eBay Looking to Sell StumbleUpon

Includes: DB, EBAY
by: Ron Haruni

TechCrunch is reporting that eBay (NASDAQ:EBAY) has recruited Deutsche Bank (NYSE:DB) in the hopes of finding a suitable buyer for StumbleUpon, the venerable website that allows its users to discover and rate Web pages, photos, and videos.

StumbleUpon as a personalized recommendation engine, according to Comscore, had nearly 1.3 million global visitors and 25 million page views this past July. About a year earlier, the site was registering over 4.3 million global visitors and more than 30 million page views.

In May 2007, Internet auction site eBay bought StumbleUpon, which was founded in 2001 by three Canadian software engineers in Calgary, for $75 million. Early reports indicated the company was also in talks with Google (NASDAQ:GOOG) before the eBay announcement. The deal, meant at the time that eBay would get access to almost 2.5 million registered users, delivering about 5 million recommendations every day.

Obviously, eBay’s acquisition has not produced the desired results and it appears the Internet auction site has a bit of buyer’s remorse. The expectation on part of eBay was that by promoting StumbleUpon on eBay and to Skype users could massively boost its user base. Things apparently haven’t materialized, thus pushing eBay to put the ‘for sale’ sign up.

Nevertheless, considering StumbleUpon is an Internet favorite, it wouldn’t be a surprise if eBay gets to resell it for what it paid originally. After all, the higher the number of registered users there are increases the company’s value. TechCrunch points out that StumbleUpon’s registered users have continued to rise steadily; the service had five million in April ‘08. As of this evening, the site shows over six million, a 20% rise in less than five months.

Disclosure: None