eBay Buys Final 50% of Magento, Adds Another Platform on the Pile

| About: eBay Inc. (EBAY)
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eBay (NASDAQ:EBAY) announced yesterday that they are acquiring the last 51% of e-commerce platform Magento. This makes at least the fifth e-commerce platform now available/owned/in process of being owned by eBay including:

  1. eBay stores
  2. Prostores
  3. GSI's old platform
  4. GSI's new platform
  5. Magento

In a video, Donahoe talks about integrating Magento into something called X.commerce. The press release has this blurb, sounds like we won't know what's going on and which platforms 'survive' until October:

X.Commerce, eBay’s newly created integrated open commerce platform group, is focused on leveraging the company’s assets and partner technologies to build a strong, robust developer community as a resource for merchants and retailers of all sizes. More details will be shared with developers during the X.Commerce Innovate conference on Oct. 12-13 in San Francisco.

Congrats to Roy Rubin and the team at Magento - it will be interesting to see which platform eBay standardizes on (It clearly doesn't make sense to have five platforms). Magento has had a hard time scaling and getting large retailers on-board and even small retailers, so it will be interesting to see which of these possible strategies eBay uses:

  • Dump Magento all together (unlikely)
  • Replace GSI's platform with Magento (GSI is based off intershop which is old technology)
  • Dump prostores (highly likely, this thing is a real dud)
  • Keep a bunch of platforms (most likely - they will have magento for small retailers and GSI for large and try and standardize on those two)

This is interesting news for the other e-commerce providers out there as well such as ATG/Oracle, IBM/Websphere, Demandware, Venda and Y! Stores as clearly eBay sees this as an area it wants to play a role.

What does eBay running your e-commerce site mean?

We're already getting a lot of questions for eBay sellers that have Magento stores that are upset by the move. Many of them were hoping to diversify from eBay with a Magento store only to find that strategy is now cut off. Frequent concerns include:

  • If my eBay DSRs are low, will eBay/Magento now hamper my e-commerce sales?
  • What if I am kicked off eBay - will you kick me off Magento/eBay/Paypal family?

The one thing that is certain, everyone in the world of e-commerce lives in interesting times! Let me know your thoughts in comments where we can discuss. I guess we'll all know more in October.

Disclosure: Scot Wingo is CEO of ChannelAdvisor, which has eBay as an investor.