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eBay plans to acquire Shopping.com in a $620m cash transaction aimed at resuscitating the auction giant's slowing growth rate.
The acquisition, announced yesterday, brings the web's biggest comparison shopping engine under the hood of the largest auction site at a time when eBay has been struggling to maintain its growth in the face of increasing competition from Google, Yahoo! and others.
eBay said the acquisition will help it funnel more bidders to eBay auctions.
An eBay spokesman said: "What we think this does is it helps us meet the evolving needs of our sellers. That's the big motivation for us. The central reason we made this acquisition is to provide sellers with a new channel for selling and a new set of buyers."
Analysts said larger growth concerns inspired the buy.
Saikat Chaudhuri, assistant professor of management at the University of Pennsylvania's Wharton School, said: "In the last year, eBay hasn't had the kind of growth it had in the past. That's very logical, because you see a certain amount of maturation in the industry, and Yahoo! was getting into their space and Google is playing around with Froogle comparison shopping. So they're all competing with each other, and eBay is looking for a way to grow in terms of adding customers and broadening its portfolio."
The acquisition puts eBay in close competition with the commercial engines of search giants Google and Yahoo!. The deal also is a sure sign of eBay's financial interest in the booming search-engine marketing business, which is expected to be worth more than $5bn this year.
Similar to Google and Yahoo!, Shopping.com makes money from advertisements that appear adjacent to related search results. But unlike rivals, its sole specialty is in listing prices of commercial goods sold across the web.
eBay declined to say how the two websites might be integrated. But the spokesman said it was "fair to say" that eBay was looking into ways to get more eBay auction listings into Shopping.com search results.
"Shopping.com is a complementary platform," he said. "They do certain things very well, and the one group of sellers for whom the platform could be very interesting is those who experiment with new and in-season products, which you can find in any store and in multiple places online. Those are the kinds of items people would be very likely to use a shopping comparison site to find."
eBay said it expects Shopping.com's Epinions site for consumer reviews will complement its own "community feedback-driven marketplace". Headquartered in Brisbane, California, and with offices in Netanya, Israel and London, Shopping.com has sites for France, the UK and the US. The company cited ComScore Media Metrix in claiming about 50 million distinct visitors every month.
The two companies said they expect the deal to close in the third quarter following regulatory approval and a vote by Shopping.com shareholders. Shopping.com, which said it has about $140m in cash, cash equivalents and marketable securities as of 31 May, went public in October.
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Paul Festa writes for CNET News.com
The acquisition, announced yesterday, brings the web's biggest comparison shopping engine under the hood of the largest auction site at a time when eBay has been struggling to maintain its growth in the face of increasing competition from Google, Yahoo! and others.
eBay said the acquisition will help it funnel more bidders to eBay auctions.
An eBay spokesman said: "What we think this does is it helps us meet the evolving needs of our sellers. That's the big motivation for us. The central reason we made this acquisition is to provide sellers with a new channel for selling and a new set of buyers."
Analysts said larger growth concerns inspired the buy.
Saikat Chaudhuri, assistant professor of management at the University of Pennsylvania's Wharton School, said: "In the last year, eBay hasn't had the kind of growth it had in the past. That's very logical, because you see a certain amount of maturation in the industry, and Yahoo! was getting into their space and Google is playing around with Froogle comparison shopping. So they're all competing with each other, and eBay is looking for a way to grow in terms of adding customers and broadening its portfolio."
The acquisition puts eBay in close competition with the commercial engines of search giants Google and Yahoo!. The deal also is a sure sign of eBay's financial interest in the booming search-engine marketing business, which is expected to be worth more than $5bn this year.
Similar to Google and Yahoo!, Shopping.com makes money from advertisements that appear adjacent to related search results. But unlike rivals, its sole specialty is in listing prices of commercial goods sold across the web.
eBay declined to say how the two websites might be integrated. But the spokesman said it was "fair to say" that eBay was looking into ways to get more eBay auction listings into Shopping.com search results.
"Shopping.com is a complementary platform," he said. "They do certain things very well, and the one group of sellers for whom the platform could be very interesting is those who experiment with new and in-season products, which you can find in any store and in multiple places online. Those are the kinds of items people would be very likely to use a shopping comparison site to find."
eBay said it expects Shopping.com's Epinions site for consumer reviews will complement its own "community feedback-driven marketplace". Headquartered in Brisbane, California, and with offices in Netanya, Israel and London, Shopping.com has sites for France, the UK and the US. The company cited ComScore Media Metrix in claiming about 50 million distinct visitors every month.
The two companies said they expect the deal to close in the third quarter following regulatory approval and a vote by Shopping.com shareholders. Shopping.com, which said it has about $140m in cash, cash equivalents and marketable securities as of 31 May, went public in October.
--------------------------------------------------------------------------------
Paul Festa writes for CNET News.com
