eBay plans to
acquire Shopping.com in a $620m cash transaction aimed
at resuscitating the auction giant's slowing growth rate.
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.
the acquisition will help it funnel more bidders to eBay
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.
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."
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.
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.
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
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.
the Authour: Paul Festa writes for CNET News.com
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