If you were eBay Inc. (NASDAQ: EBAY) you would have several good reasons for paying $75 million for StumbleUpon, right? I know that if I was eBay I myself would need significant justification for paying that amount of money for a social discovery site. Since May 30, 2007 when eBay announced that a deal had been reached for the purchase of StumbleUpon, more news from the company about that acquisition and any underlying reasons has been absent.
Everyone, from analysts to kids with frogs in their pockets, has been waiting for some manner of revelation regarding eBay's reason for buying StumbleUpon. Because there seem to be few concrete explanations about why this deal took place, I decided to throw my hat in. eBay bought bodies, that's it.
eBay bought a user base of about 2.5 million users to augment its own membership numbers. StumbleUpon came into the deal with nothing to offer eBay beyond user names. Although StumbleUpon is quite a fun place, it has nothing which will breath new life into an auction site. If eBay had interesting plans or a measurable strategy to make use of StumbleUpon in any tangible way, it would be trumpeting those facts everywhere, but from where I sit the silence is deafening.
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Reader Comments (Page 1 of 1)
6-20-2007 @ 12:50AM
Randy Smythe said...
I think they have a few other things on their plate. There's no need to say anything right now as StumbleUpon continues to run as a separate company.
It must be a slow news day.
6-21-2007 @ 12:26PM
Jeff said...
it may be appropriate to assume that eBay bought stumbleupon with (gasp) no intention of incorporating it into the auction site.
eBay bought a good business. StumbleUpon is great at finding some of the best websites, rated by people, not algorithms.
6-20-2007 @ 1:50PM
firemeg said...
Gary - good reasoning, not sure that is all there is to it though. If you're thinking that eBay plans to use those membership numbers and add them to the eBay numbers, I don't think that will happen.
My personal opinion is that eBay bought the hope of ad revenue. Stumbleupon is still growing quite rapidly. The site uses Google Adsense ads (pay-per-click and pay-per-impression). I think eBay knows that the auction market is grinding to a halt in growth while social networking sites are all the rage. eBay has lost numerous positions in traffic rank to such sites. I think Meg & Co. are hoping that SU takes off like other social sites so at least if it does (and takes traffic away from eBay.com in the process) at least eBay has a part of that action - rather than a competitor.
6-21-2007 @ 12:50AM
Martin said...
Good points by the posts above. I think maybe Ebay is spending their time working rather than making comments, what is there to say right away? If the "markets are confused" there are really bigger worries like how noone understands what has really been happening with the economy for the last few years and how only now media like BusinessWeek (article on the real cost of outsourcing, ooops someone goofed) are starting to come forward. EBay is a great company that is back on track. All of its aquisitions have done well over time. They are facing a tougher march forward though. As auction growth matures and the US economy is stagnant (at best) growth will be difficult but if anyone can pull it off its eBay. -Marty
http://squidoo.com/growyourebaystoresales
http://Onceuponabid.com