When asked about the news and speculation that Square could rival VeriFone’s size with only about a tenth of the sales, and no real profits, VeriFone chief executive Doug Bergeron responded with two words: ‘Pets.com’ — referring to the over-hyped dot-com that crashed and burned in 2000.
(via American Banker)
Given my past interactions with Verifone, I am not surprised that Bergeron feels that way. I am quite aware of their dislike of Square and Verifone bristles at the amount of the attention paid to company led by Jack Dorsey, the it founder for now. The two companies have been sniping at each other for a long time. Earlier this year, Verifone was caught using the text from Square’s legal user agreement. In 2009, when Square launched, I pointed out that that Square could potentially become a disruptive force for the likes of Verifone for it represented a new emergent people-to-people economy.
This peer-to-peer economy is a throwback to an older way of life, where folks used to barter for goods. It was a different kind of economic transaction, but still it was an economic transaction. The onset of industrialization brought in mass production and mass consumption into our societies. The Internet and by extension, mobile is going to help change that.
One of the things the Internet enables is our ability to connect with each other very quickly. The network is a springboard for services and platforms that enable one-on-one (or one-to-many) interactions. The easy to use tools — web and mobile — make it easier for like-minded people to congregate and engage in commerce.
Square is raising $200 million and is valued at about $3.2 billion, the New York Times has reported. I have heard similar valuations.