was very important, but now it's completely different. Now you need to accommodate multiple devices.

Q: How do you see smart phones evolving beyond enterprise? Is this a device we'll all be carrying around every day?

A: About 30 percent of phones sold are smart phones; it's the fastest-growing segment of phones today. You will see smart phones get cheaper and soon enough there will be no need, except for giving a kid a phone, for a nonsmart phone. The question is how much you pack into it.

Q: Your company is also pursuing mobile commerce and mobile payments. It's not something Americans do much of right now. How do you see that changing?

A: Yes, it's not common in the U.S., but it's common in other parts of the world. The future is the idea of a credit card embedded to a phone number or device. The ultimate thing is we can pay each other and you would get confirmation that there has been a transfer. It's very early in the market. Symbian's intention is become the plumbing guy. I don't want us ever to become the guy that takes $5 from you and gives it to someone else. We want to provide the platform and plumbing to allow a mobile payment system to come about.

Q: Any thoughts on the new Obama administration and how it can best help the tech sector?

A: The good news is that he's talking about having a chief technology officer, and rumor has it that it's someone that's near Silicon Valley. That's good. I hope the CTO will be someone who is very focused on helping the tech industry grow. I hope they'll be a good voice in Washington talking about the needs for investment, innovation, protection of patents and will be someone who promotes trade. And if Obama carries through with promises to invest in green tech, I think it's all a positive thing. And also with immigration, we need to make sure we have enough skilled laborers in the U.S. to help the tech industry, which is always looking for skilled people. These are all things I hope we'll be able to tackle with a good CTO.

Sunday, November 23, 2008

Linden lab Uses 3rd Parties to Sell Lindens (L$'s) Internationally

Strange that Linden Lab cannot do this themselves and save Residents the padded commission costs for 3rd party exchange operators ... or better yet, keep the commissions themselves. Seems to PG this is a way to pass the risk on to 3rd party payment providers and international resellers for local legal compliance and regulation. Clever move short term given the exposure to local laws on money transmission and virtual currency exchange issues. However, it is doubtful this is a viable confidence-in-the-L$-building strategy long term:

"GlobalCollect Partners with DX Exchange for European Online Currency Conversion to Virtual Money
DX Exchange has signed an agreement with GlobalCollect, the world's premier payment service provider of local e-payments, to enable Second Life Residents to exchange European currencies for virtual money

Last update: 4:16 a.m. EST Nov. 17, 2008
AMSTERDAM, The Netherlands, Nov 17, 2008 (BUSINESS WIRE) -- DX Exchange, a Dutch 3D media company and Virtual Service Provider, has teamed up with GlobalCollect to allow Residents of Second Life(R), the popular 3D online virtual world created by Linden Lab(R), to exchange Euros for Linden Dollars, the currency used to pay for goods and services offered in Second Life. The local e-payment methods offered via GlobalCollect's single-interface platform WebCollect will initially be direct debits plus Giropay, Paysafecard, Ukash, and Wallie in Germany as well as iDeal, Paysafecard, Ukash, and Wallie in the Netherlands. Future plans entail expanding this service to the UK, France, Belgium, and other European countries.
Via GlobalCollect's online payment platform WebCollect, the Second Life community already had the ability to buy Linden Dollars by means of credit card payment in US Dollars since 2007. The newly formed cooperation between DX Exchange and GlobalCollect enables European Second Life Residents now to acquire Linden Dollars by paying in Euros and soon British Pounds. Plus, they can select from a choice of preferred local payment options while receiving local language support.
Bart Bockhoudt, CEO of DX Exchange said: "Teaming up with GlobalCollect gives us the opportunity to expand into the rest of Europe faster and on an even more professional level. Meaning, we can focus on our core business of providing local support."
Jan Manten, CEO of GlobalCollect, continued "We've already been servicing credit card transactions in US Dollars for Second Life since April 2007. Thanks to the collaboration with DX Exchange we can now expand this service to include European currencies and a wide choice of popular local payment methods. In addition, we offer a comprehensive Fraud Screening Service to minimize the risk of fraudulent transactions within the online environment."

The even resell SL land al la Anshe Chung.

E-Gold Sleasebags Convicted & Sentenced

Three directors of E-Gold, in addition to its Gold & Silver Reserve parent company, indicted in April 2007 of running a platform that have become a haven for criminal activities like processing investment scams and payments for child pornography on Thursday, 20 November, received their sentences. However, a United States of America federal judge decided last Thursday not to impose a prison sentence on the senior directors of E-Gold. Instead each of them was sentenced to three years of probation and 300 hours of community service with some fees to be paid.

Gold & Silver Reserve CEO, Douglas Jackson, who faced a maximum sentence of 20 years in prison and a $500,000 fine was spared the heavy fine because, according to his attorney, he’s deeply in debt. Thus he was sentenced to pay only $200 fine with 300 hours of community service time of supervision.

Reid Jackson, Douglas Jackson’s brother, and E-Gold director Barry Downey were each sentenced to three years of probation, 300 hours of community and ordered to pay a $2,500 fine and a $100 assessment fee each. Online sources say the maximum fine E-Gold and Gold & Silver Reserve faced could have been $3.7 million, but because neither company could pay that much, they were fined $300,000 with the condition that $10,000 be paid on Monday, with further monthly payments to start in May 2009.

E-Gold and its corporate affiliate, Gold & Silver Reserve Inc. had, each, pleaded guilty to conspiracy to engage in money laundering and conspiracy to operate an unlicensed money transmitting business. The principal director of E-Gold and CEO of Gold & Silver Reserve Inc. (Gold & Silver Reserve), Dr. Douglas Jackson, 51, of Melbourne, Fla., pleaded guilty to conspiracy to engage in money laundering and operating an unlicensed money transmitting business. E-Gold’s other two senior directors, Barry Downey, 48, of Baltimore, and Reid Jackson, 45, of Melbourne, each pleaded guilty to felony violations of District of Columbia law relating to operating a money transmitting business without a license. E-Gold, Gold & Silver Reserve and the three company directors were charged in an indictment returned by a federal grand jury on April 24, 2007.

Interestingly, when Douglas Jackson acknowledged the company was under investigation in 2004, the illegal activity still went on with E-Gold, the company during trial ascribed this to bad legal counsel, which convinced them the site does not have to be licensed as a money transmitting business. The court accepted the argument of Downey that he was unaware of the company’s need for a license, even though he is a practicing lawyer.

The defendants argued they made every effort to cooperate with investigators while the prosecutors questioned the use of E-Gold’s cooperation as the directors’ tried to circumspect government investigation.

In addition to the fines and prison sentences, each of the defendants agreed that E-Gold and Gold & Silver Reserve will move to fully comply with all applicable federal and state laws relating to operating as a licensed money transmitting business and the prevention of money laundering which includes registering as money service businesses. Also, as part of the plea agreement, the businesses will create a comprehensive money laundering detection programme that will require verified customer identification, suspicious activity reporting and regular supervision by the Internal Revenue Services’ (IRS) Bank Secrecy Act Division, to which the Financial Crimes Enforcement Network delegated authority according to federal regulations. E-Gold and Gold & Silver Reserve will hire a consultant to ensure their compliance with applicable law and hire an auditor to verify the companies’ claims that all transactions are fully backed by gold bullion. Under federal law and District of Columbia law, in addition to other jurisdictions, the E-Gold operation was required to be licensed and registered as a money transmitting business. However, according to information in plea materials, the E-Gold operation functioned as a money transmitting business without registering with the federal government and without a license in the District of Columbia. Because these businesses and individuals illegally failed to register and follow applicable regulations under federal and District of Columbia laws, the resulting lack of oversight and required procedures created an atmosphere where criminals could use “e-gold”, or digital currency, essentially anonymously to further their illegal activities. Specifically, according to information contained in plea materials, the E-Gold operation provided digital currency services over the Internet through two sites: and “By failing to comply with money laundering laws and regulations, the E-Gold operation created an environment ripe for exploitation by criminals seeking anonymity in conducting online transactions,” said Acting Assistant Attorney General Matthew Friedrich. “This case demonstrates that online payment systems must operate according to the applicable rules and regulations created to ensure lawful monetary transactions.” “The operations of E-Gold Ltd. and the other defendants undermined the laws designed to maintain the integrity of our financial system and created opportunities for criminal activity,” said U.S. Attorney Taylor. “Because of the successful prosecution of these defendants, digital currency providers everywhere are now on notice that they must comply with federal banking laws or they will be subject to prosecution.” The case was investigated by the U.S. Secret Service, IRS Criminal Investigation and the FBI. The case was prosecuted by Assistant U.S. Attorney Jonathan Haray of the U.S. Attorney’s Office for the District of Columbia, Senior Counsel Kimberly Kiefer Peretti of the Criminal Division’s Computer Crime and Intellectual Property Section and Laurel Loomis Rimon, Deputy Chief of the Criminal Division’s Asset Forfeiture and Money Laundering Section, with assistance from the Criminal Division’s Child Exploitation and Obscenity Section. William Cowden of the U.S. Attorney’s Office Asset Forfeiture Unit assisted with forfeiture issues involved in the case.