The addition means PayPal now has four primary data centers,
which it runs from network operation centers at its headquarters
in San Jose, California, and Scottsdale, Arizona.

“We’re growing still very, very fast, so we need more
machines, more capacity and bandwidth,” Marcus told Reuters in
an interview.

Marcus declined to say where the new data center was located
for security reasons. However, he said it has new technology
that integrates well with some of PayPal’s new initiatives.

PayPal is still growing online, but the company is also
trying to become a common way of paying in physical stores, a
much larger market than e-commerce.

The company expects to be in 2 million merchant locations by
the end of 2013 and it is working on ways to persuade consumers
to use PayPal with their smartphones, rather than their usual
credit and debit cards.

Firing up a new data center “is a big sign of optimism,”
said Gil Luria, an analyst at Wedbush Securities. “PayPal could
stretch their existing IT capacity or rent extra capacity, but
they have the confidence to build a whole new data center.”

In late March, Marcus told investors that PayPal can double
the size of its business in the next three years.

Adding a fourth data center means PayPal is essentially
increasing its IT capacity by a third, to support a potential
doubling of its business. That suggests that the company is
getting more “scale” as it grows, Luria said.

Data centers are often built to handle peaks in activity. As
PayPal grows in different parts of the world, it is likely
experiencing different peaks because users are paying with
PayPal at different times, Luria explained.

“A single new data center can support several times as much
activity because the peaks are spread out at different points in
time and not as pronounced,” Luria said.

“You’ll start seeing us amping marketing up later this year,” Marcus said in an interview with Reuters.

PayPal is trying to become a common way of paying in physical stores, a much larger market than its online roots. The company expects to be in 2 million merchant locations by the end of 2013 and it is working on ways to persuade consumers to use PayPal rather than their usual credit and debit cards.

Customers would use PayPal via smartphone app. In addition, shoppers at the checkout counter can use PayPal by typing in a mobile phone number and a four-digit PIN that has to be set up online beforehand into the merchant’s system. They can also use a PayPal card that links to their account.

“Swiping a card in a store is not hard,” Marcus said during a meeting earlier on Tuesday with reporters at PayPal’s headquarters in San Jose, California. “We really have to bring a lot of value to consumers to change that behavior.”

Marketing will be a big part of this push. PayPal has already run several online video ads starring movie actor Jeff Goldblum to promote its payment service.

EBay ran a big TV ad campaign in 2011 which helped revive its online marketplace. EBay waited to fix consumer problems with the marketplace before it spent heavily on such marketing and PayPal’s Marcus is taking a similar approach now with the expansion into stores.

“We want to make sure we have enough density of consumer experiences before we do a lot of marketing,” Marcus explained. “We have really only one chance at this and we do not want to disappoint customers.”

PayPal has been testing a way for customers of smoothie store Jamba Juice to order ahead using PayPal’s smartphone application and pick up their drinks at a separate line.

PayPal has been testing this at seven Jamba stores in the San Francisco Bay area but will roll it out at more Jamba stores across the United States. It expects to announce similar line-skipping deals with other companies soon, Marcus said.

Also on Tuesday, Marcus announced a new partnership with RadioShack Corp that will introduce PayPal into all of the electronics retailer’s stores starting this month.

(Reporting by Alistair Barr; Editing by Gerald E. McCormick, Grant McCool and Cynthia Osterman)

Amazon Web Services, known as AWS, was certified to operate as a cloud service provider for three years under the government’s new FedRAMP program. The accreditation covers all AWS data centers in the United States, the company said on Tuesday.

“This will cut the cost and time for agencies to deploy our systems,” said Teresa Carlson, vice president of Worldwide Public Sector at AWS. “It cuts costs for AWS too.”

Amazon, the world’s largest online retailer, has moved aggressively into the business of renting remote computing, storage and other IT services in recent years through AWS.

The business has been a hit with startups, but the company is now going after big corporations and government agencies, a much larger opportunity. However, these organizations are more demanding, especially on issues like security and regulatory compliance.

Last year, the U.S. government launched FedRAMP to standardize and streamline security assessments of cloud services. Before this program, if a vendor wanted to sell IT services to a government agency it had to obtain authorization for each separate project, slowing down the process and making it more expensive.

Under FedRAMP, AWS will be able to get approved for a government agency once and then its services can be used many times on multiple projects by that agency.

AWS said it received its three-year clearance through the Department of Health and Human Services. The certification covers this agency and all its operational divisions which include the U.S. Food and Drug Administration, Centers for Disease Control and Prevention and the National Institutes of Health.

(Reporting by Alistair Barr; editing by Matthew Lewis)

Target’s Technology Innovation Center is run by David Newman, an executive who spent six years at the online business of Wal-Mart Stores Inc (WMT.N: Quote, Profile, Research, Stock Buzz), which has had a major presence in Silicon Valley for several years.

“Partnership is in our DNA and early-stage companies can sense that and are proving to be very willing to partner and co-develop,” said Newman.

Many retailers are pouring money into new technology to help them catch up with Amazon.com Inc (AMZN.O: Quote, Profile, Research, Stock Buzz), which has become the world’s largest retailer by grabbing market share from traditional bricks-and-mortar stores.

Mobile commerce, powered by smartphone-wielding shoppers, is a particular focus of retailers because this technology has the potential to revitalize in-store sales.

Target’s San Francisco office will focus on “core commerce” initiatives, such as speeding up the company’s website. However, it also aims to bring more digital shopping experiences into the retailer’s physical stores through smartphones, Newman said.

One area Target is exploring is “augmented reality,” which uses smartphone cameras to give shoppers a digital view of store aisles and show them related products, Newman said.

That technology is still a long way off, but Newman noted that Target is already working with eBay Inc (EBAY.O: Quote, Profile, Research, Stock Buzz) and Google Inc (GOOG.O: Quote, Profile, Research, Stock Buzz), two Silicon Valley giants, on same-day delivery tests.

Target also recently began testing a service that allows its employees to order products online and pick them up in the retailer’s stores. The company plans to roll this out to customers this Fall.

Wal-Mart’s e-commerce offices, south of San Francisco, have churned out a slew of new online and mobile technology in recent years and these efforts might be showing early signs of success.

First-quarter e-commerce sales jumped 30 percent from a year earlier, Wal-Mart reported earlier this week.

“The company seems to be gaining traction in several geographies with different technologies such as Scan & Go, Ship from Store and increased mobile capabilities,” Robert Drbul, a retail analyst at Barclays, wrote in a note to investors on Thursday.

(Reporting by Alistair Barr. Editing by Andre Grenon)

“Zombieland” writer and producer Rhett Reese wrote on Twitter that Amazon’s decision was “sad for everyone” and blamed it on negative online reviews of the pilot by viewers.

Amazon picked “Alpha House” to develop into a full TV series, said Garry Trudeau, the “Doonesbury” cartoonist who wrote the comedy and is co-executive producer on the project.

An Amazon spokeswoman declined to comment on Friday.

Amazon produced 14 TV pilots and posted them online earlier this year to watch for free. The company has been collecting reviews of the shows and has been crunching other data, such as viewing times, to decide which projects to turn into full TV series.

This is part of a new push by the company to make its own TV shows and distribute them over the Internet – something rivals such as Netflix Inc and Hulu are also doing.

Zombieland, based on the successful movie of the same name, got more than 5,500 reviews averaging 3-1/2 stars on Amazon. There were over 1,200 one- and two-star reviews.

“I wanted to love Zombieland, as a fan of the original. I really did,” wrote one viewer. “However the pilot felt like Zombieland sans the wit that made Zombieland funny.”

Reese, the writer and producer, blamed such feedback for the TV show’s demise.

“I’ll never understand the vehement hate the pilot received from die-hard Zombieland fans. You guys successfully hated it out of existence,” he wrote on Twitter.

Alpha House, a political comedy starring John Goodman, got 2,600 reviews on Amazon averaging four stars. More than half of the reviews gave it five stars and just over 350 gave it either one or two stars.

Amazon also picked up “Betas,” a comedy about technology start-ups in Silicon Valley, as a full series, according to Hollywood news website Deadline. This pilot received more than 1,500 reviews on Amazon averaging 4-1/2 stars.

“Browsers,” a musical comedy starring Bebe Neuwirth, was not picked up by Amazon, Deadline also reported. This pilot got 860 reviews on Amazon averaging three stars.

All Things D also reported some of Amazon’s decisions on the pilots on Friday.

(Reporting by Alistair Barr; Editing by Tim Dobbyn)

“EBay Inc is participating in the beta of Google Glass and
we are exploring the various use-case scenarios,” said eBay
spokeswoman Amanda Miller.

EBay’s Innovation and New Ventures group, run by former eBay
mobile executive Steve Yankovich, is taking part in the Google
Glass trial program, she added.

EBay’s online marketplace has been revitalized in recent
years by the success of apps the company developed early for
Apple Inc’s iPhone, the first mobile computing platform
to really take off commercially.

EBay wants to make sure that, if Google Glass becomes the
next big mobile platform, its apps will be on there early too.

Some of eBay’s existing mobile apps already let shoppers
point smart phone cameras at products to check online prices and
buy related items. The price-checking capabilities have sparked
a new trend in retail known as show-rooming, the practice of
looking at items in physical stores and then buying them online.

Google unveiled a half-dozen apps on Thursday designed to
work on Glass, a stamp-sized electronic screen mounted on the
left side of a pair of eyeglass frames that can record video,
access messages and retrieve information from the Web.

Glass apps from social networking services Facebook Inc
and Twitter were among those announced on Thursday. [ID:
nL2N0DX24Q]

“If there’s a silver lining to leaving Groupon, it’s the
opportunity to start something new,” Mason wrote. “I’ve
accumulated a backlog of ideas over the last several years, my
favorite of which I’ll be turning into a new company this fall.”

“As part of this, my wife and I are moving to San Francisco
later this summer,” he said in the blog. ()

Mason said he intends to keep his Chicago-area home.

Groupon ousted Mason earlier this year after the company
suffered several quarters of losses as demand for its daily
deals waned and its European operations fell into disarray.

Mason said on Thursday that he will be spending a day each
week at start-up incubator Y-Combinator in coming months “to
keep my brain from atrophying.”

Earlier this month, Mason said he recorded a seven-song
album of “motivational business music” targeted at people
entering the workforce, called “Hardly Workin’.”

“I came to realize that there was a real need to present
business wisdom in a format that is more accessible to the
younger generation,” Mason said.

“I’m really happy with the results and look forward to
sharing them as soon as I figure out how to load music onto
iTunes, hopefully in the next few weeks,” he said.

T. Rowe Price; The Hillman Company, the investment firm of billionaire Henry Hillman; and existing venture capital backers including Andreessen Horowitz, Greylock Partners and Madrona Venture Group, also invested.

Apptio, led by Chief Executive Sunny Gupta, has raised a total of $136 million so far. The previous funding round valued Apptio at about $600 million and this latest round was a “significant” increase on that, Gupta said, while declining to give a specific number.

Apptio is one of a slew of start-ups that have sprouted to help enterprises use cloud computing services more. Apptio is a partner of Amazon Web Services, the cloud business of online retail giant Amazon.com Inc.

AWS, as it is known, is increasingly relying on partners like Apptio to help it lure more big businesses to its cloud.

“Global 2000 companies need a trusted, impartial partner to help them make the transformation to next IT,” said Matt McIlwain, a partner at Madrona. “Apptio will be using the capital to extend their market leadership and expand their geographic reach.”

Apptio counts almost one-third of companies in the Fortune 100 as customers, including Royal Bank of Scotland, Safeway, Target and Xerox, helping them manage more than $60 billion in annual IT spending.

Apptio helps chief information officers at big corporations compare the cost of renting remote cloud computing services with their own computer systems.

“Every customer wants to compare the cost of AWS with their own cost structure,” said Gupta in a recent interview with Reuters. “CIOs trust us to do this type of analysis versus a vendor like AWS which is trying to sell services.”

(Reporting by Alistair Barr; Editing by Richard Chang)

Groupon climbed 5.5 percent to $7.28 in midday trading, a nine-month high. Zynga Inc. shares jumped 7 percent to $3.57.

Jana, which oversees more than $4 billion in U.S. stock holdings, disclosed stakes of 24.6 million Zynga Inc class A shares and 21.9 million Groupon Inc class A shares in regulatory filings on Wednesday.

The positions represent just over 3 percent of the companies’ outstanding shares. The Groupon stake was worth $134 million as of the end of March, while the Zynga holding was worth $86 million, according to the filings.

Groupon, the world’s largest daily deal company, and Zynga, a leading social game developer, went public in 2011 at lofty valuations, but the share prices have slumped since then amid concern about slowing growth at both companies.

Zynga’s initial public offering priced at $10, while Groupon’s priced at $20.

Jana Partners, which often pressures the companies it invests in to change their business strategies or sell themselves, released its so-called 13-F filing Wednesday, which describes which U.S. stocks it owned at the end of the first quarter of 2013.

During the first quarter, the Jana Partners fund was up 6.1 percent. A spokesman for Jana did not immediately respond to a request for comment.

Zynga’s stock price has been under pressure as investors react to its slow transformation into a gaming company that’s focused on mobile devices such as smartphones, rather than desktop computers.

Groupon is undergoing a transformation too. The company is selling a lot more deals through smartphones and is listing longer-term deals in a searchable, online marketplace, a move away from its email roots.

(Editing by Bernadette Baum)

The online retailer, which since 2006 has moved aggressively into the business of renting remote computing, storage and other IT services, is roping in thousands of consulting and technology partners, from Cap Gemini SA (CAPP.PA: Quote, Profile, Research) to BMC Software Inc (BMC.O: Quote, Profile, Research), in a major push to woo big-spending corporate customers to its cloud computing division.

Amazon Web Services (AWS), as the business is known, has been a hit with startups which need robust and inexpensive Web services that they can purchase as the need arises.

But big corporations and government agencies, often referred to as enterprise customers, represent a far larger opportunity: they spend more than $300 billion a year on data centers, Bernstein Research estimates.

That market opportunity has helped Amazon’s stock price more than triple in the past five years as investors bet that the retailer’s cloud computing services will become an integral part of the way companies do business over the Internet.

Enterprises, however, are far more demanding than start-ups, requiring better service guarantees, closer tracking of expenses, special features for regulatory compliance and much more. Thus a network of middlemen who develop solutions that work on AWS servers has become central to Amazon’s strategy as it takes on established enterprise technology giants such as Oracle Corp (ORCL.O: Quote, Profile, Research) and International Business Machines Corp (IBM.N: Quote, Profile, Research) and competes with newer cloud rivals Microsoft Corp and Google Inc (GOOG.O: Quote, Profile, Research).

“Businesses want a full dish to eat, while Amazon serves up ingredients and asks users to get cooking,” said Matt McIlwain, a partner at Madrona Venture Group. “Enterprises are willing to pay to get the completed dish. Amazon recognizes this. That’s why they have created a network of partners.”

Madrona, headed by long-time Amazon board member Tom Alberg, has invested in a number of start-ups that help enterprises to use AWS and other cloud services, including 2nd Watch, Apptio and Skytap.

AWS has more than 4,000 members in its partner network, up from fewer than 1,000 in the first quarter of 2012, according to Terry Wise, its head of global business development.

“If AWS didn’t have this partner ecosystem, they would be struggling with enterprises,” said Kyle Hilgendorf, who set up Eli Lilly & Co’s (LLY.N: Quote, Profile, Research) cloud computing strategy before joining technology research firm Gartner as research director.

“I get calls all the time from enterprises that want to use AWS. They say ‘we wish that they did X, Y or Z.’ They often go to an AWS partner to fix these problems.”

A study by Hilgendorf and his Gartner colleagues this year concluded that AWS meets 71 percent of what enterprises need to fully embrace public cloud computing.

“Partners understand enterprise customers better and can often paper over the cracks,” said Mat Ellis, chief executive of Cloudability, which helps big companies such as Adobe Systems (ADBE.O: Quote, Profile, Research) track cloud spending.

GUARANTEED PERFORMANCE

One area where AWS falls short is so-called service-level agreements, or SLAs, which guarantee IT services will keep running. If service is interrupted, the provider has to compensate customers – and if it happens too often, they could become former customers.

Consultants that work with AWS say its SLAs are not always adequate for the needs of large enterprises. The one for AWS’s popular “EC2″ computing service, for example, guarantees downtime will not exceed about 22 minutes a month, according to calculations by Gartner and Cap Gemini.

Yet some enterprises require downtime to average no more than 5 minutes a month, said Joe Coyle, Cap Gemini’s chief technology officer in North America.

To fix this, Cap Gemini weaves together AWS servers in different regions around the world to make sure that if one data center area goes down, the rest of the network keeps running.

“We turn around and write a new contract with the client,” Coyle said. “The client would not even know they are on AWS if they didn’t ask.”

Cap Gemini has nine enterprises using AWS in this way, including intercity bus carrier Greyhound Lines.

Other companies, such as start-up 2nd Watch, are also developing their own approaches that guarantee less downtime than AWS itself.

The AWS partners can also help enterprises keep existing systems and have them work with AWS, an increasingly popular strategy known as “AWS plus one.”

Andy Jassy, head of AWS, said recently that enterprises can now use AWS and their own data centers at the same time. Software firms including BMC and CA Inc (CA.O: Quote, Profile, Research) can help companies manage this through “a single pane of glass,” he said.

The risk in this approach is that it makes it easier for enterprises to use rival cloud providers. Indeed, many of the larger partners already have long-standing business relationships with Amazon rivals.

RightScale, for example, a long-time AWS partner, helps enterprises run applications on multiple cloud platforms, including those offered by Microsoft, Google, Hewlett-Packard Co (HPQ.N: Quote, Profile, Research) and Rackspace Inc (RAX.N: Quote, Profile, Research).

RightScale helps Samsung SDS America, a unit of Samsung Electronics (005930.KS: Quote, Profile, Research), use AWS alongside OpenStack, a cloud platform promoted by Rackspace and other AWS competitors.

“Enterprises love the cloud. They just don’t want to only use AWS,” RightScale CEO Michael Crandell said. (Editing by Edwin Chan, Jonathan Weber and Richard Chang)