PointSite.com Late to the Party

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PointSite.com, a solutions provider that allows companies to create privately branded loyalty programs, launched this week.

The timing for the launch appears to be off, considering established players such as MyPoints.com and FreeRide.com are in the midst of major layoffs, and Netcentives is suing most of the existing loyalty companies for patent infringement.

PointSite is a turnkey solution that hosts and maintains a client company's database, collects user and transaction information, develops customized product redemption catalogs and oversees prize fulfillment.

The company also considers itself the only customizable, outsourced loyalty application that allows its customers to retain its customer databases.

"Our key distinction is, the company that signs up in the loyalty program owns the right [to the customers who participate]. With Beenz, regardless of whether I get my points by buying at Amazon, I belong to Beenz," said Farhan Merchant, CEO/founder of PointSite Inc., Toronto. "The rights to the customer are 100 percent owned by the clients."

Despite PointSite's claims, there are a number of companies that create private-labeled loyalty programs, including Stario Inc., Santa Clara, CA. Stario describes its offering as one that gives the merchant complete control over their programs, their data and their brand. It launched in April.

Regarding this new competitor, Harsha Raghavan, CEO of Stario, said, "They're definitely late to the game. Points that are private-labeled or branded -- both games have enough established players."

PointSite has been in development for a year and a half and launched in July in stealth mode. Now that it is officially on the radar, it may be in for some trouble, considering Stario is one of the companies named in Netcentives' patent infringement lawsuit.

Merchant is not concerned, however. "We've had extensive meetings with our lawyers around this patent issue," he said. "Our lawyers felt that what we offer is a little bit different and does not infringe on the patent."

The difficulties MyPoints and FreeRide have been through do not affect PointSite, Merchant said. "We don't have to brand another 'me-too' loyalty program. We remain invisible to the end-user, so at the end of the day, we're not competing with MyPoints or Cybergold. We don't have to market to 45 million people like they do."

ClickEffect Inc., with its Instantbingo.com property, is the first company to run the PointSite technology. It offers its players the chance to build up points when playing various online games.

Merchant said a number of new clients "are on the bubble."

Maritz, an incentive house based in St. Louis, is handling fulfillment for client programs.

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