BidPay.com Inc., a unit of CyberSource Corp. that processed payments for online auctions, ceased to operate on Dec. 31.
CyberSource, citing continued financial losses and unsuccessful attempts to enter agreements for strategic alliances and investments, says its board decided early last month to discontinue BidPay.com’s operations and take an expected one-time charge related to the shutdown ranging from $1.7 million to $2.7 million in the fourth quarter of 2007.
“Due to BidPay’s continuing losses and delays with respect to entering into agreements for strategic alliances and strategic investments, CyberSource reached the conclusion that the BidPay business was unlikely to achieve success consistent with certain short and long-term goals,” CyberSource said in an 8K filing with the U.S. Securities and Exchange Commission. It said it expected to complete the shutdown by the end of this month.
CyberSource, which acquired BidPay for $1.8 million from First Data Corp. in March, had taken steps in recent months to make BidPay more competitive in a market dominated by eBay Inc.’s PayPal. In August, CyberSource lowered BidPay’s transaction rates for domestic as well as international sellers, streamlined its online purchase process to provide faster transactions, and made it possible for sellers to integrate BidPay as a payment option on their checkout pages.
BidPay, which was launched in 1999, served more than 4 million customers during its 8-year run, according to CyberSource.
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