EBay Buys StumbleUpon For $75 Million

EBay said Wednesday it acquired StumbleUpon, a company that helps people discover and share online content, for $75 million. StumbleUpon has 2.3 million members currently and over five million recommendations of websites, videos etc. a day; its user base is growing by 150% annually. StumbleUpon's founders and management team will remain in place, eBay said. While the Wall Street Journal says the acquisition is the latest sign eBay wants to expand beyond its online-auction business through acquisitions, it isn't clear exactly how StumbleUpon fits into eBay's plans. Red Herring speculates the company may use the acquisition to steer eBay users to buyers’/sellers' favorite web sites, or add other eBay users to one’s StumbleUpon friends, similar to how a user can rate another buyer or seller and see their past purchases. This would increase eBay page views and traction, and make it more of a social destination rather than just a place to buy stuff. EBay director Michael Buhr said in its press release, "StumbleUpon is a great fit within our goal of pioneering new communities based on commerce and sustained by trust." EBay could also recommend products based on one’s friends. In February, eBay acquired online ticket vendor StubHub Inc., and has previously acquired transaction facilitator Paypal and VOIP vendor Skype.

Sources: Press release, Wall Street Journal, Red Herring
Commentary: eBay Finally Stumbles Upon Media Acquisitions • TechCrunch • In Search of Auction Stocks • Evaluating Skype's Actual Contribution To eBay
Stocks/ETFs to watch: eBay Inc. (EBAY). Competitors: Amazon.com Inc. (AMZN), Google Inc. (GOOG), Yahoo! Inc. (YHOO). ETFs: Internet HOLDRs (HHH), First Trust Dow Jones Internet Index (FDN), NASDAQ 100 Trust Shares ETF (QQQQ)

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Comments

[Risk Arb]

I didn't realize that eBay owned StubHub. That purchase makes a lot more sense than this one in my opinion.