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To: noiserider who wrote (16527)10/11/2000 7:24:37 AM
From: noiserider
   of 20296
 
Good article about X.com from americanbanker.com. I didn't realize

- X.com is ditching their former strategy of becoming an online bank
- the will concentrate on on-line payments
- they partner with Wells Fargo to do ACH transactions which offers the possibility that they can lower their cost structure via DDA transactions to compete with CKFR.
- they get a 5 year exclusive on Quickbooks payments (more on this in my next message)

Noise


X.com Scraps Bank Strategy To Focus on PayPal System
Wednesday, October 11, 2000
By Megan J. Ptacek




Elon Musk is not yet 30 and already he has sold his first start-up for $300 million, founded another aimed at transforming financial services, and orchestrated a major redirection for the new company.

The 29-year-old is abandoning his plan to make X.com, which he founded 18 months ago, into a one-stop shop for financial services. Rather than offer a wide range of banking and related services, the Palo Alto, Calif., company will become a global payment system, he said.

The foundation of this plan is the PayPal person-to-person system, which has four million customers and is listed as a preferred payment provider for 50% of auctions on eBay.

"Our long-term goal is to process one trillion transactions," Mr. Musk said.

Originally, person-to-person payments were to be just one component of X.com's financial services plans, which also included offering banking accounts and selling mutual funds.

X.com still has an option to buy First Western National Bank of La Jara, Colo., Mr. Musk said. The purchase would give it access to Federal Deposit Insurance for its online accounts, but X.com will take a pass, he said.

The plan now is to hone its payments expertise, much of which it gained by acquiring PayPal.com two months after X.com's founding. It quickly multiplied PayPal accounts by working through online auctions and offering an incentive program in which it deposited $10 in the accounts of customers who referred friends to the service.

X.com also wants to become an international provider in business-to-business and consumer-to-business transactions. Rather than create its own financial products, it will partner with banks, insurers, and lenders, who will cross-sell their products to X.com customers.

"There is tremendous cross-selling capability in our system," Mr. Musk said.

To make a payment, customers simply e-mail money from their X.com account to another customer's account. The accounts are funded through deposits executed through the automated clearing house or by credit card payments.

X.com says tests show that its customers trust the system and would buy financial products from the X.com site. Mr. Musk conceded, however, that many banks are reluctant to work with his company because they see it as a threat.

"How much can one company do?" he asked. "The Citibanks, Bank of Americas, and Wells Fargos have little to worry about, and we will be happy to drive customers to their sites."

X.com has broken barriers with some banks. Barclays Bank plans to offer a money market account through X.com, Bank One expects to offer a MasterCard-branded debit card through it in six to eight weeks, and X.com has partnered with Wells Fargo to process ACH transfers.

X.com could be a threat to banks, said James Van Dyke, a senior analyst at Jupiter Communications, "but there is no reason why they couldn't have a cooperative start with banks." The advantages X.com brings are its customer base and marketing savvy; Mr. Musk "is a brilliant strategic marketer," he said.

Much of X.com's payment growth in recent months has come from business accounts. It adds about 4,000 such accounts daily and has just surpassed 300,000.

An agreement struck last week with Intuit Inc. should further boost X.com's business-account rolls. Under the five-year deal, it will become the exclusive Internet payment provider for users of Intuit's small-business products, including QuickBooks. Through Intuit, X.com will get access to three million small-business customers, or 80% of the market, Mr. Musk said.

He said succeeding in the small-business market is crucial, since X.com loses money on pure consumer-to-consumer payments, which are free. Businesses will pay a 1.9% per-transaction fee to receive X.com payments. The company, which expects to be profitable in 2002, also earns revenue from interest earned on money held in its accounts.

X.com plans a three-phase international expansion. In the first phase, which is expected to begin this fall, it will let non-U.S. customers open X.com accounts in the United States to send and receive U.S. dollar payments. In the second it will set up local-currency exchanges in the European Union countries, as well as Japan and South America, by yearend. Phase 3, slated to launch next year, will add instant multicurrency international transactions.

Mr. Musk's banking experience consists of a summer internship at a Canadian Bank and an undergraduate degree in finance from the Wharton School. He also has an undergraduate degree in physics from the University of Pennsylvania.

To fill in gaps in his knowledge of financial services, Mr. Musk, a native of South Africa, is seeking the help of seasoned financial services executives. He is also looking for a new chief executive officer; William Harris, the former chief executive of Intuit, joined X.com as CEO in December but left after six months.

"It just wasn't working," Mr. Musk said.

Mr. Musk does have experience launching a successful Internet company. He started Zip2.com, his first Web venture, in 1995 after dropping out of graduate school at Stanford, where he was pursuing a doctorate in energy physics. He sold the company to Compaq Computer Corp. last year for $300 million, and Zip2 is now the technology platform for the search engine Alta Vista.

Mr. Musk is now the largest shareholder of X.com, which has received $170 million of investments from companies including Sequoia Capital, Nokia Ventures LP, Goldman Sachs, Deutsche Bank Alex. Brown, Qualcomm Inc., Lab Morgan, Technology Associates Management Corp., Idealab Capital Partners, and Credit Agricole. The French bank contributed $30 million of that sum, earmarked to help X.com expand internationally.

Mr. Musk said he has invested more than $10 million of his own money in X.com.

X.com revamped its security policies and systems after some negative publicity and instances of fraud. In August, after 125 people used PayPal to purchase hard drives at an online auction but never received the merchandise, it implemented Cybersource Fraud Scan, which verifies that a prospective customer has a valid bank account.

Previously X.com issued a disclaimer relinquishing all responsibility for fraudulent purchases or goods that were not shipped. Now it offers a full refund on payments made by customers who have verified their bank accounts through Cybersource Fraud Scan.

"I don't think PayPal has suffered an unexpected and inordinate amount of fraud," Mr. Van Dyke said. "P-to-p will continue to grow and will be a force to be reckoned with by the banking industry."

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To: noiserider who wrote (16528)10/11/2000 7:35:41 AM
From: noiserider
   of 20296
 
Anyone out there use Quickbooks?

The american banker article says that X.com is "the exclusive Internet payment provider for users of Intuit's small-business products, including QuickBooks".

Does this mean that Quickbooks users don't have access to CKFR's payment services?

Noise

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To: noiserider who wrote (16529)10/11/2000 9:19:44 AM
From: AugustWest
   of 20296
 
Here, let's chew on this for a little bit...

CheckSpace, Inc. Storms Into ePayments Industry With $11 Million First Round
Venture Capital Backing

SEATTLE, Oct 11, 2000 /PRNewswire via COMTEX/ -- CheckSpace, Inc., the premier
ePayments service for small businesses, their vendors, and customers, today
announced the Company has secured $11 million in an oversubscribed Series A
round of funding. The funding is led by Voyager Capital, a leading Seattle
e-business venture firm. The Company also announced that its services are now
available nationwide at www.checkspace.com < checkspace.com >.

In only seven months, the Company has built a world class team, developed the
first version of the CheckSpace ePayments service, completed testing with over
two hundred customers, and raised its first round of funding.

Today, the Company emerges with a best-of-breed service and team led by Chief
Executive Officer and Co-Founder, Naseem Tuffaha, the former Director of Web
Services at Microsoft, and Co-Founder and Chief Technology Officer, Balsam
Saliba, the Co-Founder and former Chief Technology Officer of TransPoint, who
holds twelve issued and pending patents in e-commerce technology. Together they
assembled a team with extensive experience building electronic payment
solutions, enlisting industry and technology experts from Bank of America, First
Data Corporation, TransPoint and Microsoft and an advisory board with experience
at Visa, Netscape, Ariba, marchFIRST, First Data and Microsoft.

"The CheckSpace team found a glaring need and demonstrated tremendous speed and
market savvy in addressing it," said Erik Benson, a partner with Voyager
Capital, "Their experience developing world class online payment services for
Fortune 500 companies will be invaluable as CheckSpace brings the benefits of
ePayments to small businesses. That, combined with Voyager Capital's expertise
in business to business e-commerce, makes us confident CheckSpace will become
the leader in the ePayment industry."

CheckSpace capitalizes on the inefficiencies of paper-based invoice and payment
processes, the dramatic growth of small business Internet use, and the emergence
of small business-to-small business e-commerce opportunities to solve a problem
that small business owners experience on a daily basis: getting paid.

"Managing cash flow is one of the most important issues small business owners
face. The only thing more valuable to small businesses than time is money," said
Naseem Tuffaha. "Our goal is to bring the time and money-saving advantages of
ePayments to both brick-and-mortar and e-commerce small businesses. CheckSpace
enables small businesses to get paid faster and substantially reduce time spent
sending invoices and processing payments."

To deliver the highest level of security, CheckSpace uses proven encryption
technologies and stringent verification procedures to prevent fraudulent access
to members' bank accounts and protect the privacy of their information.
Additionally, each CheckSpace member is protected against fraudulent activity by
insurance from Lloyd's of London Cyber Liability Protection program.

Participating in the Voyager-led first round is Northwest Venture Associates,
Kellet Investment Corporation, and Staenberg Venture Partners. Also investing
are prominent angel investors with a history of identifying promising market
opportunities and helping to grow some of the highest valued Internet
businesses, including: Boris Putanec, Co-Founder, Vice President of Corporate
Strategy of Ariba, Inc.; K.B. Chandrasekhar, Founder of Exodus Communications,
currently Co-Founder, CEO, and Chairman of the Board of Jamcracker, Inc.; Sam
Jadallah, Managing Director, Internet Capital Group and former Vice President of
Sales and Marketing at Microsoft; Robert Pollan, Managing Director, Internet
Capital Group; and Scott Oki, former Senior Vice President of Sales and
Marketing at Microsoft.

About CheckSpace

CheckSpace is the premier ePayments service for small businesses, their vendors,
and customers. CheckSpace's secure payment service provides an alternative to
paper checks and enables electronic payments between any two parties with email
addresses and U.S. bank accounts. By streamlining the payment process and
increasing cash flow management efficiency, CheckSpace assists small businesses
in making educated financial decisions. Utilizing members' existing bank
accounts, CheckSpace offers free memberships, flat transaction fees, and
integration into major small business accounting software programs and
productivity applications, such as QuickBooks and Microsoft Office. CheckSpace
supplies an array of tools, such as the Quick View, that give small businesses
better information about their transactions and cash flow. For more information
about CheckSpace, or to view the service demonstration, please visit
www.checkspace.com < checkspace.com >.

About Voyager Capital

Voyager Capital is an e-business venture capital firm. With $265 million under
management, Voyager has invested in companies such as Avenue A, CapitalStream,
ClearCommerce and Q-Sent. Voyager's focus is on early stage investments with a
concentration on business-to-business e-commerce, Internet, and wireless
companies. Beyond capital, the firm's managing directors' extensive industry
experience in building businesses contributes substantial value to Voyager's
portfolio companies. The team brings to portfolio companies more than 55
combined years of venture capital, senior management and business development
experience in the information technology (IT) industry. Voyager is headquartered
in Seattle, Washington, with an office located in Palo Alto, California. For
more information, visit Voyager Capital's Web site at <
voyagercapital.com >.

SOURCE CheckSpace, Inc.


CONTACT: Daniel P. Mullen of Barokas Public Relations,
206-264-8220, or daniel@barokas.com, for CheckSpace, Inc.; or
Brian Riseland
of CheckSpace, Inc., 206-839-8621, or brianr@checkspace.com

URL: voyagercapital.com
checkspace.com
prnewswire.com

(C) 2000 PR Newswire. All rights reserved.

-0-


KEYWORD: Washington
California
INDUSTRY KEYWORD: MLM
FIN
SUBJECT CODE: FNC

*** end of story ***

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To: AugustWest who wrote (16530)10/11/2000 11:13:20 AM
From: AugustWest
   of 20296
 
Here's some food for thought.

Today is the third time we have hit 34 on this most recent down turn. The last two, it bounced off and closed the day considerably higher than 34.

What does today have in store?

FWIW, I'm still trying to hold to my 28 target for buying back in, but I have to admit, I'm getting itchy*

*I was also itchy all round the market yesterday afternoon, trying to catch falling knives....I didn't catch any<g>

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To: AugustWest who wrote (16531)10/11/2000 11:16:29 AM
From: zuma_rk
   of 20296
 
Anyone know the lyrics to "Nobody loves you when you're down and out...?"

This line keeps on circling in my brain --

If I get my hands on a dollar ag'in,
I'm gonna hold it, 'till that old eagle grins..."



sigh

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To: zuma_rk who wrote (16532)10/11/2000 11:19:14 AM
From: tktom
   of 20296
 
Oh boy, capitulation.... now the Dow caught it...

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To: AugustWest who wrote (16531)10/11/2000 11:26:42 AM
From: Bruce Prescott
   of 20296
 
Never thought I'd be able to buy Checkfree in the 20's again.

We just might get there if the Nasdaq continues its free fall.

It hard to know whether I should load up on OMKT or CYCH or SONE or CKFR when the market turns. CKFR seems to be the safest bet, but I might get more bang for my bucks with others.

Am I getting greedy?

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To: Bruce Prescott who wrote (16534)10/11/2000 12:04:48 PM
From: AugustWest
   of 20296
 
perhaps.

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To: Bruce Prescott who wrote (16534)10/11/2000 12:51:49 PM
From: Charlie Smith
   of 20296
 
...hard to know whether I should load up on OMKT or CYCH or SONE or CKFR...

Take a look at CORI; they're revenue growth is the healthiest of all the bank/FI system providers.

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To: Bruce Prescott who wrote (16534)10/11/2000 2:45:58 PM
From: peat
   of 20296
 
>>>Am I getting greedy?<<<

if not why are you in the market? CDs have been around for a long time.

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