eBay tries again . . . with a big acquisition


According to a report from the 451 Group, the third quarter was horrible for tech M&A. With the financial crisis, it's tough to get buyers interested in deals.

But, today we got some relief; that is, eBay (NASDAQ: EBAY) agreed to shell out $820 million in cash for Bill Me Later. In fact, the company also paid $390 million for bilbasen.dk, which is a leading classifieds operator in Denmark.

At the same time, eBay plans to slash 10% of the workforce (amounting to about 1,000 employees). With an impending global recession, the environment is likely to be pretty bad for consumer platforms.

Thus, with the Bill Me Later transaction, there may be some traction -- especially with the PayPal business. But again, eBay will need to demonstrate skill with integration (which can be particularly tough in the tech world). Besides, eBay's M&A track record has been spotty, specially since its Skype deal.

Bill Me Later will certainly be costly. While the company is growing quickly, its revenue is only $150 million. Besides, the deal will dilute eBay's 2009 earnings by 6 cents to 13 cents per share. Also, might the credit crunch result in some problems for Bill Me Later?

More importantly, eBay announced that revenue will be at the low end of its forecast for Q3. In other words, the company realizes it needs to make some big moves to keep up the momentum.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He is also the founder of BizEquity, a valuation website

Reader Comments (Page 1 of 1)

Symbol Lookup
IndexesChangePrice
DJIA-80.4115,307.17
NASDAQ-38.823,463.30
S&P 500-13.811,655.35

Last updated: May 22, 2013: 05:02 PM

Hot Stocks

General Electric

23.86+0.20(+0.85)

Alcoa

8.69-0.07(-0.80)

Apple Inc

441.354+1.694(+0.39)

Google Inc 'A'

889.42-17.55(-1.93)

Bank of America

13.31-0.13(-0.97)

Wal-Mart Stores

77.03-0.36(-0.47)

Exxon Mobil Corp

92.19-0.61(-0.66)

Ford

14.97+0.02(+0.13)

Citigroup

51.00-0.66(-1.28)

IBM

206.99-1.66(-0.80)

Yahoo

26.54-0.46(-1.70)

Starbucks

64.15-0.10(-0.16)

Microsoft

34.61-0.24(-0.69)

Home Depot

79.69+0.98(+1.25)

DailyFinance Headlines

Benzinga Headlines

TheFlyOnTheWall.com Headlines

BioHealth Investor Headlines

WalletPop Headlines

DailyFinance BlackBerry App

My Portfolios

Track your stocks here!

Find out why more people track their portfolios on AOL Money & Finance then anywhere else.

BloggingStocks Partners

More from AOL Money & Finance

BioHealth Investor Headlines

Page Loaded in 1369256554113 ms.