Additionally, it said it is partnering with four software providers to gain access to 50,000 small- to medium-sized merchants.

Meanwhile, tomorrow will be exactly a year since Google launched its mobile wallet.

So, you ask, which large technology company is winning the race to gain the hearts and wallets of consumers and retailers?

Pretty clearly, it’s neither.

Google may have gotten off the blocks first, but ever since, it has been plagued by execution issues and management departures. In contrast, PayPal has a lot of institutional advantages, but it still has a long way to go before it is synonymous with Visa or MasterCard.

Here’s just a snapshot of the two companies’ advantages and disadvantages:

Google:

Pros: It has relationships with 25 national retailers, totaling 140,000 locations.

Cons: It bet too early on using near field communication technology. Sprint, the third-largest U.S. wireless carrier, is the only provider so far that is backing it and it’s deployed on only six Android devices.

PayPal:

Pros: There are 110 million people using PayPal worldwide, who are on track to spend a record $7 billion in mobile payments this year using PayPal on the phone.

Cons: The company is expecting to deploy with 20 retailers by year’s end, but based on the 16 retailers announced yesterday, I calculated that it has access to about 16,000 U.S. locations (far fewer than Google Wallet). That does not include the thousands of locations that those 50,000 small- to medium-sized retailers would contribute if they signed up for it.

Clearly, it is still early days.

And when you look at the broader market opportunity, the race is not just between Google and PayPal. All of the incumbents, including American Express, MasterCard and Visa, have announced digital wallet strategies. And then there are the start-ups, such as Square, which is seeking a $4 billion valuation in its next funding round.

There are two points to be made on the debate between PayPal vs. Google Wallet that can’t be stressed enough: PayPal has the user base, and it has the technology with the lowest barriers to entry.

In theory, if a consumer has signed up for the service from their PayPal account, they will be able to conduct a transaction using their mobile phone number and PIN – without changing carriers or phones. Likewise, merchants won’t have to upgrade their point-of-sale hardware.

In an interview, PayPal President David Marcus acknowledged there’s a chicken and egg problem: Without a lot of locations, there won’t be a lot of consumers using it. But this year is about learning and testing, he said, and next year, “it will be about iterating and full-on execution.”

If you asked the folks at Google, I’m sure they would agree. A Google spokesperson declined to comment for this story, but already, there are signs that Google has learned a lot and has started to pivot.

Rick Oglesby, a senior analyst with Aite Group, believes that Google is distancing itself from NFC and from being the merchant of record.

“I think they will follow the path of least resistance, because for them, it’s not about payments — it’s about advertising,” he said. “It’s about pay-for-performance marketing. Just like how they get paid for a click-through on the Web, they want to get paid when you walk through the door — but no one is monitoring that.”

Last month, Google purchased TxVia, a little-known payments technology company, another sign that it’s changing directions.

Tony Felice, a senior strategist for Red Door Interactive who has worked with TxVia in the past, said TxVia and Google Wallet together can be very powerful. He said TxVia has all the banking relationships, which will help enable payments, gift cards and other services, and also has the ability to produce analytics about what consumers are doing and spending money on.

“Together, they will be able to get a 360-degree picture from the moment of truth to purchase,” he said. “In order to do that, you have to pull in disparate sources and synthesize it in a single place. The transactional data from TxVia is just one piece of a puzzle.”

Oglesby said despite Google’s hiccups, it’s not yet out of the race.

“It’s been a slow-growing situation, and there’s been big turnover on the executive team, but they are reassessing the situation and have made an acquisition,” he said. “I wouldn’t say they’ve screwed up because no one has run way ahead of them. They were leading the market, and tried an approach, and now there’s other approaches for them to try.”

The e-commerce giant, which already had an enormous selection by any measurement, is calling this its “Add-on” program, where consumers will be able to add low-cost items to their baskets in order to qualify for free shipping — as long as they spend $25.

Many of the new products fall into the household goods, beauty or grocery categories, such as Guayusa Tea ($3.52); four ounces of chopped pecans ($3.42); or a 1.6-pound bag of Iams cat food ($4.72). The items are identified by a blue checkout box.

Previously, Amazon had said these products were not available on the site at all, or had to be purchased in bulk, making them a little impractical. After all, how many four-ounce bags of pecans does one family really need?

An Amazon spokesperson confirmed that the program launched about two weeks ago.

The addition of low-cost everyday items to Amazon’s site signals that the company has been able to figure out how to make the economics work for items that were previously deemed uneconomical, or that it is betting that the program will lead to incremental sales.

For instance, now customers will be able to use these low-cost items to fill out their baskets in order to qualify for the company’s free Super Saver Shipping program, which requires orders of $25 or more. Consumers were often faced with the dilemma of adding more items to their cart in order to hit the $25 minimum — often overspending to do so — or paying for shipping.

Now, they could order a $22 book and add a box of tea to qualify without going over, or they could just buy five “add-on” items for $5 each in order to get free shipping.

Amazon Prime members, who pay $79 a year for free two-day shipping on qualifying items, will also have to spend $25 in order to get these items, but they will get items shipped to them faster — or within two days.

Chart/data courtesy of Forrester Research

The deal marks the unraveling of one of the most celebrated tie-ups between Western and Chinese Internet companies, which gave a boost to Alibaba Chairman Jack Ma in the partnership’s early days but became strained in recent years.

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The company is the latest start-up to go after the content-sharing craze, fueled by Pinterest, which allows its members to “pin” images, videos and other objects to their pinboard.

In the same way, StyleSaint allows users to publish and share digital collages of clothing and apparel and to create “tear sheets,” using industry lingo. The collages are formed by pulling together photos and stories from around the Web.

What sets StyleStaint apart from Pinterest and other pure-play content-sharing sites is that this fall it will start designing and manufacturing its very own apparel brand based on the user-generated collections.

StyleSaint officially launched today at TechCrunch Disrupt in New York, but AllThingsD has the details on its funding round, which closed last year.

The company was founded by Allison Beal, who says she’s been obsessed with making “tear sheets” and “style books” since the age of 13. The other co-founders are CEO Brian Garrett, a veteran entrepreneur in the Los Angeles area, and Brian Weitman, who will be the company’s manufacturing partner and is the CEO of STC/QST and president of WTS Los Angeles, which produces Mary-Kate and Ashley Olsen’s runway collection among other clothing lines.

Since Pinterest hit it big, raising $100 million at a $1.5 billion valuation, other sites have conveniently been claiming that they are like Pinterest but with an e-commerce twist.

Pinterest doesn’t actually sell anything directly to consumers, but it is widely known for driving major traffic to e-commerce sites. Other sites like OpenSky are trying to create the same sense of community by selling items that are sourced and shared by celebrities and other experts who add an editorial and recommendation-driven component to the site.

Joining StyleSaint’s advisory board is Brian Lee, founder of ShoeDazzle; Kate Ciepluch, former creative director of Shopbop; Irene Au, Google’s head of global design; Jimmy Yaffe, co-CEO of Fuel M+C; Brett Brewer, co-founder of Intermix Media; and Soraya Darabi, co-founder of Foodspotting.

Here’s a glimpse into the company’s style via its promo video:

The move is aimed at helping its smaller operations, such as its mobile, search and e-commerce businesses, gain more independence, analysts said. Over the past year Tencent’s profit growth has slowed as it has sought to spend on a wide array of initiatives to solidify its holdings in areas such as mobile chat and online shopping.

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There’s no question that every venture capitalist within 100 miles of Silicon Valley wanted to squeeze their khaki-clad selves into what had become tech’s hottest deal of late.

That would be to get a piece of the new round of funding for start-up phenom Pinterest.

But while piles of VCs and other investors tried to work every angle possible to noodge into the action, the iconoclastic CEO and co-founder Ben Silbermann decided to go big and go global by hooking up with a Tokyo-based Internet giant.

Japan’s Rakuten will invest upwards of $50 million in a $100 million round that values the social bookmarking site at $1.5 billion.

Rakuten is one of the largest online commerce companies in the world, with a flagship site Rakuten Ichiba, among others. It was founded in 1997 and had revenue of $4.7 billion in 2011.

Most important in Pinterest’s calculation was apparently the link with its CEO Hiroshi Mikitani, whose nickname is Mickey. One the richest men in Japan, Mikitani is one of the best known entrepreneurs there where he’s been described as “Richard Branson meets Jeff Bezos.”

I briefly chatted with Mikitani last night about why he decided on the Pinterest deal, in a conversation where he focused a bit on Rakuten’s famed “omotenashi” or “empowerment” philosophy. Simply put, the concept is that — unlike an Amazon — Rakuten is a facilitator of commerce, much like its shopping mall metaphor beginnings. The approach is to aid merchants rather than compete with them.

It’s a little eBay, a little Alibaba, some Etsy and even a little Amazon Web Services mixed in. It’s also a place that can move retail globally, which is presumably the attraction to it by Pinterest.

ATD: Why did Pinterest pick you?

Mikitani: We are not a venture capitalist. We got together and talked about our story and our history.

We agreed that we shared a vision of the future of Internet e-commerce.

ATD: Why make an investment?

Mikitani: When we started to talk about being involved in the round of investment, we wanted to invest as much as possible.

We were very impressed by their business model and also the management style.

ATD: What made Pinterest so attractive in comparsion to other similar companies?

Everyone is talking about social commerce and best solution to social commerce, but Pinterest really was the first to use graphics that well to connect with people.

Rarely have we seen such a powerful media and we were seeing huge traffic coming from Pinterest [to Rakuten sites]. It was much higher than anyone else.

ATD: What do you bring to the table?

Mikitani: I think there are some things we think we can do with our expertise. Ben and his team have an extremely strong commitment to make their products as attractive as possible.

But we have 40,000 stores in Japan and we can give them access to our customers and do aggregation to engage in everything. And we have sites in many other countries too.

ATD: How are you going to work together?

Mikitani: We are not going to stop them from doing dealings with other e-commerce companies. But we can have more constructive input on how to make their site more effective from e-commerce point of view.

This is a long-term arrangement and we have a strong committment and attachment to this business. We truly understand their business and respect their management.

I have five predictions of how Facebook will be maturing in the first year after its IPO:

1. Search

Facebook has become home base for users in many ways. But when it comes to search, Facebook makes you take a bus transfer at Google every time you want to leave the house.

And that’s a shame, because Google starts each search from a place of knowing almost nothing about me. When I’m taking a vacation to Bali, I’m far less interested in Google’s generic recommendations of things to do than I am in recommendations from my friends who have been there.

Facebook already knows which of my friends have been to Bali, and which restaurants and attractions they liked the best. It can even differentiate between the friend I trust for restaurant recs and the friend who always finds the best surfing spots.

There is a clear battle between Google and Facebook. But it’s not over “search vs. discovery,” as it is often framed. Rather, it’s “transaction vs. relationship” — which is why Facebook has the potential to disrupt search as we know it.

Prediction: Facebook will launch a purely social search by the end of 2012 (before tackling the whole hog in 2013).

2. Advertising

Despite the company’s fierce ethos of consumer experience first, business concerns second, an IPO will inevitably put upward pressure on the latter. With the numbers published quarterly and the prices reset every day, Facebook will be forced to support that share price (if not for the sake of its shareholders, then at least for its employees!) by expanding its advertising revenues.

Facebook today brings in quarterly ad revenue of $872M — just a tiny fraction of Google’s $9B. But transactions are by nature pecuniary — and relationships are priceless. As a gatekeeper to nearly a billion consumer relationships, Facebook can roll out new advertising products that are far more valuable than AdWords.

The market for online brand advertising is already huge at $85B today. As soon as Facebook unlocks the potential of relationship-based advertising, the market will open up by tens of billions more.

Prediction: By Q2 2013, Facebook will have more than tripled ad revenues to $3B per quarter.

3. Open Graph

Occupy Facebook! Oh wait, we already do. Or does Facebook occupy us? Facebook currently occupies 1 in 7 minutes of all time spent online.

As the locus of consumer identity, attention and relationships, Facebook has the potential to be the one true platform that links together every destination on the web.

But it’s not there yet. Open Graph was a start, but it lacks a complete and actionable vision for how publishers can connect, access data and establish relationships. Publishers don’t want bits and pieces of data that they need to analyze themselves — they want a unified schema that bridges their audiences’ online worlds and real lives.

When I buy a chicken at Whole Foods using a Facebook app’s mobile grocery coupon, Facebook can match that incoming data point with the fact that I read Cooks Illustrated and that I’ve been on an Indian food kick lately (based on my restaurant check-ins). By the time that chicken is in my reusable bag and I’m hauling it out the door, there should be chicken curry recipe suggestions on my Facebook page.

Facebook has an opportunity to turn data from the long tail of Facebook apps into real inferences about you and me that publishers and other brands on the web can actually use.

Prediction: Facebook will completely redesign their analytics offering by Q2 2013 to provide not just data but real, integrated audience insights that will guide brands’ personalization efforts.

4. Commerce and Currency

Advertising won’t be the only revenue play Facebook makes in its first year as a public company.

Digital commerce (i.e. digital goods) already represents more than $16B in market size, and is projected to grow to $36B globally by 2014. E-commerce is another $680B on top of that. Both are currently conducted by arcane means: Visa card numbers and PayPal accounts.

Why have digital payments been so slow to evolve? Because even the most trusting of us only allow a few close associates access to our most private details. Who knows me the best? My bank, my lawyer, my mother and Facebook. In fact, no one owns my identity as well as Facebook these days (sorry, Mom!). Just because Facebook doesn’t have access to my wallet yet doesn’t mean it’s not going to happen.

A host of companies today (Google, Apple, Square) are trying to become your digital wallet, but Facebook holds a valuable advantage: it is already the locus of your relationships with third-party Web sites through Open Graph. While the logistics will certainly be no piece of cake, commerce is right up Facebook’s alley.

Prediction: By Q2 2013, Facebook will be presiding over $2B in transactions.

5. Timeline

There’s nothing more core to Facebook than its user experience, and Facebook has since its birth shown a consistent healthy dissatisfaction with it no matter what the status quo.

The current timeline experience is a nice try, but it’s not quite right. Timeline solved one problem — the indigestible frequency and quantity of updates at all levels of priority — while creating several more. New Problem #1: Timeline’s intuition about what’s important is too frequently just plain wrong. And while it gives us a great retrospective on people, it does a surprisingly poor job of helping us stay up to date with them. New Problem #2: Timeline depends heavily on Open Graph widgets to summarize our lives.

The latter is both ambitious and troubling. We admire great biographers for their ability to identify and communicate the essence of a person. It’s an insult say that a Nike Fuel score algorithm can capture the “real me” in the same way.

Timeline is a v1 product. It will take significant and deep tuning over many versions to reach its full potential.

This may seem like it’s just a UI update, but it’s not. Timeline is the clearinghouse for everything that happens on Facebook. Getting Timeline right is probably the single most valuable thing Facebook can do to grow its effectiveness with users — and its revenues.

Prediction: Facebook will release the first major redesign of Timeline by the first half of 2013.

Will the precocious kid that Facebook is today grow into a smart, savvy adult? A boatload of investors and J.P. Morgan certainly seem to think so. Over the long term, it will depend on Facebook’s ability to leave its youthful single-minded focus on users behind and execute consistently against two metrics: great user experience and revenues to match.

This is a guest post by Ben Elowitz (@elowitz). Elowitz is the co-founder and CEO of next-generation media company Wetpaint, and the author of the Digital Quarters blog about the future of digital media. Prior to Wetpaint, Elowitz co-founded Blue Nile (NILE).

Patterson’s departure was first reported by Betabeat and confirmed by a Jetsetter spokeswoman, who added that he was asked to step down because of staffing issues and low morale — not because of the company’s operations.

Clearly, there are signs of trouble in paradise: This time, pretty pictures of luxurious vacations in exotic locations like Turks & Caicos can’t cover up what’s really going on at the New York-based start-up. Prior to Patterson’s departure, a handful of executives left, including Jetsetter’s chief marketing officer, Barry Herstein; VP of merchandising and operations Heather Leisman; and former head of marketing Stephanie Dolgins, Betabeat reported.

Rob Deeming, who has been at Gilt for the past three years, and recently was in charge of opening Jetsetter’s U.K. office, will become acting general manager.

Betabeat, which interviewed Gilt’s CEO Kevin Ryan about the executive shake-up, also reported that the travel division has faced other problems with getting its international operations up and running, and that it was burning a ton of cash. However, the company claims that Jetsetter is on track to record $100 million in gross bookings this year, and to be profitable next year.

This is not the first internal shake-up at Gilt Groupe, which earlier this year trimmed roughly 10 percent of its employees, including some of its management team. At the time, Ryan downplayed the situation by saying that the cuts were designed to get the company to cash-flow positive by the second quarter, and profitable by the fourth quarter. But other reports painted a fairly grim picture of the situation.

Prior to Jetsetter, Patterson was part of the founding team at Kayak, where he was VP of marketing.

The global payments provider is making the announcement tonight at a special event tied to CTIA, the wireless industry’s annual conference in New Orleans.

MasterCard is the latest — but probably not the last — to unveil its plans for the future of credit card transactions.

To date, a host of other competitors, spanning Visa, American Express, PayPal, Google and the U.S. wireless carriers, have also made announcements.

While all of the payment companies are approaching the digital wallet space with a slightly different product, from the consumer’s perspective they all end up looking somewhat the same — like PayPal.

In the case of MasterCard, PayPass Wallet will allow consumers to buy things online without having to memorize a 16-digit card number or in person by tapping a payment terminal with their phone. The solution is similar to Visa’s V.me digital wallet and American Express’s Serve-branded wallet.

For example, when checking out online with retailers that support PayPass, consumers can choose to enter a username and password to access their wallet. The PayPass Wallet will support multiple accounts, including competing payment providers.

“We spent a lot of time on the underlying technology,” said Ed McLaughlin, MasterCard’s chief emerging payments officer, in an interview. “It is designed for our partners to make sure consumers have a great experience online or in-store on your app. The ability to use any device you have and any account you’d want to invoke is a different approach to the closed-loop accounts.”

MasterCard will allow consumers to sign up for the wallet on its site, but it is primarily relying on banks to get users interested. This summer, it will be going live with the help of a dozen or so banks worldwide, including Citibank. Other major merchants are committing to adding PayPass to their online checkout systems, including American Airlines, Barnes & Noble and Newegg.

Mark Hung, a research director at Gartner, said it’s natural for MasterCard, American Express and Visa to move from the physical world of payments to online because consumers are already entering their credit card number online to check out. “They would like to see the same user experience, whether they are transacting online or offline,” he said.

With banks and retailers on board, Rick Oglesby, a senior analyst with Aite Group, said the focus for MasterCard will have to be on getting consumers interested in signing up.

“There’s definitely going to be some risk of consumer confusion,” Oglesby said, given the dozen of digital wallet options. “They are going to have to invest quite a lot in branding. … Even though the traditional payment companies are entering the space, the brands are relatively unknown. There will be confusion for consumers and merchants alike, and therefore, will require a signficant investment in terms of investing in new brands.”

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But in a new survey conducted during the first quarter, Nielsen discovered that the two devices are not being used for the same kinds of shopping-related activities.

For instance, U.S. consumers are most likely to use their smartphone to find a store and check prices, whereas tablet owners are more likely to do PC-type activities, such as researching products and reading product reviews.

Owners of both devices report frequently making purchases, including 42 percent of tablet owners and 29 percent of smartphone owners.

Last Christmas, the mobile shopping category first started to get retailers’ attention in a big way, leading to new vernacular such as “m-commerce,” or more fun things, like “couch commerce,” which conjures up images of consumers shopping while sitting in front of the TV.

Most retailers, like Amazon, haven’t started breaking out the mobile contribution, but eBay is forecasting that purchases made from apps or the browser on a phone or tablet will hit $8 billion in mobile gross merchandise volume this year, up 60 percent from $5 billion in 2011.

All day today, the top 120 execs at Yahoo are meeting at an offsite at the Marriott in San Jose, Calif., the first such gathering of the new world order at the Silicon Valley Internet giant in the wake of 2,000 layoffs last month.

It’ll be the first time that new CEO Scott Thompson starts to more specifically explain his vision of how he’s going to drag Yahoo out of its perpetual turnaround and into a brighter future.

The main message: Focus on where Yahoo is winning and dumping everything else — and actually doing it this time.

(For those just tuning in, previous Yahoo management has talked this talk before and, well, not walked this walk very much at all.)

Thompson thinks he’s the clean-up guy, though. And, since the layoffs, he has been one busy dude, flying to and fro, working on a variety of things.

That includes everything from figuring out how to sell a part of Yahoo’s lucrative Asian assets to working on the company’s fraught search advertising partnership with Microsoft, to chatting with Google about a new one, to planning more patent attacks against Facebook and others, to — perhaps most important of all — deciding what needs to stay and what needs to go in terms of products and properties at the company.

In Yahoo’s recent earnings call, Thompson noted that he would be “consolidating technology platforms and shutting down or transitioning roughly 50 properties that don’t contribute meaningfully to engagement or revenue.”

What precisely he was talking about has been the buzz inside the company since, because Yahoo has collected a lot of stuff over the years that is has shoved into its corporate closet and forgotten about, but that keeps on chugging away with little promise.

Ever heard of Korea Kids? It’s a site in Asia that attracts decent traffic and millions of dollars in revenue, but which many sources said costs much more to operate. Or another site called Sex Tips in the U.K. or Moments on Motherhood on its U.S. Shine women’s site.

There are lots of micro-sites like this all over Yahoo, which have been created over the years for a variety of reasons that seemed sensible at the time. In addition, there is much more — from scads of useless mobile apps to much bigger but troubled projects such as Connected TV and Livestand — all of which suck up staff, resources, attention, ad impressions and more.

It’s like a never-ending episode of “Hoarders,” but grosser in many way for Yahoo shareholders.

So, presumably, if you are not in the top three in any category, that means a spring cleaning all over the company to either toss these properties out or move them to one of Yahoo’s big publishing platforms, such as sports, finance or news.

This is not an easy task, as you might imagine, since each and every property on the potential chopping block has staunch defenders inside the company and ferreting them out and killing them is, as one person inside Yahoo noted, “like hunting gophers in the dark.”

The benefit to doing so? Cost savings, focus on many fewer things that Yahoo does best and a deployment of talent to where it will pay off.

That’s the idea anyway, but it is more complex than that, since simply having massive properties to sell to advertisers is not the game anymore, as both Google and Facebook sell a range of other attributes to advertisers from better engagement to direct sales conversions to social hooks.

Thus, it’s not simply enough to kill properties — Yahoo has to transform the ones it keeps, too, to meet a vastly different consumer mentality.

That is one of the main reasons that Thompson is also stressing new business arenas, most especially commerce, an area he knows well as the former president of eBay’s PayPal unit. Thompson has told his staff that by 2014, one-third of Yahoo’s revenues should come from e-commerce.

Besides hiring away some of his staff from PayPal, sources said he has also been eying payments technology to buy and even leveraging current Yahoo properties to grow the nascent business.

Recently, for example, he has been pushing an effort to get the accidental visitors to Yahoo’s still powerful home page — those that sign in an out of its email, for example — to engage in an e-commerce transaction.

Whether moves like this will work is still an open question, but I guess you have to start cleaning up the mess somewhere.

A new report by digital marketing agency iProspect finds that millions of affluent men are using the Internet for research and shopping — and spending a boatload of money.

It has long been assumed that women are the dominant shoppers online, and that if you were to start a company, it should be aimed at the female wallet. Well, here’s some testosterone to shoot down that argument.

IProspect identified a population of 19 million men over the age of 18 who make at least $100,000 and are frequently shopping online.

More of the report’s findings:

• 40 percent of respondents are shopping online at least twice a week, and those who are shopping multiple times are spending in excess of $30,000 annually.
• Luxury menswear in particular is benefiting, and is growing at a rate of about 14 percent every year.
• 70 percent of men in this demographic research and buy online, as opposed to researching online and then purchasing in the store.

To put the market into perspective, here’s a pretty — albeit manly — infographic from iProspect:

Higher incomes, an expanding pool of Internet users and the rise of smartphones mean online retail in China is booming. In 2011, the number of Internet users rose 12 percent to 513 million. E-commerce transaction value jumped 55 percent to 806 billion yuan ($127 billion), according to data from Analysys.

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The El Segundo, Calif.-based online retailer, which sells purses, shoes and other accessories to members for a $39.95 a month subscription, said it has six million members and is adding about 500,000 more each month.

In an interview, CEO Adam Goldenberg also confirmed that JustFab is on track to hit $100 million in revenue this year, up from $25 million in 2010.

Its growth is being fueled by new members and international expansion, including launching in Canada and Germany.

The company, which raised $33 million in capital last September, also said it was opening up its membership club to a pay-as-you-go option that allows non-members to buy products at slightly higher prices without the monthly commitment. Otherwise, members must visit the site within the first five days of the month to either buy an item or say they want to skip a month.

JustFab, which has 320 employees, is not the only subscription company that has recently tweaked its business model. Last month, ShoeDazzle said its 10 million members will be charged only if and when they make a purchase — no matter if it is once a month or once every six months.

Goldenberg said the changes by two of the leading membership services are coincidental, and not a sign that the membership model isn’t working. In fact, he says, the business opportunity in front of the company, and other membership services like it, is huge.

“We are the largest or one of the largest in the space, but we are all really small. If you look at apparel, this opportunity is bigger than $100 billion. We’ll take market share from traditional retailers and others will, too,” Goldenberg said. “It’s going to be a big category in three to four years.”

The e-commerce site uses 3-D to allow shoppers to virtually try on glasses before they decide to buy them.

To do so, visitors must record a short video of themselves to create a 3-D image, which they call a Ditto.

The image is a little spooky as your head swivels right and left to see how the glasses look on your face and wrap behind both ears. But it does do a good job of deciphering whether a pair of Vera Wangs or Ray-Bans would look better on your face.

The company plans to use the capital to develop its technology and add to its team.

Ditto Secures $3M Round for Designer Eyewear eCommerce Site

Site lunches with 3D virtual fitting technology to transform the way we shop, try-on, and buy opticals and sunglasses

Mountain View, CA – April 26, 2012 — DITTO, an eCommerce site for designer eyewear that uses patent-pending 3D virtual fitting technology, today announced that it has closed $3 million in financing led by August Capital. Angel investors, friends and family also participated in the round.

DITTO is a website that allows consumers to record a short video with their webcam to create a 3D virtual self, or “DITTO”. Users can virtually try-on eyewear in 180-degree views to see how a particular style looks and fits their face before they make a purchase. DITTO.com also integrates social media features, allowing the user to post side-by-side snapshots of their DITTO in different glasses to Facebook to poll friends for opinions.

The site offers an extensive selection of designer frames, with more styles and sizes than most retail and optical stores. The curated brand selection on the site includes Persol, Chloe, Ray-Ban, Tag Heuer, Vera Wang and others. Frames are sold at suggested retail prices ranging from $110 to $1,800 and high-quality anti-reflective coated prescription lenses are included at no cost on optical glasses. These exact lenses often cost more than $150 at retail locations. Customers receive their new glasses within 10 days with free shipping, free 90-day returns and first-class customer service.

“Great eyewear changes your mood and your persona,” says Kate Endress, cofounder and CEO of DITTO. “Yet buying them at stores leaves you with limited selection and, to date, buying online hasn’t been a viable option because of one big question: Do they fit? We couldn’t be more excited to launch DITTO.com, which we believe will take online shopping for eyewear to the next level. Through partnerships with some of the world’s best brands, our proprietary technology and phenomenal customer service, we are going to make buying glasses as much fun as wearing them.” I love this last quote you say about ‘buying glasses as much fun’

“Ecommerce has dramatically evolved across multiple categories including fashion and accessories, yet eyewear remains extremely challenging to market and sell online. DITTO’s innovative technology eliminates the hassles and impediments associated with buying eyewear online as well as in-stores by giving consumers the ability to not just see how they look and fit, but also ask a trusted source to help select which frames to buy,” explained Howard Hartenbaum, general partner at August Capital and founding investor in Skype. “We are thrilled with the investment and believe DITTO has the right model, technology and team to build a great company.”

Hartenbaum is joining the company’s board. DITTO plans to use the new funds to further develop its technology, add to its team, and market to customers.

Investors participating in the round include GGV Capital and Greylock Partners. The Mountain View, Calif., company said it will use the money to expand and hire additional employees.

Business models like Citrus Lane’s are getting pretty popular. Members sign up for a monthly subscription and get a package of products in the mail based on a particular theme.

My colleague Lauren Goode recently wrote about how Birchbox.com was branching out from sending beauty products to women to sending grooming products and consumer-tech gadgets for men. And, there are plenty of apparel companies that are also trying out the model, including Shoedazzle.

Citrus Lane’s box costs $25 a month, and offers two different versions — one for pregnant women and another for young children and parents. Contents include four to five items based on the child’s age — newborn to three years old — and include toys, snacks and other activities.

Citrus Lane Announces $5.1 Million Series A Funding from GGV Capital and Greylock Partners

Helps Parents Discover ‘Best Of’ Products For Little Ones

Mountain View, CA (April 25, 2012) – Citrus Lane (www.citruslane.com), a subscription e-commerce site that is focused on getting useful, developmentally appropriate and delightful products to young families, today announced that it has raised $5.1 million in Series A funding from GGV Capital and Greylock Partners. The company will use the funds to continue to expand its business and add critical new hires.

Each month, Citrus Lane members receive a care package of four to five “best of” products based on their child’s age for $25 per month. Citrus Lane curates its recommendations from partner brands such as Green Toys, Weleda, Zoli and Episencial.

All products are vetted by real moms. Citrus Lane also provides members with monthly editorial tips and insights and an active, vocal Facebook community of moms.

Founders Mauria Finley and Claire Hough are former executives of companies such as eBay, PayPal and NexTag that defined the first generation of Internet commerce companies. Citrus Lane combines a new generation of ecommerce with a social experience to provide a vibrant online community as well as a distribution platform for its partner brands.

“We’re building a company that helps moms – and dads – discover the best products for their babies and toddlers with the help of a trusted resource,” said Mauria Finley, founder and CEO of Citrus Lane. “We’re thrilled to have the support of Greylock and GGV Capital – they understood our business from the start and will be important partners as Citrus Lane continues to grow.”

Citrus Lane raised a seed round of financing in March 2011 and shipped its first boxes in July 2011.

“Citrus Lane is all about customer engagement. Build-and-grow models like Citrus Lane that focus on great service and consistent, long-term
word-of-mouth growth create the best opportunity for sustained growth,” said Jeff Richards, Partner, GGV Capital and new Citrus Lane board member. “We’re excited to be working with the company and look forward to working with them as they become the leader in subscription commerce.”

Starting today, Decide.com will choose 10 deals that it is so sure about that if its prediction proves wrong and the price drops within two weeks of purchase, Decide will automatically alert the buyer and pay them the amount of the price drop (up to $200).

The new feature is being launched today by the Seattle company, which is the brainchild of the folks behind Farecast.com. Like Decide.com, Farecast predicted whether it was the right time to buy an airline ticket. Farecast is now part of Microsoft’s Bing. Unfortunately, Farecast never had a guarantee.

In a statement, Mike Fridgen, president and CEO of Decide, said: “We want to show our users this isn’t just lip service — we’re actually willing to put our money behind our data-driven recommendations.”

The guarantee will be applied to 10 designated deals on the site every day, from consumer electronics to refrigerators and videogames.

Today’s deals include an HP 14-inch laptop for $500, representing a 23 percent savings; a 55-inch HDTV from LG that costs $1,199, representing a savings of 37 percent; and the Haier 1.7 cubic-foot refrigerator for $80, representing a 20 percent savings.

If any of those products become cheaper over the next two weeks, a buyer needs only to submit a photo of themselves with the product, and then Decide will send the money via PayPal or check.

While it sounds generous, the program probably pencils out financially, too. Of course, Decide hopes that its predictions are correct, but if they aren’t, the company has some buffer, because it earns a commission on the sales it generates.

To be clear, the company is not partnering with the retailer on these deals, but it does earn a referal fee or commission from the retailer if it generates a sale. Some of those rates are hefty; Amazon, for example, pays 4 percent on electronics product referrals.

Since launching last June, Decide says it has served up more than seven million recommendations, which have resulted in an average savings of $87 per product.

During the quarter, the company’s PayPal division rolled out in-store checkout at 2,000 Home Depots and PayPal Here, a new service for merchants that allows them to swipe credit cards using a mobile phone.

PayPal Here is competing against Square, which I reported today is seeking funding at a $4 billion valuation.

Because these offerings are so new, eBay does not currently include any potential revenue in its forecast. It may continue to say today that it is too early to tell what impact, if any, is happening on the business.

“We believe new product launches (in-store check out, Mobile offerings, PayPal Here) could present some wildcard upside to 2012 guidance,” said Citi analyst Mark Mahaney in a note to investors.

Analysts, on average, expect eBay to report earnings of 52 cents per share on revenue of $3.15 billion, according to a poll by FactSet.

Those results are on the high side of eBay’s own forecast, which is estimating revenue in the range of $3.05 million to $3.15 million, with earnings per share of 50 cents to 51 cents, not including some expenses.

Analysts will also be looking to see how the transformation of its core marketplaces business is going, and how well its acquisition of GSI business is progressing. Going forward, the company wants to leverage its expertise in both e-commerce and payments to provide tools to third-party retailers that helps them fend off competitors, like Amazon.com.

The company, which will release earnings after the bell, is trading down six cents at $36.03 a share. The stock recently hit a 52-week high of $38.18.

In a report released today, eMarketer estimates that 16 million Americans will book travel from their mobile devices this year, increasing 33 percent from 12 million in 2011. Even more people — roughly 37.8 million — will use their phones to research travel this year.

It’s no wonder that big online travel agencies, like Priceline and Expedia, are quickly expanding into mobile. One common mobile strategy is to build an app that gives deep discounts to people who book a hotel room from their phone for the same night.

Travelers who may not have access to a computer are an obvious market for hotel information, flights, maps, reviews and other services.

EMarketer said despite mobile’s rapid growth, total spending on online travel is growing more slowly than overall online retail sales. This year, online travel spending is set to increase 11 percent to $120 billion in the U.S.

But clearly all the trends spell bad news for travel agents and physical travel agencies. EMarketer expects a majority of Internet users to research and book via the Web.

Threadflip is a new marketplace coming out of private beta today that is making it insanely easy to sell used clothes, shoes, jewelry and other accessories online.

The secret to the San Francisco company is that it handles all of the hard work for you.

For example, once an item sells, Threadflip figures out the shipping costs, finds the correct box, and sends it to your door. Its “White Glove Service” goes one step further. For those willing to send their items to Threadflip, the company takes care of the rest by photographing, listing, pricing and ultimately shipping the item if it sells.

Threadflip is also announcing today that it has raised $1.6 million in a seed round led by First Round Capital and Baseline Ventures. Other participants include Dave Morin from Slow Ventures, Forerunner Ventures, Greylock Discovery Fund and Andreessen Horowitz Seed Fund.

The site takes a 15 percent cut of the transaction, which includes the box and shipping costs. Threadflip’s White Glove Service is still in a limited pilot, and is experimenting with a tiered model that ranges between 40 percent and 50 percent.

So far, the site has attracted higher-end items, with an average sale price of $50 to $60. That means more Prada and less Old Navy (although there’s some of that, too).

Manik Singh, founder and CEO of Threadflip, argues that other solutions for selling used clothes online, like eBay, require some technical expertise and a lot of time. This one was designed with his wife in mind, who never bothered to resell an expensive pair of boots, even though she never wore them.

“You never have to leave the house,” Singh said. “When we launched [in beta], women loved it, because it eliminated two barriers: ease of uploading and shipping. We remove both of those barriers.”

While in beta, Singh said, a third of users visited the site every day to share an item, “like” an item, or buy something. The women who have gravitated to the site the most are between the ages of 22 and 35; they enjoy blogging and writing about fashion, including taking photos of all of their outfits and posting them on Facebook.

That behavior drove Threadflip to create a feature that allows women to post photos directly from their Facebook accounts. “They might take a photo of a dress and post it on Facebook, and then in six months, when the dress is out of style, you don’t want to take a new photo. It’s a heavily used feature,” Singh said.

Because the sellers are often amateur fashion bloggers or other like-minded people, the pages often look like a magazine, featuring images of models wearing the clothes, rather than a snapshot of a pair of pants laid out on a kitchen table.

And now it appears the e-commerce giant has even more plans in the works.

A Wells Fargo Equity Research note distributed this week writes: “A key discovery this month is that Amazon has plans to expand the Prime membership benefits beyond the Amazon.com platform.”

The note points to a number of job descriptions, disclosing that Amazon is creating a “Prime Expansion” team, tasked with driving awareness of the Prime program and expanding the scope of its benefits, geographically and on and off Amazon.

So what areas or new benefits might Amazon be expanding into?

It’s not clear, and an Amazon spokesperson did not return emails seeking comment.

But first, let’s throw out the areas where Amazon won’t be expanding to — other online retailers. Today, Amazon sells pretty much everything under the sun, so it would be very hard for it to find a retailer that would be comfortable with letting Amazon run its loyalty program, even if it does mean offering perks like free shipping.

“I think any retailer would have to have their head examined if they allowed themselves to be a customer-acquisition tool for Amazon Prime,” said Mike Golden, president of ShopRunner. “Especially if it’s under the assumption that Amazon won’t compete with them. Because people have been proven false every single time.”

Of course, Golden has his biases.

ShopRunner, which includes eBay as an investor, operates a service — much like Prime — that offers shoppers free two-day shipping across a variety of retailers, including Toys “R” Us and PetSmart, for $79 a year.

But even if other retailers are out of the question, there are still some opportunities Amazon could be pursuing. For instance, it could work with other delivery services that don’t compete with Amazon.

ShopRunner has already demonstrated this through a partnership with Domino’s Pizza, which provides free delivery to ShopRunner members. Other scenarios with national scale could include Ticketmaster or Fandango, which have service fees at checkout.

Another internal program that Amazon is working on that could be a candidate for Prime is free access to Amazon Locker, which allows consumers to pick up packages from secure mailboxes at 7-Eleven. The lockers address a segment of the market that can’t receive packages at their homes because people work during the day and there’s nowhere for a delivery to be dropped off, or because it’s likely to get stolen.

So far, Amazon Prime is considered a very successful program that increases loyalty to Amazon.com — for an annual fee. As is typical with Amazon, it does not disclose how many Prime members it has, but Baird Equity Research estimates that there’s somewhere between seven million and 11 million members.

With even more benefits, it will make Prime — and Amazon overall — even harder for consumers to walk away from.

(Image courtesy of www.cicadamania.com)

Unlike other stores that flinch when consumers pull out their phones, fearing that they are scanning bar codes to compare prices, the beauty supply company is embracing the practice.

“The reality is there’s not a lot of price differentiation in our world, and most of our users are loyalty card holders, so it doesn’t worry us,” said Julie Bornstein, SVP of Sephora Direct. “It makes the experience better if you like to shop that way.”

The Sephora app allows consumers to track what products they’ve purchased in the past, find out how many reward points they have, and look up the ingredients of a particular soap, lotion or eye shadow. So far, the app has been downloaded two million times, and the retailer says that shopping from mobile devices grew by 300 percent last year.

Besides, how could Sephora fear mobile, when all 304 stores have iPods and 20 stores have iPads?

Increasingly, retailers are rolling out mobile devices in their stores, especially iDevices, to empower workers to know more about products or even shorten the checkout lines.

Bornstein says Sephora employees walk the store floors with souped-up iPods that have a credit card scanner, so they can ring up a customer after helping him or her find a particular product. The employees also carry around mini-printers, in case the customer wants a paper receipt. But the iPads are not used for checking out; rather, they are a way for customers to access more information about a product, including different kinds of looks that can be created with makeup.

Bornstein says the intention is not to replace the cash register with a mobile device. “We haven’t made any decisions to walk away from registers in stores,” she said. “It’s nice to have a hub.”

As part of the company’s digital makeover, it also has fully integrated with Pinterest, so that users can “pin” any of the 14,000 products on Sephora.com to the bulletin-board service. Bornstein said that of the Web site’s social media traffic drivers, Pinterest is already second only to Facebook.