The online payment processor CyberSource Corp. said Wednesday that it will shut down BidPay.com Inc., its online auction payment system, at the end of the year.
It did not provide a reason for the decision in a press release issued late Wednesday. A spokesman said Thursday that he could not elaborate.
CyberSource said it would take one-time charges of $1.7 million to $2.7 million in the fourth quarter.
The Mountain View, Calif., company said in October that it was exploring alternatives for the auction system, which it bought in March 2006 from First Data Corp. for $1.8 million.
BidPay cut its transaction processing rates in September after the e-commerce companies Amazon.com Inc. and Google Inc. introduced competing online payment services.
Franco Turrinelli, an analyst at the investment bank William Blair & Co. LLC, said CyberSource recorded $2.25 million of operating losses on the auction system in the first three quarters, while bringing in only $400,000 of revenue.
"BidPay was a chance worth taking and a sound decision by management despite its ultimate failure," Mr. Turrinelli, who rates the stock "outperform," wrote in a note to clients on Thursday.
The shutdown also will enable CyberSource to focus on integrating the operation of Authorize.Net Holdings Inc., a Marlborough, Mass., rival it bought in November for $565 million, Mr. Turrinelli wrote.
