Portfolio News

Company Profile: Aplaud Technologies
By Kate Opekar, Deputy Editor
 
While eCommerce volumes have grown significantly (including travel and books), digital commerce has lagged.   In August 2002, Forrester estimated that US digital music revenues would total only $15 million for the year.  By contrast, Forrester expects US eCommerce sales to grow from $95.7 billion in 2003 to $229.9 billion in 2008.

Low digital commerce revenues result from factors including:

·      Lack of services and marketplaces for digital commerce beyond free P2P services

·      Ease of use and pervasiveness of competing/”illegal” P2P content distribution services

·      Reluctance to sell content online that might be copied and given away

·      Paranoia about privacy and security issues

·      Substantial integration issues for billing, identity management and content distribution

It is only now, under the mounting pressure of falling CD sales, slow growth in advertising sales and the onslaught of mobile content services that content providers and aggregators recognize they must find ways to create new distribution channels for their products, ideally by monetizing the power of P2P networks.

Aplaud Technologies – based in Cupertino, California - was established to address these problems faced by digital commerce: the selling and distribution of digital products and services.

Aplaud adds a transactional layer to P2P, using a technology that enables digital assets to be traded the way real money is exchanged for goods in the physical world.

This transactional layer handles the primary requirements for enabling P2P commerce: definition/publishing of offers, discovery of offers, execution of offers, and payment/settlement. The upshot is that Aplaud enables anything of value to be traded via P2P transactions.

It’s a digital content creators dream: a world where digital assets management becomes a tool to encourage more paid-for use through P2P exchange of content rather than try to control it; where viral marketing becomes a new method for stimulating sales; and where customers can become their own retailers, selling on rights to digital content as one might sell a physical good on the real world.

How does it work? Aplaud acts as a transparent escrow agent eliminating counter-party risk in all online transactions.  Aplaud then uses this transaction layer to provide three basic services for selling and marketing via P2P networks: Identity Management, Content Packaging and Payment & Promotions.

The identity management service helps manage a user’s digital assets (content, subscriptions, money, loyalty points, etc.) in a single, server based account. This account then interacts with content publishers to provide easy-to-use access control and single sign-on functionality.

Aplaud’s content packaging makes it easy to publish and access content via both the web and mobile devices.

Finally, Aplaud’s payment & promotions services allow any product seller to publish offers that can be accepted by the buyer using any communications medium available.  Its P2P trading model can be integrated with existing P2P networks, web pages, IM messages, email messages or mobile devices (via wap, sms, mms, etc.) In addition to viral distribution tools, Aplaud also offers support for incentive/loyalty programs and digital cash, which can be used anonymously across devices.

According to reports compiled by Gartner, Yankee Group, Frost & Sullivan and JP Morgan, the markets for digital content distribution and digital asset management will reach $12 billion by 2007.  Furthermore, the market for mobile micro-payment will reach $2-3 billion by 2007.

Aplaud’s technology helps to harness the power of P2P to further stimulate the exchange of paid for digital content - while ensuring that the creators of content can capture a portion of the value created. Almost the virtual equivalent of, “And I told two friends, and they told two friends, and so on, and so on…”

Ariadne Capital is currently working with Aplaud to identify strategic investment and sales partners.

For more information on Aplaud, contact Bundeep Singh Rangar at bundeep@ariadnecapital.com

For further information on Aplaud Technologies visit: www.aplaud.com.