Ebates

Ebates, now operating as Rakuten Rewards, pioneered a straightforward yet powerful business model centered on affiliate marketing. The company was established in 1998 by Alessandro Isolani and Paul Wasserman, two former deputy district attorneys from San Mateo County. Initially funded by Foundation Capital, the duo left their legal careers to venture into the dot-com world, launching Ebates.com on May 3, 1999. Their core idea was to share the affiliate commission they received from partner stores with consumers, offering cash back on purchases made through their platform.

The business operates by forming partnerships with retailers who pay a commission for sales driven through the Rakuten platform. When a consumer starts their shopping journey on the Rakuten website or app and clicks through to a partner retailer to make a purchase, Rakuten earns a referral fee. A significant portion of this commission is then passed back to the consumer as cash back, creating a mutually beneficial system for all parties involved. The retailer acquires customers, the consumer saves money, and Rakuten retains a portion of the commission as revenue. This model applies to a vast network of over 3,500 stores, both online and, in recent years, offline. Payments are sent to users quarterly via check or PayPal once their cash back balance exceeds a minimum threshold.

The service itself is delivered through a website, a mobile app for iOS and Android, and a browser extension. The browser extension is a key feature, automatically alerting users to cash back opportunities when they visit a partner retailer's site and even applying coupons. This frictionless experience encourages user engagement and drives traffic to partner merchants. Initially, Ebates offered up to 25% cash back from about 40 retailers. In 2013, members spent over $2.2 billion shopping through the platform. A major milestone in the company's history was its acquisition by Japanese e-commerce giant Rakuten, Inc. in September 2014 for $1 billion in cash. Following the acquisition, the Ebates brand was phased out and officially became Rakuten Rewards in 2019.

Keywords: Ebates, Rakuten Rewards, cash back, affiliate marketing, e-commerce, online shopping, customer loyalty, coupons, discounts, shopping rewards, referral program, Paul Wasserman, Alessandro Isolani, Rakuten acquisition, loyalty program, online marketplace, retail partnerships, browser extension, mobile shopping app, consumer savings