Shopping.com Purchase Could Boost EBay's Stagnant Growth - InformationWeek
IoT
IoT
News
News
6/2/2005
04:34 AM
50%
50%

Shopping.com Purchase Could Boost EBay's Stagnant Growth

The total number of unique visitors to eBay during April was up only 6% from a year earlier, whereas Shopping.com's unique visitor traffic grew 15% during the same period, according to market-research firm comScore Networks.

EBay Inc. plans to strengthen its position as the de facto online marketplace by purchasing comparison-shopping site Shopping.com for $620 million in cash.

The move is expected to give eBay sellers a wider audience to which it can market goods and enable visitors to Shopping.com's line of sites to see items up for auction on eBay when searching for goods using Shopping.com's comparison engine. It also is likely to result in comparison-shopping capabilities appearing on eBay in the future.

The addition of Shopping.com's sites could provide eBay with a much-needed shot of growth. The total number of unique visitors to eBay during April was up only 6% from a year earlier, whereas Shopping.com's unique visitor traffic grew 15% during the same period, according to market-research firm comScore Networks.

EBay has been limited by a search engine that crawls through only what's up for sale on the site, comScore VP James Lamberti says. With the acquisition, eBay visitors will have more products to choose from, creating a bigger marketplace. "Having this search portal as an asset will extend [eBay's] ability to engage consumers, and offer a way to monetize traffic where it might not have products or service currently," Lamberti says. "I think eBay's really smart to take advantage of the network effect of the eBay experience."

With a business model that emphasizes advertising, Shopping.com brings a new kind of revenue stream to eBay. To get that new revenue, eBay paid $21 a share for Shopping.com, a 20% premium over the $17.44 it closed at Wednesday for a market capitalization of $517 million. The company expects the acquisition to dilute its 2005 earnings due to incremental charges for stock-based compensation and the amortization of acquired assets.

The Shopping.com acquisition comes just two weeks after eBay acquired two European classified sites, Gumtree.com and Loquo.com, in its latest move to expand its global line of Web sites.

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
Comments
Newest First  |  Oldest First  |  Threaded View
2017 State of IT Report
2017 State of IT Report
In today's technology-driven world, "innovation" has become a basic expectation. IT leaders are tasked with making technical magic, improving customer experience, and boosting the bottom line -- yet often without any increase to the IT budget. How are organizations striking the balance between new initiatives and cost control? Download our report to learn about the biggest challenges and how savvy IT executives are overcoming them.
Register for InformationWeek Newsletters
White Papers
Current Issue
Top IT Trends for 2018
As we enter a new year of technology planning, find out about the hot technologies organizations are using to advance their businesses and where the experts say IT is heading.
Video
Slideshows
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Flash Poll