LONDON - It's a mint deal: Beenz.com and Flooz.com, two companies offering an online unit of exchange, are joining forces to make their "e-currencies" all but interchangeable.
Beenz and Flooz have both been seen as pioneers in the new age of online currency, and have won praise for making it easy and secure to do deals online. But with two different business models at work, it's not clear how independent these currencies really are.
Marketers have long been hungry for a medium of exchange that would make online shopping a global venture, without respect for national boundaries or currencies. Witness the rise and fading of micropayments, Millicent, and other gambits.
Both beenz and Flooz independently felt they'd hit on an answer. Web users earn beenz for visiting designated sites, while Flooz are awarded as online gift vouchers. The companies said this week that although they're often seen as competitors, they hope that their new partnership will underline their differences.
"It makes complete sense for beenz to be convertible into Flooz," said Philip Letts, chairman and CEO of Beenz.com, as he announced the deal. "This deal should send a message to the world that Beenz.com and Flooz.com are business partners, not competitors."
But amid the bonhomie usually spawned by such a partnership, each company is trying to position its product as being more expansive than the other.
Beenz wants to be seen as a universal Web currency that transcends its roots as a loyalty program, akin to such classic marketing programs as Green Stamps. Flooz, meanwhile, wants to be seen as a payment option similar to Visa and MasterCard.
Ask the executives to explain the differences, though, and each will highlight the broader definition of its own product while using a narrower definition for its partner. "Beenz is a currency, not a loyalty scheme," says Letts. "And basically, Flooz is gift certificates on the Web."
Rob Levitan, CEO of Flooz, sees it otherwise. "We call ourselves an online gift currency," he says. "Beenz is really a reward loyalty company. They've created a more efficient system of Green Stamps." Levitan says the arrangement with Beenz is only one of four such partnerships with reward companies; he says Flooz will announce the others in the weeks ahead.
Beenz has set its sights well beyond offering rewards. The company proudly states its intention to be the first universal currency for exchange on the Internet. But the landscape is strewn with previous efforts. In 1998, MyPoints.com announced a program similar to Beenz, which offers consumers points for actions performed on partnering Web sites. In 1997, Digital Equipment's Millicent was going to use "scrip" to allow micropayments; a similar plan was tabled and then shelved by AT&T.
The Beenz business model is to make money off of transactions. The company arranges affiliations with Web sites that want to draw in traffic. Those sites award beenz units to consumers for visiting the sites, performing certain actions, or filling out forms with personal information. Other sites will sell merchandise or offer discounts for consumers who want to buy things with beenz.
The Beenz.com site routes consumers to both kinds of partners. It charges site operators a penny per distributed beenz, and pays out half a penny for every beenz that has been collected.
More than just a way to get consumers to visit sites, Letts says, the beenz model has become the Web's first, true e-currency.
"You've got to be able to earn a currency, spend it for lots of different things. It has to be freely tradable and liquid. By any technical derivation, beenz is a currency," Letts says. "E-currency will perform differently than regular currency. But currency is about a unit of exchange."
Although beenz has a conversion rate of 200 beenz to the dollar, Letts says there is no method that would let consumers use other currency to purchase beenz.
Flooz, on the other hand, is built around consumers purchasing units. A gift giver can charge an amount
