Bits: A Start-Up Plans to Digitize Your Postal Mail

One glaring omission in the list of services that have been transformed by the Internet: postal mail.

A start-up, Outbox, is trying to change that by digitizing your mail. For $5 a month, you can skip trips to the mailbox and sorting and recycling your mail, and instead view and organize all your correspondence on an app and do away with junk mail with the swipe of a finger.

The Postal Service is particularly vulnerable, mired in debt, ending Saturday delivery and desperate for change.

Outbox is starting small. It has been operating in Austin, Tex., where the company is based, and this week expanded to San Francisco.

“From anywhere, anytime, you have exposure to your postal mail for the first time, in really a way that the postal network should be constructed in the 21st century,” said Will Davis, co-founder of Outbox, who calls the Postal Service the original social network.

With the app, going through your mail becomes easier and more convenient. Your letters and envelopes are picked up from your mailbox and scanned so they’re accessible on a pretty app. You can unsubscribe from junk mail, file mail in virtual folders to look up later and form to-do lists for responding to time-sensitive mail.

E-mail is broken, Mr. Davis and his co-founder, Evan Baehr, said, which is one reason that only about one-fifth of people choose to receive bills electronically. That is why they built an app for users to interact with postal mail separately from their in-boxes.

If there is a piece of mail you want physically, whether it’s the J. Crew catalog or a hand-drawn card from your niece, you can ask Outbox to deliver it. Otherwise, Outbox shreds and recycles it.

It all sounds very elegant for the user, but things get much more complicated from the company’s perspective. Outbox spent months interviewing 100 families about their habits and desires regarding mail.

Identity theft can occur when thieves dig through recycling bins and steal paper mail. So how can you protect yourself when you are paying someone to fetch your mail and open it? Outbox’s founders said the company carefully screens employees, even doing credit checks to make sure they do not have a motive to steal a customer’s identity, and has a $1 million insurance policy to protect customers if its safeguards don’t work. Digitized mail is on a secure site and paper mail is shredded.

For now, Outbox sends employees call “unpostmen” door-to-door to physically gather your mail and take it to a warehouse. (If your mailbox has a lock, you send them a photo of your key and they re-create it, a technical feat of its own.)

The idea of sending people door-to-door seems impossible to expand nationally. That is why Outbox is starting in dense cities, the founders said, and doing pickups just three days a week.

Its master plan is to partner with companies that send mail, like retailers and cable companies, or with the Postal Service. Then, catalogs, bills and other mail could be sent directly to Outbox.

In rural places where Outbox can’t afford to operate, people would at least have much less mail in their mailboxes because most would be digital, Mr. Davis said.

Mr. Davis and Mr. Baehr met at Harvard Business School and worked in Washington, where they said they developed the urge to try to solve big bureaucratic problems more quickly than bureaucracies do.

They talked to the Postal Service before starting, they said, but it moved too slowly for them.

Google Deal Gives Publishers a Choice: Digitize or Not

It was a small step forward for Google’s plan to digitize every book and make them readable and searchable online, known as the Google Library Project, but it did not resolve the much bigger issue standing in Google’s way — litigation between Google and authors.

Though the settlement will not change much about the way that Google and publishers already partner, it is the newest signpost for defining copyright in the Internet age. It is also the latest evidence of the shift to e-books from print, and of Google’s efforts to compete with e-book rivals like Amazon.com. Digital books were a new and daunting prospect when the publishers first sued Google seven years ago, but they have now become commonplace.

“They had this lawsuit hanging around for years, and basically the publishers have all moved on,” said James Grimmelmann, a professor at New York Law School who has closely followed the case. “They are selling digitally now. That’s the future. This just memorializes the transition.”

Thursday’s agreement, between Google and the Association of American Publishers, had been expected since last year. The publishers involved in the settlement are the McGraw-Hill Companies, Pearson Education, the Penguin Group, John Wiley & Sons and Simon & Schuster.

The deal allows publishers to choose whether to allow Google to digitize their out-of-print books that are still under copyright protection. If Google does so, it will also provide them with a digital copy for their own use, perhaps to sell on their Web sites.

For books that it has digitized, Google allows people to read 20 percent of them online and purchase the entire books from the Google Play store, and it shares revenue with the publishers. The two parties did not disclose additional financial terms of the agreement, but the publishers had not asked for monetary damages.

Google has been offering publishers the opportunity to sell digital books for years, and digitizing new books has become routine for publishers. But under the settlement, publishers get the benefit of Google digitizing out-of-print books that they might not otherwise have turned into e-books. Meanwhile, Google can expand the library of e-books it sells to consumers.

“What’s really exciting about today’s settlement is the fact that Google will be getting access to books that have long been out of print, that are in copyright,” said Tom Turvey, director of strategic partnerships at Google. “It’s good for users who weren’t able to buy them before, and for publishers.”

The settlement does not answer the question at the heart of the litigation between Google and publishers and authors — whether Google is infringing copyright by digitizing books. It essentially allows both sides to agree to disagree, and gives publishers the right to keep their books out of Google’s reach.

“We’re very pleased because the settlement acknowledges the rights and interests of copyright holders and publishers, and whether they’re going to make their rights available,” said Tom Allen, chief executive of the Association of American Publishers. But the bigger case, between Google and the Authors Guild, remains tied up in court. An agreement between those two parties will determine whether Google can move forward with its broader, more ambitious digitizing plan.

“That’s the lawsuit with high stakes,” Mr. Grimmelmann said.

The settlement with the publishers could help Google in that litigation, he said. “Maybe the fact that the publishers don’t think this is a lawsuit worth pursuing will help Google slightly,” he said.

The Authors Guild, once a partner of the publishers against Google, said Thursday that the publishers’ settlement did not resolve any of its issues with Google’s book-scanning project.

“The publishers’ private settlement, whatever its terms, does not resolve the authors’ copyright infringement claims against Google,” Paul Aiken, executive director of the Authors Guild, said in a statement. “Google continues to profit from its use of millions of copyright-protected books without regard to authors’ rights, and our class-action lawsuit on behalf of U.S. authors continues.”

The settlement also did not address the difficult issue of so-called orphan works — those that are still under copyright but whose copyright holder or author cannot be found.

The groups representing authors and publishers sued Google in 2005, arguing that its digital book-scanning violated their copyrights. After years of litigation, they agreed to a $125 million settlement, but it was rejected last year by a federal judge, Denny Chin, who said it went too far and raised copyright, antitrust and other concerns.

After that, the publishers and authors, who had partnered when negotiating with Google, split. While the authors remain in court, the publishers reached the agreement with Google privately, so it is not subject to court approval.

Julie Bosman contributed reporting from New York.

The Campaign to Digitize Your Wallet Is Intensifying

That’s hardly certain, because any company offering mobile payments faces a big challenge: convincing people that paying with a phone is safer and more convenient than using cash or a credit card.

But the partnership will clearly give a lot more exposure to Square, a company in San Francisco with about 300 employees, and to the idea of mobile payments in general.

Square isn’t yet near getting the big numbers it needs to become a mainstream replacement for the wallet. To date it has 75,000 merchants using its technology to accept payments. It refuses to disclose the number of consumers using its Pay With Square app, presumably because there aren’t enough to brag about.

“The biggest friction has been places to pay,” said Jack Dorsey, the founder of Square, in an interview. He said that with so many different companies trying to get a piece of the market, paying with a phone has been a “fragmented” experience. But the Starbucks partnership should widen the use of Square specifically, he said.

Indeed, businesses of all kinds, including big companies like Google, Microsoft and Sprint and small start-ups like GoPago and Scvngr, are hoping to profit from mobile payments — if only they can figure out what kind of system appeals to consumers and merchants.

Google has developed a mobile wallet app that uses a technology called near-field communication, which allows a phone to communicate wirelessly with a nearby cash register. GoPago has an app that lets customers place an order before arriving in a store; it shows up on a tablet on the merchant’s counter. Square offers businesses software for the iPad that shows pictures of nearby customers who are using the Pay With Square app on their smartphone, so all they have to do is state their name to pay for an item.

Starbucks stores will begin accepting a less ambitious form of Square payments this fall, when customers will be able to show a Square bar code on their smartphone at the register. The companies expect 7,000 Starbucks stores in the United States to be hooked up to the new system before the holiday season.

Starbucks has already been accepting mobile payments through its own bar code app. With one million app transactions a week, Starbucks is the most successful example of mobile payments to date, according to Denee Carrington, an analyst at the research firm Forrester. She said the partnership should make Square the biggest player in mobile payments.

“They’ve been working with the moms and pops of the world, small coffee shops and that kind of thing, but this certainly gives them another level of presence in the market,” Ms. Carrington said. “Now in addition to the neighborhood coffee shop, they’ll be at every corner of New York City.”

But not everyone is convinced that Square’s close relationship with a behemoth like Starbucks is such a good idea. Seth Priebatsch, chief executive of Scvngr, a start-up that offers a mobile payment app called LevelUp, said the move could risk alienating other big retailers.

Square has invited Howard D. Schultz, Starbucks’s chief executive, to its board. That would give the coffee company influence over how the payment system is developed, which could scare other big retailers away from adopting it, Mr. Priebatsch said.

“If I was Dunkin’ Donuts or 7-Eleven or Peet’s Coffee, I wouldn’t touch Square with a 10-foot pole,” Mr. Priebatsch said. “Giving one retail partner undue influence over a whole payment ecosystem is a dangerous precedent to set.”

Mr. Dorsey said he didn’t think of it that way. He said that for retailers considering a mobile payment system, what mattered most were the numbers of customers it brought to the table and the overall cost of operation.

“I don’t think this sets the tone in a negative way in those conversations,” he said. He added that retailers had been asking Starbucks for advice because of its success in innovations.

But if Starbucks was already so good at getting people to pay with their phones, why should it hand over the keys to someone else? Mr. Schultz said using Square might eventually help Starbucks reduce some of the expense of credit card transactions, known as interchange fees.

Square says that it makes moving money around more efficient by cutting out middlemen and dealing with a unit of JPMorgan Chase to handle its credit and debit card transactions, which helps lower costs. Mr. Dorsey explained that as a younger company, Square had the advantage of using newer technologies to improve the transactions process and save money. Square’s current fee for merchants is 2.75 percent of each transaction. Adding millions more purchases through Starbucks could improve efficiency further and bring that fee even lower, he said.

“A lot of the industry is working off legacy code from the ’70s,” Mr. Dorsey said. “All this has been rewritten, vetted and audited, and that allows us to be much more agile and reduce the overall cost of the system.”