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CUC International
CUC (Comp-U-Card) International Inc. was a membership-based consumer services conglomerate with travel, shopping, auto, dining, home improvement and financial services offered to more than 60 million customers worldwide based in Stamford, Connecticut, US, and founded in 1973 by Kirk Shelton and Walter Forbes. In 1998, it became involved in a Securities and Exchange Commission investigation into what, at the time, was the biggest accounting scandal in corporate history.
Their main product, a shopping service, originally a membership telephone-based drop-ship service called Comp-U-Card begun in 1973, was made available online to users of The Source in the mid-1980s, and later CompuServe after its purchase of The Source. It later offered its Shoppers Advantage service on America Online, Prodigy, GEnie and Delphi as well. It was perhaps the first company conducting electronic commerce, although its web based service first went online in 1995.
CUC's main line of operations was its mail-order clubs such as Shopper’s Advantage, AutoVantage, Traveler’s Advantage and its Comp-U-Card program, and it had been trying to find a way to streamline its clubs and sell retail through a kind of interactive television. In an age before the internet and sites such as Amazon.com, this idea was innovative.
CUC went through various company presidents and lost a lot of money during the 1970s. By 1979, it was losing more than $2 million a year[citation needed]. By 1983, Forbes and his company had found investors such as Reader's Digest and Eckerd Drugs but had lost nearly $14 million. After licensing their "interactive shopping" idea in Europe, the Morgan Stanley group took CUC public in the United States in 1983 and raised $20 million.
During the 1980s and early 1990s, CUC continued to grow and acquire other companies. It made strategic deals with other entertainment, communication, retail and investment companies such as America Online and AT&T.[citation needed] and grew to have over 30 million customers via its mail order clubs.[citation needed] CUC did not make any large acquisitions until 1995. Before that time, all acquisitions were relatively small and strategic.
In February 1996, seeking to expand its operations into the field of interactive entertainment, CUC approached the software companies Sierra On-Line Inc. and Davidson & Associates Inc. It bought Sierra for $1.06 billion and Davidson for $1.14 billion, both in stock. These acquisitions allowed CUC, as a larger outlet, to streamline its distribution network. In addition, product placements and advertisements in these software companies' products allowed CUC to find new customers in demographics it had not previously reached.
In December 1997, CUC merged with HFS Incorporated. A competition was held internally at CUC, primarily among its senior marketing staff but open to all employees, to come up with a new corporate name. The winner was to receive dinner "anywhere in the world". No employee submission was selected to win, as the name of the company had already been decided. The new company was named Cendant. After the merger, Cendant retained its core business as a direct marketer and thereafter also specialized in hotel franchises, car rentals, travel agencies and its consumer software operations, Cendant Software. The merger of these two companies, which between them owned "a virtual monopoly in the worldwide market for full-service timeshare exchange services" according to the Federal Trade Commission, caused the FTC to require "the parties to divest one of their timeshare exchange companies to re-establish a viable competitor in the market".
After the April 15, 1998 disclosure of long‑running accounting fraud originating at CUC International, the company restructured its non‑core units. Cendant’s software publishing unit—comprising Sierra On‑Line, Davidson & Associates (including Blizzard Entertainment), Knowledge Adventure and related labels—was sold on November 20, 1998 to the French publisher Havas (then part of Vivendi) for up to $1 billion in cash; the division became Havas Interactive and later Vivendi Games. In July 2008, Vivendi Games merged with Activision to form Activision Blizzard. In October 2000, Cendant announced plans to spin off its individual membership and loyalty businesses, and on July 2, 2001 it instead outsourced and licensed those operations (including Cendant Membership Services and Cendant Incentives) to a new company, Trilegiant, under a long‑term agreement. In October 2005, Apollo Global Management acquired Cendant’s Marketing Services Division—including Trilegiant, Progeny, and CIMS—for about $1.8 billion, and the business was reorganized as Affinion Group, which was headquartered in the Stamford, Connecticut area.
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CUC International
CUC (Comp-U-Card) International Inc. was a membership-based consumer services conglomerate with travel, shopping, auto, dining, home improvement and financial services offered to more than 60 million customers worldwide based in Stamford, Connecticut, US, and founded in 1973 by Kirk Shelton and Walter Forbes. In 1998, it became involved in a Securities and Exchange Commission investigation into what, at the time, was the biggest accounting scandal in corporate history.
Their main product, a shopping service, originally a membership telephone-based drop-ship service called Comp-U-Card begun in 1973, was made available online to users of The Source in the mid-1980s, and later CompuServe after its purchase of The Source. It later offered its Shoppers Advantage service on America Online, Prodigy, GEnie and Delphi as well. It was perhaps the first company conducting electronic commerce, although its web based service first went online in 1995.
CUC's main line of operations was its mail-order clubs such as Shopper’s Advantage, AutoVantage, Traveler’s Advantage and its Comp-U-Card program, and it had been trying to find a way to streamline its clubs and sell retail through a kind of interactive television. In an age before the internet and sites such as Amazon.com, this idea was innovative.
CUC went through various company presidents and lost a lot of money during the 1970s. By 1979, it was losing more than $2 million a year[citation needed]. By 1983, Forbes and his company had found investors such as Reader's Digest and Eckerd Drugs but had lost nearly $14 million. After licensing their "interactive shopping" idea in Europe, the Morgan Stanley group took CUC public in the United States in 1983 and raised $20 million.
During the 1980s and early 1990s, CUC continued to grow and acquire other companies. It made strategic deals with other entertainment, communication, retail and investment companies such as America Online and AT&T.[citation needed] and grew to have over 30 million customers via its mail order clubs.[citation needed] CUC did not make any large acquisitions until 1995. Before that time, all acquisitions were relatively small and strategic.
In February 1996, seeking to expand its operations into the field of interactive entertainment, CUC approached the software companies Sierra On-Line Inc. and Davidson & Associates Inc. It bought Sierra for $1.06 billion and Davidson for $1.14 billion, both in stock. These acquisitions allowed CUC, as a larger outlet, to streamline its distribution network. In addition, product placements and advertisements in these software companies' products allowed CUC to find new customers in demographics it had not previously reached.
In December 1997, CUC merged with HFS Incorporated. A competition was held internally at CUC, primarily among its senior marketing staff but open to all employees, to come up with a new corporate name. The winner was to receive dinner "anywhere in the world". No employee submission was selected to win, as the name of the company had already been decided. The new company was named Cendant. After the merger, Cendant retained its core business as a direct marketer and thereafter also specialized in hotel franchises, car rentals, travel agencies and its consumer software operations, Cendant Software. The merger of these two companies, which between them owned "a virtual monopoly in the worldwide market for full-service timeshare exchange services" according to the Federal Trade Commission, caused the FTC to require "the parties to divest one of their timeshare exchange companies to re-establish a viable competitor in the market".
After the April 15, 1998 disclosure of long‑running accounting fraud originating at CUC International, the company restructured its non‑core units. Cendant’s software publishing unit—comprising Sierra On‑Line, Davidson & Associates (including Blizzard Entertainment), Knowledge Adventure and related labels—was sold on November 20, 1998 to the French publisher Havas (then part of Vivendi) for up to $1 billion in cash; the division became Havas Interactive and later Vivendi Games. In July 2008, Vivendi Games merged with Activision to form Activision Blizzard. In October 2000, Cendant announced plans to spin off its individual membership and loyalty businesses, and on July 2, 2001 it instead outsourced and licensed those operations (including Cendant Membership Services and Cendant Incentives) to a new company, Trilegiant, under a long‑term agreement. In October 2005, Apollo Global Management acquired Cendant’s Marketing Services Division—including Trilegiant, Progeny, and CIMS—for about $1.8 billion, and the business was reorganized as Affinion Group, which was headquartered in the Stamford, Connecticut area.