At the Goldman Sachs Internet and Technology Conference in San Francisco Thursday, Groupon Founder and CEO Andrew Mason took to the stage to talk about the daily deal behemoth’s newly-minted position as a public company, its roller coaster ride both leading up to and since its IPO, as well as plans for the future.

There was a lot of pressure bearing down on Groupon in the months leading up to its emergence on NASDAQ, with many grumbling about its overvaluation and undercooked business model, among other things. After listing its initial offering at $26 a share in November, the company’s stock today has dropped to $20 a share, after a series of ups and downs.

It also recently shared its first earnings report as a public company, missing expectations, losing $350 million overall and seeing $137 million in international operating losses. Most of this loss, however, could be attributed to the company aggressive international expansion, as 70 percent of its some-10,000 employees are now overseas.

Though one might be able to say this about any number of points in a company’s history, it does seem that Groupon is entering a crucial phase of its development. In just three years, it skyrocketed to domination in the deals space, raised multiple massive rounds of funding, and piloted a successful (and huge) IPO. The quiet period (pre-IPO was tough on the company, exposing many of its inherent weaknesses, but “toughening it up,” Mason said today.)

That’s all well and good, but there are appallingly low barriers to entry in the daily deals space, and while Groupon deserves much credit maintaining a firm grasp on market share in spite of a slew of competition (much of which has now receded), it must now transition from Groupon 1.0 to Groupon 2.0. The company is well aware that it needs to deliver longer-term value to both merchants and customers if it is to continue outpacing competition.

Groupon is focused on closing the redemption loop on its platform, and enabling merchants to encourage repeat visits to their stores, and distance itself from its reputation as platform that encourages bargain hunting and not loyalty. Mason says that he and the team believe in the success they’ve had in bringing marketing to small businesses, and that they are eager to continue expanding on their mobile services by shipping mobile devices with pre-installed merchant apps, for example, that can be used by its merchants to track redemption and collect data on customer spend.

It has been piloting Groupon Rewards, a program that serves rewards to repeat customers based on their credit card information, and Mason said that he believes that the “paper model of redemption” is on its way out.

Over the last few quarters, Groupon has been spending an increasing amount on international marketing efforts, and questions from the audience brought up the discrepancy between the company’s U.S. business and its international efforts. “There are big differences now in Groupon’s business in the U.S. versus internationally,” Mason said, “but we’ve seen the model work wherever we take it — besides China.” The company’s efforts in China have been a widely-covered disaster, but Mason was firm in the belief that Groupon would still be successful elsewhere.

He attributed some of its problems in international markets to the fact that the company is just simply farther along technologically in the U.S. “But that’s starting to change,” he said. Why? Well, the CEO clearly has big hopes for rolling out deal personalization overseas, as the company already serves personalized deals in the U.S. based on location, gender, past buying behaviors, and other criteria.

Up until now, Groupon hasn’t offered any of the same deal personalization features on its international platform, but that will be “starting to change later this quarter,” the Founder assured the crowd. Groupon has taken an approach to global expansion that involves replicating its playbook in city after city, but questions remain over whether or not it can sustain its growth on a diet of daily deals alone.

And now it appears that there is some evidence that Groupon is testing an Amazon-like commerce platform abroad, with the company now using international markets as testing grounds for new services. With personalization moving abroad, and it testing more robust shopping experiences, Groupon is hoping that its aggressive spending on its global business (and transactional advertising) will be a valuable investment in the long-term.

And perhaps a VIP service, too.

Editor’s Note: This guest post is written by Nir Eyal (@nireyal), a founder of two startups and an advisor to several Bay Area incubators. Nir blogs about technology and behavior design at nirandfar.com.

Reading Leena Rao’s recent article on Techcrunch about the personalization revolution, you get the sense that the tech world is waiting for a bus that isn’t coming. Rao quotes well-known industry experts and luminaries describing what needs to happen for e-commerce to finally realize the promise of personalized shopping, a future where online retailers predict what you’ll want to buy before you know yourself.

Ironically, Rao and her pundits are missing the zooming racecar that’s speeding by them as they wait for the personalization bus to arrive. That racecar is Pinterest and the new breed of startups marking the beginning of what I call the “Curated Web.”

The promise of personalized e-commerce began over 10 years ago with technology pioneered at Amazon. It was then that the mental dye was cast for what eCommerce personalization would look like, an algorithmic solution for matching customer to products. Web watchers came to expect that someday all online retailers would have such algorithms on their sites and the dream of personalized
commerce would finally be realized.

For over a decade, startups took their best shot at making this apparition a reality. Companies like Hunch tackled the data collection piece of the equation, asking users endless survey questions to determine their tastes and preferences. Google’s Boutiques.com tried to crack the challenges of structuring the data associated with personalized shopping recommendations. Ultimately, these attempts failed.

In September, Google shut down Boutiques.com and the founders of Hunch sold their company to eBay, an outcome far short of their IPO hopes. Previous attempts at eCommerce personalization were unsuccessful because those involved failed to realize they were missing one key element, the interface. Curated Web companies are defined by their ability to use new interfaces to collect and structure data better then previous algorithmic solutions.

While the tech world waits patiently, expecting the solution to e-commerce personalization to look like Amazon ported to other online retailers, “Curated Web” companies like Pinterest are changing the game by changing the interface. Pinterest will be the first company to nail eCommerce personalization because they understand the importance of having an interface, which matches what the user is there to do, discover stuff they like from across the web. Pinterest has cracked personalization right under everyone’s nose by doing the two things Rao says have yet-to-be invented, data collection and data structuring.

Pinterest is becoming the web’s personalized mail-order catalog. Each user is presented with a one-of-a-kind visual interface based on their tastes. They are presented with any product, from any retailer, anywhere in the world. The items they see are curated through people and topics they’ve identified as interesting and what is shown to them improves the more they interact with it. Every time they pin, re-pin, like, or comment on an object, the relevancy of the products displayed on their magic catalog improves. This is what personalization looks like, effortless, simple, social and fun. It’s the interface, stupid.

“Big deal?” you say. “Facebook can do this!” No, they can’t. Social media is for selectively sharing information about you and Facebook is built for presenting yourself in the way you want to be seen by others. Facebook is, by design, about creating a network of relationships and sharing with them selectively. This brings up all kinds of privacy concerns, which reduce the flow of content creation and sharing to limited circles (Yes, I said “circles.” Don’t even try it, Google).

Pinterest has no such restrictions. Pins are inherently open and there is no expectation that anything shared is private. It’s a community built on individuals acting in their own self-interest to capture and collect things that interest them. Facebook and Google+ are just not the right interfaces for capturing and collecting products, and attempting to discover new products amid the newsfeed clutter is hopeless.

To some, the rise of the Facebook “like graph” foretold a personalized future, where retailers could utilize data collected from what users “like” to serve targeted recommendations. Here, Rao is spot on about why Facebook fails to provide useful data on users’ tastes; it lacks structure.

What does it mean if I “like” something on Facebook? Not much. “Liking” a brand or even a specific product, doesn’t provide useful information. If I “like” Babies’R’Us, does that mean I like the brand, a specific outlet, a product I found there, or am I just hoping to get a coupon? From a personalization perspective, it’s pretty low-value stuff. There is no structure to correlate my actual likes with my Facebook “likes”.

However, Pinterest solves the data structure problem brilliantly. You’d think they’d need some fancy photo recognition technology to tag a handbag by color, make, and model, but I doubt they have any such technology. Pinterest doesn’t even try to solve the data structure problem because they don’t have to.

Again, it’s the interface stupid. By presenting users with a dynamic catalog, and tasking users with the job of deciding whose tastes they’d like to follow, structuring image data becomes irrelevant. Pinterest simply has to make sure the magic catalog appears, tailored to each user’s stated preferences. It’s doesn’t matter if Pinterest knows a thing about what’s in each image on a pin board; what maters is that it’s curated by the user and the user likes what they see. If they like the products, they’ll buy them, and Pinterest laughs all the way to the bank.

So while the rest of the web is waiting for the personalization bus to arrive, Pinterest, and perhaps a few other fast-moving Curated Web companies, will be far ahead. It’s clear, given Pinterest’s astounding growth that e-commerce personalization is here to stay, even if it looks nothing like what you imagined.

Note: I have no affiliation or investment in any company mentioned in this post.

Excerpt image from ClickeCommerce.com

Nothing is made in this country anymore. In terms of actual manufacturing, America is increasingly at a disadvantage. The logic of the global economy moves jobs overseas. Get used to it, we are told. Well, Bayard Winthrop thinks the conventional wisdom is wrong. He wants to bring manufacturing back to America, in the apparel industry, no less! His clothing startup, American Giant (gotta love the name), launches today.

American Giant is starting small, with a line of basic sweatshirts made in Brisbane, CA. American Giant doesn’t have any stores. It sells its sweatshirts only on the web, and soon will expand to other men’s basics such as T-shirts, polos, and button-downs. While the cost of materials and labor would be cheaper in Asia, a much bigger portion of the cost of a shirt is distribution.

By eliminating stores and going direct to consumer, American Giant can cut out a lot of the costs in the apparel industry and pass the savings onto consumers while still making better quality clothing. By controlling manufacturing, Winthrop also expects to be able to reduce his production cycles to 3 months or less instead of the 18 to 24-month cycles typical in the industry. By reducing cycle times, American Giant will be able to experiment more with styles and products and then increase production for the products which generate the most demand.

American Giant is a startup with 10 people and less than $5 million in funding, but the little giant is going after the Gap, J.Crew, and Old Navy. There is “no brand affinity” to those stores among men, argues Winthrop. “They don’t have a reason to live.”

How does he hope to compete? Simple: with better quality. “I feel like in the apparel sector the whole idea of quality has gone way,” says Winthrop, who has spent the past two decades in the apparel industry, most recently as CEO of Chrome, a chain of urban men’s clothing stores.

Winthrop wanted to make an “old-school navy sweatshirt” like the one his father used to wear that lasted 40 years, not the kind you buy at Old Navy. His first line of sweatshirts will be priced at a reasonable $59, but they are made with heavyweight cotton, double- and triple-needle stitching, thick ribbing at the waist, additional panels along the side for a better fit, and other construction details such as metal snaps designed in-house.

But can a Web-only clothing brand work? “Consumers are moving more online and spending more money online,” notes Winthrop. “Consumers’ expectations of value and quality are changing. The days of us walking into Macy’s and paying full retail for a shirt are basically going away.”

Watch the video above, in which Winthrop shows off his new sweatshirts and talks about his approach to American manufacturing.

We measure every last click when it comes to the Web, but there remains a gulf between online and the real world. Yet the online world increasingly drives behavior offline, especially when it comes to purchasing habits. How many times have you researched something online or on your mobile phone before buying it? Yet when you go to a store to buy it, everything you did online might as well disappear as far as the merchant is concerned.

It doesn’t have to be that way. The last mile in local commerce is really only the last few inches between the credit card in your outstretched hand and the card swipe at the register. That terminal is the gateway to the payment network, which today isn’t really connected to the Internet for most practical purposes. The payment networks is archaic and operates based on its own closed standards. But what if it was as easy to connect to the payment network as it is to develop an application on the Web?

That is the question a group of former Netscape engineers and executives are trying to answer with a new startup called CardSpring launching in private beta today. Cardspring is creating an application platform that will allow Web and mobile developers to write applications for credit cards and other types of payments. Cardspring attaches itself to the payment network in a secure fashion on one side, and on the other it presents itself as a platform for developers to create payment apps via Web-standard APIs. It is a bridge between the two networks.

These applications could include things like electronic coupons, loyalty cards, virtual currencies, or yet-to-be-imagined commerce apps. For example, you could get a $10 off coupon online, enter your credit card number, and then when you go to a store and pay with that card, the payment network would recognize the card and give you the $10 credit. Or you could swipe your card and it could email you the receipt. Or it could check in for you. Swiping the card would trigger an application. What you see is a piece of plastic. What the network sees is an application.

If this sounds a little bit like what Groupon, LivingSocial, Foursquare, Square or Google are trying to do, it is because they’ve all been trying to crack this nut in different ways. They all want to close the redemption loop between digital offers and in-store payments. “Groupon threaded the needle with coupons,” says CEO Eckart Walther, but in his eyes daily deals are no more than a “wonderful one-off solution—We are literally inside the payment network.”

Walther once ran Netscape’s platform group. He later went to TellMe Networks, Yahoo search, LiveOps, and ended up as an EIR at Accel. The company’s CTO is Jeff Winner, who was the head crypto guy at Netscape. He is helped come up with SSL (the standard security layer in the browser), among other things. Cardspring already raised $10 million from Accel and Greylock in a Series A (Andrew Braccia from Accel and James Slavet from Greylock are the partners on the deal). Other investors include SV Angel (which is a big believer in the Online2Offline trend), Morado Ventures, Felicis Ventures, and Maynard Webb’s investment vehicle, WIN.

Groupon isn’t the only attempt at a one-off solution. Foursquare links its merchant specials to American Express card purchases, but not every card. Google Wallet is trying to put payment apps into your phone.  It’s too fragmented. “Every day, a mini-platform is trying to launch.” he says. Instead, CardSpring is attacking the problem just like you’d expect a bunch of Netscape engineers would: at the network level. “What if we could bring the browser platform to the payment network?’ asks Walther.

Try to wrap your brain around that for a second. Your plastic credit card can trigger different applications—coupons, loyalty rewards, reminders, check-ins, you name it. All of it is secure and based on permissions you allowed each application to have (in return for some benefit). “One of the Internet’s fundamental challenges is its inability to effectively capture the economic value it creates for business in the physical world,” notes Braccia. “CardSpring’s platform enables offline stores to easily measure the impact of the web on their business.”

There is a huge need for this type of payments platform. Groupon could use it to finally track redemptions of its coupons without having to ship iPads with special software to bars and restaurants. Foursquare could tie it into its specials and actually capture the purchase data and then show that to merchants in their dashboards. So could LivingSocial.

And that’s just for starters. Imagine cost-per-action ads where the action is an in-store purchase. The possibilities are endless. Not only that, but any website or mobile app that takes credit card information will now have the opportunity to append data to those purchases, and to read and write data to the payment network. It is not just about moving money, but moving payment-related data. In the end, the data may turn out to be more valuable.

The difficult part will be to convince consumers to hand over their credit card numbers in order for these applications to work. To the extent that the initial websites and apps already hold consumers’ credit card information, like Groupon or LivingSocial do, that shouldn’t be an issue. But when unknown sites or businesses start asking for that information, it might not be as forthcoming.

Still, there is a lot of low-hanging fruit here and Cardspring brings a clever approach to a difficult problem. It is not asking much of consumers or merchants. They do not need any new technology or fancy NFC-powered phones or terminals. All they need is their credit card. The network will do the rest.

�

Some 15 companies, including Google, Facebook, Microsoft, Yahoo, PayPal plan to jointly work on a standard for blocking phishing e-mails by verifying that they come from legitimate companies. It seems obvious that trusted, legitimate companies could come together to do this, but it’s only started happening in the last 18 months.

DMARC.org – or the Domain-based Message Authentication, Reporting, and Conformance – is a new white-list system will be available for use across the Internet.

The other companies in the DMARC working group are AOL, Bank of America, Fidelity Investments, American Greetings, LinkedIn, and e-mail security providers Agari, Cloudmark, eCert, Return Path, and Trusted Domain Project.

The move follows an announcement in November that Google, Microsoft, Yahoo, AOL, and Agari were authenticating emails from Facebook, YouSendIt, and other e-commerce companies and social networks.

DMARC said the anti-phishing initiative has actually been going on for the last 18 months.

According to Google, about 15 percent of all e-mail comes from members of DMARC, but by published their DMARC records, these records can not be domain spoofed. This makes the anti-phising group much more effective at stopping criminal gangs from using phasing to dupe unsuspecting users.

DMARC.org plans to submit the DMARC specification to the Internet Engineering Task Force for standardisation.

So perhaps we’ll start to see the ending of phishing once and for all.

Y Combinator alum Curebit, an online customer referral platform that leverages social media for “word-of-mouth” advertising, has just raised $1.2 million in funding. The investors include 500 Startups, Karl Jacob, Auren Hoffman, Dharmesh Shah, Gordon Tucker, Alex Lloyd of Accelerator Ventures, and others.

The funding will be used for continued product development and a slight expansion to the team involving three new hires (two developers, one designer) to the company’s now five-person outfit.

Curebit, for those unfamiliar, works to optimize the referral systems for eCommerce platforms and software-as-a-service (SaaS) companies (See previous coverage here).

The startup offers a few different ways for businesses to take advantage of its tools, the first being a post-purchase campaign that allows customers to share the details of the purchase on Facebook, Twitter or via email, as soon as the transaction completes.

“We figured when’s a better time than when you’ve basically voted with your wallet, saying ‘hey, I like this store,’” explains Curebit Co-founder Allan Grant.

Companies can also use Curebit’s technology to build standalone referral pages that are accessible at any time, or in one-off campaigns meant to further the reach of existing referral programs.

The startup says it now around 1,000 customers, including everything from smaller, e-commerce stores to larger customers like Giggle.com and a newly signed (but unannounced) top 20 retailer and a consumer foods company. The technology is also available as a plugin for 14 platforms, including Shopify and Magento.

By leveraging social media for the word-of-mouth referrals, Curebit’s customers see higher clicks and conversions than in traditional campaigns, where, for example, customers may have come in by way of ads. The referrals are like personal recommendations from friends, and often include a benefit, like a discount for the new customer, or for both the new customer and the friend who’s doing the referring.

When either the customer or the friend gets a deal via the referral, Curebit is seeing 15%-25% share rates. When the deal is double-sided (both people benefit), share rates are 45%-65%. Meanwhile, only 3% share using the standalone share button. Curebit also sees 1 to 5 clicks per share, depending on the product.

More unique products seem to do better than commodity products, notes Grant. And Curebit’s conversion rates are generally 2 to 3 times higher than traditional methods, and, in some cases, have been as high as 30%. Even better, Curebit’s referrals pay off in terms of dollars spent at checkout, too.

“The other thing we’ve seen consistently on just about every single site is that people spend more,” says Grant. “The average order amount is higher, and it’s not just higher based on how much the discount is – it’s higher even beyond that, even when you take the discount out.”

It’s the personal nature of the Curebit-powered recommendation that’s freeing people up to spend, it seems.

Exclusive - On a mission to democratize e-commerce and help take the concept of social shopping from fad to reality, Shoply is making its formal debut today after a year of bootstrapping.

The bootstrapping days are over, as Shoply has raised an undisclosed amount of seed financing from former Facebook VP Chamath Palihapitiya and serial entrepreneur and scarily prolific angel investor Fabrice Grinda for its “Fab.com and Pinterest love child” (among other backers).

In essence, Shoply is a marketplace where any small brand or local business can sell wares online. Since quietly launching last year, 10,000 sellers have already found their way to the platform, generating “thousands” of monthly transactions according to founder and CEO Liad Shababo.

Shoply aims to give anyone who wants to sell – from individuals to SMBs – virtually anything online a way to do so quickly and easily, but also actively bring them a steady stream of customers by leveraging social media and technologies, and help them promote their businesses on the Web.

Obviously, that’s easier said than done, but Shoply appears to have nailed what businesses need to successfully establish and promote an online store.

Shoply stores are free to get up and running, with no setup or listing fees, and the startup charges either a 10 percent commission fee on sales, or a premium flat rate of $29.99 per month.

The downside of not charging listing fees is that Shoply will need to a better job monitoring what sellers are putting up on the site (I noticed some – expensive – spam products on the marketplace).

They also don’t currently police shipping fees charged by sellers, so that means you’re bound to raise your eyebrows at total prices sometimes when you shop (e.g. sellers charging a $85 shipping fee for a $45 item is just ridiculous and downgrades the overall experience).

Shababo tells me that they’ve built the site with only 3 people so far, and that those kinks will be gradually removed as they grow the team and take the site to the next level. He also points out that a lot of what gets showcased on the site is there based on user activity, so lousy offers should get organically pushed down anyway.

Indeed, for consumers, Shoply provides a social shopping experience where they can discover and buy unique products from a trove of independent sellers on a single platform. Users can curate products they love and share them with others, but there’s more to it than that.

By following other users, Shoply members can remain updated on all the happenings on the site, such as new products listed by their favourite sellers, or new collections of items created by the users they follow. Shoply uses the available data to provide consumers with suggested lists of products, shops they should be following and other members with similar tastes. I like it.

Shoply is based in London, UK, with offices in San Francisco opening soon.

Exclusive - Yes, even more Berlin startups with news to share.

MONOQI is today launching an exclusive online shopping platform where select designers can present their wares and buyers can purchase them at reasonable prices.

More at TechCrunch Europe.

Buy a hamburger and get rewarded with Facebook Credits to spend on a virtual cow. That’s the mouth-watering promise of startup Plink, which is launching a virtual currency loyalty rewards system for restaurants. You register a credit card with Plink, and then when you make purchases at Taco Bell, 7-Eleven, Dunkin Donuts, or one of Plink’s other clients you’ll get Facebook Credits automatically deposited into your account. As demand for Facebook Credits to spend on social games and media increases, expect more virtual currency incentive companies like Plink to pop up.

The reason virtual currency microincentives work is because they are so cheap to distribute, and users perceive their value as higher than their cost. Mailing someone a coupon or rebate can cost enough to prohibit small incentives for small actions and purchases. Since it essentially costs nothing to drop Credits into someone’s Facebook account, businesses can cost-effectively reward users with just a few Credits, which typically cost $0.10 each.

Those cheap Credits power entertainment by letting users continue playing their favorite social games or buy virtual goods and powerups. Many games accept Credits, but few users actually pay, and those that do may feel guilty about it. This and some A/B tests I’ve heard show users prefer a reward of 50 free Credits to $5 off a purchase show users may irrationally value virtual currency at higher than its actual cost.

That means incentive companies like Plink can be more persuasive giving away Credits than money, and that margin between perceived and true value turns into profit. Since late 2010, Ifeelgoods has been helping online businesses reward users with Credits for signing up for email lists, following Twitter accounts, and making ecommerce purchases. Plink is targeting offline restaurants instead with a very valuable business proposition.

Plink helps businesses draw new customers and increase loyalty with a system that requires no point-of-sale integration, hardware, staff training, or up-front fees, Plink told AllFacebook. Rewards are distributed automatically when customers pay with a registered credit card, and clients pay Plink a percentage of what its users spend.

The only friction for users comes in with registering a credit card. Since Plink needs read-access to your purchases so it can see when you make purchases at its clients, you have to log in to your online banking account. While totally secure, this process could cause significant drop-off during sign up.

Still, Plink’s idea is brilliant. It has the beneficiary trifecta, where restaurants drive sales, users get rewards without having to change their behavior, and Plink takes a cut. Businesses have been searching for a better loyalty system, but most come with the barrier of complicated in-store redemption. Plink’s system could easily expand to support retail or any other type of businesses. At that point, it could be taking a small percentage of a huge volume of sales with little overhead. Doesn’t that sound tasty, investors?

In 2011, Sony had several major security breaches: Sony Online Entertainment, Sony Pictures, and Playstation Network all were attacked and private data was successfully stolen. Their handling of the attacks, particularly the larger PSN one, was widely criticized.

Many users are either unaware or acutely aware of how many sites and services have financially or personally sensitive information on record. Events like the Sony hacks do not reassure them, and actions like Google’s yesterday (though arguably innocuous) may alarm them. Users want more control and more security.

And the EU is looking to give it to them. But with the threat of enormous fines, many companies will find that the most logical thing to do is move away from the entire business of storing and serving user identities.

It’s a simple fact that maintaining a database of a hundred thousand or a million (or far more) active users is a serious engineering problem in both software and hardware. Keeping things secure but still accessible, staying abreast of new regulations (like those proposed in the EU), providing localized support on billing and user data issues — it’s quite a task. Web enrollment in software and services is growing at a huge rate, and many products and “real” items such as cars and banks are increasingly reliant on online services as well. It’s been happening for a long time, sure. But the stresses are starting to get out of hand.

If you’re a car company, or a movie distribution service, or a game publisher, the process of keeping and tracking your users securely is becoming too great of a portion of your business. And with increased regulation and requirements like the EU’s (which some are calling “onerous” and a “tax” on businesses that keep electronic records, but are probably nevertheless inevitable), it’s not something on which they can get by with minimal effort.

So what will happen? The same thing that happens whenever a part of an industry begins to outgrow its role: new, dedicated companies sprout up and the world offloads the task onto them.

This already happens to some extent, of course. It’s not like every company in the world maintains an independent and proprietary database of its users. There are services and software for this purpose, and the user-management business is plenty real already.

But for the millions and millions of people and accounts still internally managed (numbers that are growing worldwide in any market you can think of as online services gain more traction), the situation no longer makes sense. Why should a company that runs a movie distribution service also be running a world-class user-management service? It doesn’t make any sense. It’s like a restaurant making its own forks.

It was logical for a while that data related to Sony services should reside on Sony servers, administrated by Sony. But in a day where our logins transcend sites, and everything we do is personalized, that no longer really rings true — to Sony, that is. Regular humans want to go to a site, put in their user name and password, and have their data retrieved. They don’t really care if the data is served by Sony or a third-party site because it’s never said one way or the other.

But for Sony and companies like it, the increasingly expensive and complicated user-management part of their business is starting to look like an attractive target for spinning off to third-party services. And third-party services are going to start revving their engines to attract these user-weary multinationals. This doesn’t apply to services like Instagram and Spotify, naturally; they’re account-focused to begin with.

It will be much easier for a company built from the ground up for user databases to handle these requirements and adjust to local laws. They can do it faster, better, and cheaper than an internal team, and compete directly with each other. It’ll be good for the user data sector and good for the multinationals hoping to offload this burden. Not to mention good for the users: the EU regulations require fast turnaround on data, instant notification of security breaches, and impose heavy fines for abusive or neglectful companies. Sony wants to worry about the quality of its games and devices, not about whether each of its 20 internal user-tracking divisions is jumping through legal hoops.

Secure account management isn’t the most exciting business, but you better believe it’s going to show some serious growth over the next few years, and everyone will gain by it.