Valista signs €10m technology deal with AOL

15 Nov 2004

Irish web and m-commerce software player Valista has signed a technology deal potentially worth up to €10m with one of the world’s biggest internet service providers, AOL, which boasts up to 23 million customers worldwide. The deal will see Valista’s OfferPlus micro-payment software deployed to enable AOL sell premium services such as music, games, security software and movie clips to customers.

Valista CEO Raomal Perera (pictured) told “Essentially AOL wants to sell premium services such as Norton Antivirus or various music and entertainment products to consumers and our technology will help it manage the sales of these products intelligently by putting a middleware layer on top of AOL’s billing system. This allows AOL the freedom to bring newer products online faster and offer products in bundles making it simple for the end user.”

Valista’s OffersPlus allows consumers to purchase goods and services according to his or her needs. First-time or low-use customers can pay for services individually, while higher-use or loyal consumers can save by purchasing bundles (packages of content) and subscriptions. The license models enabled by Valista OffersPlus include time-limited and time-and-event-limited, individual or bundled offers. The system manages user access and consumption, and manages the automatic charging according to the charge period and recurrence rules. Examples of time-limited offers include a user monthly subscription of US$5 for antivirus software or a safety and security bundle consisting of antivirus and spam-filtering products for US$9 a month. An example of a time-and event-limited offer might involve monthly access to a gaming site plus 10 game tokens or monthly access to a pop star’s members’ site plus the right to download any five MP3s.

Perera explained: “The technology will manage the complexity at the back-end, ensuring that when consumers have bought these goods the correct share is going to the right merchants allied to AOL.”

Adam Zawel, director of wireless, mobile enterprise and commerce at Yankee Group, explained: “Marketing strategies are limited by inflexible payment systems. Valista’s new offering frees carriers and others to try new schemes to win customers. This billing flexibility is vital, especially in new markets such as wireless entertainment and online music. Payment flexibility is also essential for supply chain harmony, as market participants, such as operators and content providers, merge their business models.”

According to Perera, the deal with AOL was originally signed last March but could only come to light now. He hinted that the deal has resulted in a number of other deals with major communications firms worldwide. One of the first customers for the OffersPlus technology was France Telecom, which uses the technology to manage as many as 300,000 transactions a day online. “We gained a lot of credibility on the back of the AOL deal and that has helped us to close a number of other deals in new markets,” he added.

Technology veteran Perera formed Network365 in 1999 and the company made considerable ground in the mobile commerce market in Europe, South America and Asia, winning notable contracts with players such as DoCoMo, Hong Kong Telecom and Vodafone. Valista was formed following the merging of Network365 with a US company called iPIN in November last year. The merger was welcomed at the time by industry analysts who viewed it as a significant event that will enable the growth of payments technology and the evolution of standards in the sector.

Perera acknowledged that perhaps without the merger having taken place, deals such as France Telecom and AOL would not have been possible. “The merger has been a tremendous success and 2004 has been a great year for us, primarily due to our ability to bring the two companies together, opening up new channels and product ideas. Until the merger happened, growth was gradual for Network365. The merger has been a catalyst and the market is taking off.”

He told that the 80-strong company more than doubled revenues for last year and that the backlog for business contracts this year is looking healthier than last year.

By John Kennedy