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reputation.com

Reputation.com Buys MySocialCloud To Add Password Management Into Its Growing Data Vault

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Online identity and privacy startup Reputation.com continues its march along the acquisition trail. Today the company is announcing its third acquisition this year: MySocialCloud, which provides a cloud-based service that lets users manage all their passwords and other login information in one place, by way of an extension — called “Cloud It” — that exists as a button on users’ web browsers, used to auto login to any website when clicked.

Terms of the deal are not being disclosed, but Reputation.com’s CEO Michael Fertik tells TechCrunch that MySocialCloud will continue to operate as normal, and the young founding team of Scott Ferreira (22), sister Stacey Ferreira (20) and Shiv Prakash (27) and two others joining to build out the product to work with Reputation.com’s bigger business creating a “data vault” that users will then be able to control themselves — including selling on information to online marketers and advertisers, if they so choose.

MySocialCloud launched in 2011 and had raised at least $1 million from Richard Branson, early Flipboard investor Jerry Murdock, who is a partner at Insight Venture Partners (also a Reputation.com investor), and one of the founders of Photobucket, Alex Welch.

This is the third acquisition this year for Reputation.com, with others including snail mail filtering app PaperKarma, and Reputation 24/7, a UK-based company that Reputation.com is using to expand its international footprint.

The rush of M&A activity is the result of a couple of different forces. Among startups, there is the ongoing crunch to raise rounds. Yes, there are still many big-ticket announcements of eight- and even nine-figure investments, along with huge valuations. But so too are there hundreds of smaller-scale startups that are not making it over the fundraising hump, and not generating enough business to survive on their own — or perhaps not managing what funding they do have wisely enough.

Then, in the world of identity management and security, there is an argument to be made for some of these startups consolidating. It’s an extension of the question of whether a startup is a service or a platform: if it’s the former, chances are that longer term it will look like an attractive buy for the latter.

Reputation.com — which has to date raised nearly $68 million from investors including Kleiner Perkins, Bessemer Venture Partners as well as Insight — is very much playing on both of these themes. Not only does it have the funds to snap up smaller players, but it is doing so in order to enrich its business to better position itself as a platform for all kinds of online identity management, both for consumers and enterprises. It’s a timely move given the recent spotlights on data privacy, from questions about advertising tracking by commercial organisations like Facebook and Google, to data control by even bigger forces.

The idea, says Fertik, will be to integrate it into its “data vault” services — a secure platform that Reputation.com is building up that acts as a respository for personal data. For starters MySocialCloud will be offered free of charge, as a gateway to then hopefully upselling users to other, paid services. Fertik says that they are still working out the best way of positioning the business model.

“The reason that I think we can absorb MySocialCloud is that we have a good history of cross selling in our customer base. That was one of the things that we got best at early from a commercial standpoint,” he says, noting that the company currently has a 40% cross-selling rate among its current line of products. “We’ve been able to monetize and generate returns on assets. Whether that means charging for MySocialCloud or just offering free and monetizing on cross-selling, we’ll have to figure that out.” He notes that the recent acquisition of PaperKarma is already “going gangbusters” in this model.

But he also thinks that there will be an increasing trend for more consolidation in this space. “People don’t want 7 antivirus providers. They want one. And they want a one-stop shop where they can manage their data. We want to be that place.”

Notably, however, Reputation.com’s consumer data vault has bigger ambitions beyond simply being a repository for people’s information. The company has ideas about how it will let users control their data and how it gets used by advertisers and other online marketers, and get paid for when they do give access.

While some startups, like Disconnect, are coming up with ways for users to be completely shielded from online ad tracking, Reputation.com is taking this one capitalist step further. The idea is that companies can offer users incentives like coupons or free products, “or even money” to access their data. “The richer, more targeted information would help businesses refine their products and services – and potentially generate even better innovations for consumers,” the company notes.

“We’re building the vault to help empower users and ensure that they manage, control and ultimately benefit from sharing their personal data with companies,” Fertik said. “This will be a revolutionary paradigm shift away from the current model, in which consumers’ data is bought and sold, frequently without their knowledge or consent.”

Going forward, it looks like we will be seeing more acquisitions coming up from Reputation.com. “We are marching down a path where we are bolting on more user-centric data management products,” says Fertik. “The combination for us has to include products that make sense and are intuitive and put users in control of their data with a team that is good. We have not been looking for social commerce acquihires but teams with a shared mission and point of view who can bring a product to bear for our customer base.”

Look ahead also fore more international moves — Fertik says that currently international represents about 30% of the company’s growth “and we want that to be higher.”