Cashing Out: Week of September 4th – 10th 2011 in Online Marketing News

Amazon given temporary reprieve from California affiliate tax

ReveNews reported last week on Amazon’s negotiations with California legislators regarding the state’s affiliate nexus tax law.

Now, as the Los Angeles Times reported September 8, state law-makers and Amazon have reached an agreement that could give Amazon and other online retailers a one-year reprieve from collecting sales taxes in California.

The hope is that, during that time, congress will be able to formulate new federal sales tax legislation that would overwrite state-wide affiliate tax laws.

Prior to negotiations, Amazon had planned a referendum which would put the state legislation to a vote. But, as TechFlash reported, in return for the temporary reprieve, “Amazon has agreed to drop its multi-million-dollar campaign to overturn California’s e-commerce sales tax law.”

The agreement is subject to the approval of Governor Jerry Brown, though the Governor has not yet given word as to whether he will support the deal or not. Assemblyman Charles Calderon, who participated in the negotiations, remains optimistic about getting Governor Brown’s approval:

“Our hope and our guess is that he will support this. It will do away with litigation that has serious implications for the state,” he told the Los Angeles Times.

However, there are reasons to doubt that the governor will champion the agreement. As the Los Angeles Times reported, Brown seems concerned about the potential loss of state revenue that would accompany overturning the tax:

“I’m concerned about anything that would reduce revenues going forward because we’re in a very uncertain economy.”

Ebates acquires FatWallet and AnyCoupons

Cash back shopping site Ebates had more than one piece of good news to announce September 9.

In a press release, Ebates publicized the acquisition of both, a shopping and rewards site, and coupon shopping site, though all three sites will continue independently of one another.

And, as though two new acquisitions weren’t enough, Ebates has also announced the creation of a new company, Performance Marketing Brands (PMB) Inc. Under the common ownership of PMB, Ebates, FatWallet and AnyCoupons will be part of what the press release says will be “one of the largest independent shopping rewards companies.”

FatWallet founder and strategic advisor to PMB Tim Storm says the consolidation of several sites under the PMB banner will simplify rewards shopping for the user:

“Today shoppers are bombarded with an overwhelming number of coupons, codes, deals and sales […] With, FatWallet and we will help consumers cut through the clutter to get the very best offer every time they shop.”

Both the new acquisitions, as well as the creation of PMB were funded by August Capital, Cannan Partners, Foundation Capital and Silicon Valley Bank, though the deal’s terms have not been disclosed.

Groupon biding its time, delays IPO

There’s been a good deal of anticipation for a Groupon IPO. The group buying company had even scheduled an investor roadshow for next week, leading up to a public offering.

However, as the Wall Street Journal (WSJ) reported September 7, those plans are now on hold. Groupon has cancelled their IPO roadshow, which they had hoped would attract investors. And though they haven’t quite cancelled their plans for the IPO itself, the company is apparently “reassessing its timing on a week by week basis,” the WSJ says.

The official reason Groupn is giving is that the market right now is “too volatile.” As the WSJ pointed out, the recent IPO rush from companies like LinkedIn, Zillow and Zynga have led investors to “question whether companies like Zynga and Groupon can go public in such a choppy environment.”

But that’s just one possible explanation for Groupon’s reluctance to jump into an IPO right away.

A leaked internal memo from Groupon CEO Andrew Mason has led to SEC scrutiny. The problem is that the memo made public statements about the company’s financial status, which is prohibited by the SEC during an IPO process.

Though that doesn’t necessarily mean Groupon couldn’t go ahead with their IPO right now if they wanted to, the criticism that is bound to come of breaking the SEC’s rules would naturally detract from Groupon’s attempt to attract investors during a roadshow. As quoted by the WSJ, Jeffrey Sica, President of Sica Wealth Management LLC, outlined Mason’s conundrum as follows:

“If he does go on the road now and begin to spend the entire roadshow defending himself and defending what he did in sending this email to thousands of employees, that takes away from what I want to hear about the roadshow.”

Twitter swells to 100 million users

In a September 8 press meeting that AdAge likened to “a barrage of data,” Twitter CEO Dick Costolo told the media that Twitter’s user base is growing.

Among the most interesting stats Costolo shared at the meeting are the fact that the micro-blogging platform is now seeing 400 million unique visitor a month (up 70 percent since January), and that it now boasts 100 million active users monthly. But, according to Costolo, not all of those users are tweeting. He said that 40 percent of them either haven’t tweeted in the last month, though half of those active users do log in daily.

The number of tweets themselves is on the rise too, Costolo said, up 110 percent since the beginning of the year. He estimates about 230 million tweets are now being sent on a daily basis.

Costolo further added that he expects to attract 26 million new active users in the next four months. That’s as many new users as Twitter added during all of 2006, 2007, 2008 and 2009, combined.

Sprint files suit to block merger between AT&T and T-Mobile

Last week, ReveNews reported that the Department of Justice (DOJ) has filed an antitrust suit with the aim of blocking a merger between AT&T and T-Mobile, claiming such a deal would hurt competition, lower quality and raise prices for consumers.

And competitor Sprint has followed up with its own suit September 6. In a statement, Sprint’s VP of Litigation Susan Z. Haller echoed the DOJ’s complaints:

“With today’s legal action, we are continuing that advocacy on behalf of consumers and competition, and expect to contribute our expertise and resources in proving that the proposed transaction is illegal.”

And the suit itself even likens the near monopoly that could result from a union between T-Mobile and AT&T to that of Ma Bell, which existed until the mid 1980s.

And though Sprint’s argument decidedly has merit, it would be difficult to call their suit altruistic. Sprint is currently the U.S.’s third largest wireless carrier, while AT&T is the second and T-Mobile is the fourth.

Tumblr up to 10 billion posts

Tumbler reached an important milestone this week, announcing September 9 that, in the past year, they’ve gone from 1 billion posts to 10 billion. The blog and social networking service marked the occasion by sprinkling its users’ dashboards with colorful confetti.

And, according to TechCrunch, Tumblr’s traffic is also on the rise. Whereas, in July 2010, Tumblr was only getting roughly 1.5 billion monthly pageviews, now they’re seeing 13 billion. Individual blog posts are increasing too, from 4.5 million a day last July to 36 million a day now.

As Mashable points out, all this growth “could not have come at a more opportune time; the company is rumored to be in the midst of raising a substantial funding round that could value it at $800 million.”

About Emily Wilkinson

Emily Wilkinson is a Montreal writer and editor who recently joined Her experience comes largely from her work at print publications like La Scena Musicale, where she alternated between positions as content manager, copy editor and journalist.
She believes in the importance of strong writing, be it in journalism or in other media, like blogging or even social networking. Her prerogative: though language will and ought to evolve, a good writer need never sacrifice the communicative power of text that is written with thought and care, whatever the venue.
Find Emily on Twitter @EditorWilkinson

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