![]() In their most recent quarterly earnings release, PayPal brought in $1.6 billion of the company's $3.9 billion in revenue. eBay's PayPal unit is a major source of revenue for the company and commands a massive amount of processing traffic. While the company has been clear to say they are not entering eBay's ( EBAY -2.12%)turf with this test run of the service, it isn't a stretch to think they might at some point in the future. And if the company decides they then want to join the payment processing business it has the potential to become a major source of revenue. As of June 30, the company reported 819 million mobile monthly active users, just convincing a fraction of them to use their payment system could be a big coup. Improving the efficacy of advertising with shopping data could have a tremendous effect on the company's revenues. ![]() As it stands, advertising revenue accounts for 88% of total revenue for the company, according to their most recent earnings release. The newest iteration, if successful, could significantly improve their ad service, giving the company precious insight into our buying habits. What difference can mobile payments make? Their ill-fated first attempt was shut down primarily because the namesake secondary currency complicated things. This isn't the first time Facebook has tried to get a slice of e-commerce, but this one is designed to ease mobile transactions unlike their previous Credits system. In a report from AllThingsD, the company confirmed that it was preparing to test a mobile payment service that allows purchases to be made with just a Facebook login. The past 30-days transactions data might have even been helpful in addressing inventory control issues, but it would give no clue at all as to what consumers really valued or what made.You can't accuse Facebook ( META -1.20%)of just resting on its laurels, the company just confirmed yet another new product, this time a mobile payment service. Never mind that the insights and findings they ended up with - and ultimately acted upon - were statistically reliable, perhaps even excellent answers to meaningless questions. Tons of statistics to slice and dice to their hearts' content. After all, what is a mere marketplace compared to billions of bits of research data? Kmart seems comforted - maybe "lulled" is a better word - by their trend data. But, astonishingly, the arrogance continues: Marketplace realities evidently don't matter much to these folks. The above episode happened some months before Kmart saw its stock plummet, before it was forced to circle the wagons into Chapter 11 protection mode. This is the brand of hubris that leads directly to serious - often lethal - difficulties so many companies are lately facing with increasing frequency. It was a measured and confident statement, the grand finale to a conference call that had already been awash with this kind of arrogance. Under other circumstances I might have thought that the statement was, at worst, wishful thinking in the face of declining market share, reduced profits, and increasingly skeptical looks from Wall Street. The quality of mercy is not strained, even in our business. Not because it's confidential it's just a professional courtesy in case that person's résumé is out on the street. That's a direct quote from a senior marketing research person at Kmart. ![]() Our K-trends tell us everything we need to about our customers and how to better serve them." "We maintain a database of eight million transactions a month. Editor's note: Robert Passikoff is founder and president of Brand Keys, Inc., a New York research firm.
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