Sears CMO Richard Gerstein on Marketing in Virrtual Worlds

From VWN; "Last month Sears launched an ambitious back-to-school campaign across seven different youth-oriented virtual worlds and avatar sites. It's a new direction for a major brand. While some, like Scion, have run multiple campaigns in different virtual worlds, this is the first to aim for this wide of a reach as a part of a cohesive campaign. It's still early, but the kids are starting to head back to school, so we caught up with CMO Richard Gerstein for an email Q&A about the early results, why Sears took this approach, and what virtual worlds offer to the department store giant.
http://www.virtualworldsnews.com/2008/08/qa-sears-cmo-ri.html

500 Posts!

PaymentGuy is happy to have reached 500 posts this morning! Thanks to all my readers for making this blog such a success! PaymentGuy appreciates each and every email you send.

ClickandBuy CTO's Resign

Just a note to let my readers know that

Rafael Otero Fandino, who quit as ClickandBuy's Vice President of Technology, also served as its interim CTO after ClickandBuy CTO Fabien Siegel quit http://paymentguy.blogspot.com/2008/04/clickandbuy-cto-fabien-siegel.html

Sulake Extends HABBO Payment Network to Philippines

Good news but long overdue on Sulake extending its prepaid card payment method reach in Southeast Asia. What is even more interesting but disappointing is how Sulake with its HABBO franchise has dropped the prepaid card opportunity in other markets like US, Canada, France and Spain by doing extremely odd things like promoting Premium SMS over this clearly superior payment method. Not to mention its failure to capitalize on its extensive prepaid payment network to commercialize IRC Galleria more fruitfully. PaymentGuy will be blogging more about that in the near future so stay tuned. Anyway, the story on the Philippines expansion http://blogs.inquirer.net/hackenslash/2008/08/14/singapore-based-distributor-to-launch-fresh-games-in-rp/; "Singapore-based video game distributor New Era Digital Interactive Media Inc. is refreshing its business in the Philippines in measured steps, as it prepares to introduce two online games in the coming weeks. The company is also preparing to launch two “huge titles” that will target gamers in Internet cafes, the company said. Allan Carbonell, newly appointed New Era Digital Interactive Media country manager, told hackenslash that the company will introduce the virtual social networking game Habbo, owned by Finnish firm Sulake Corporation, soon. The game, which plays like the first Philippine online game OZWorld, uses configurable avatars to represent account owners. Players can open their own pages called Habbo Homes and customize these with widgets, stickers and backgrounds. They can also form group pages where members can lounge. Just like any other social networking sites, Habbo has “virtual hotel rooms” where players can communicate with other avatars. Habbo is touted as one of the most popular social networking sites. It has over 100,000,000 registered users worldwide with 9.5 million unique visits per month. Most users are between 13 and 18 years of age. Carbonell said New Era will distribute and promote the game in the Philippines but the game will be hosted in Singapore. “By September we’re introducing prepaid cards for players of Habbo. These will be in denominations of P50 and P100. These will allow them to buy items and virtual furniture but the game itself will be free-to-play,” he said. Apart from Habbo, the company will also distribute boxed online game, called “Age of Conan: Hyborian Adventures,” which is similar to online game “Guild Wars” already distributed in the country. Carbonell said that the company is in the process of opening up an office in Ortigas Center, Pasig City.

Behind MasterCard’s soaring stock

Two of the best stocks in the universe this year have been MasterCard (MC) and Visa (V). MasterCard went public in May 2006 and has rocketed from its offering price, $39 a share, to $231. That’s a six-fold increase. Visa, which scored the biggest IPO in history last March, has seen its stock rise from $44 to $73. Ironic, isn’t it, that these two companies are sailing along when so many U.S. consumers are in credit hell? Meanwhile, the big banks are reeling from lending money to too many deadbeats. MasterCard and Visa make money by processing payments, not extending credit. And since millions of people around the world are replacing cash with credit cards, these companies’ profits are expanding dramatically, with minimal risk from the multiplying credit crises. On Tuesday I had lunch with some MasterCard folks at Michael’s in midtown Manhattan (and paid with my American Express (AXP) corporate card, sorry to say). We talked about the global migration from cash to credit — about Asian and Middle Eastern consumers snapping up elite MasterCards studded with diamonds and, more darkly, desperate debtors in Turkey and Korea committing suicide. (The New York Times ran a front-page story on Sunday about this.) We also talked about what may be the most exciting trend: mobile payments. MasterCard has experimented for years, largely abroad, with “contactless payments” via mobile phones. This year, MasterCard partnered with U.S. Bank and Nokia (NOK) for a pilot program in Spokane, Washington. If you live in New York, next year you’ll likely be able to stand in front of a movie theater, tap your cell phone on the poster of the movie you want to see, pay for your ticket, and even buy your popcorn.

Even as MasterCard’s stock has multiplied, there’s room for more gains, many analysts say. Morgan Stanley (MS) put a price target of $320 on the stock and forecasts double-digit organic revenue growth, operating margins in the 30-40% range, and net income gains of more than 20% annually over the next three years. Of course, as MasterCard and Visa clean up from consumers borrowing aggressively, there’s ever more risk for the banks who put up the money. Byron Wein, a Morgan Stanley alum who is now chief investment strategist at Pequot Capital Management, warned in a Morgan Stanley report last month: “There is too much credit card debt. Holders of credit cards should have to put up a deposit before they can use their cards, like the renter of an apartment puts up security. No credit card borrowing should be allowed. Naturally that would cut consumption way down, but that is what is needed.” Wise words, but as we know, sanity doesn’t drive businesses or markets either.
http://postcards.blogs.fortune.cnn.com/2008/08/13/behind-mastercards-six-fold-increase/