eBay tries again . . . with a big acquisition

Tom Taulli — Mon, 06 Oct 2008 10:13:00 EST

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

eBay tries again . . . with a big acquisition originally appeared on BloggingStocks on Mon, 06 Oct 2008 10:13:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments

Amazon.com to use 'Bill Me Later' as payment option

Brian White — Wed, 12 Dec 2007 14:50:00 EST

Filed under: Products and Services, Competitive Strategy, Amazon.com (AMZN)

Amazon.com (NASDAQ: AMZN) has always been at the forefront of making purchasing from its ubiquitous website as easy as possible. From the early days of one-click shopping, the retailer has made the process of buying merchandise super easy.

Well, it just got easier for those who want to purchase products but have no desire to pay for them immediately.

The world's largest e-tailer signed an agreement with Bill Me Later Inc. to let customers purchase products and be billed for them at a later date. In an interesting twist, Amazon.com also purchased an equity stake in Bill Me Later as well, although the size of the stake is not known.

With the enormous reach of Amazon.com has, is this payment alternative needed? From an economic standpoint, yes. Any payment avenue Amazon.com offers just makes it that much easier to increase sales to a contingent of customers who want a huge array of payment options (for better or worse). The Bill Me Later deal is expected to close in the first quarter of 2008 and should be available as a payment option at Amazon.com shortly thereafter.

Amazon.com to use 'Bill Me Later' as payment option originally appeared on BloggingStocks on Wed, 12 Dec 2007 14:50:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments