EBay to Acquire Shopping.com for $620M
By RACHEL KONRAD,
AP Technology Writer
21 minutes ago
EBay Inc. said Wednesday it would acquire comparison shopping and consumer review site Shopping.com Inc. for about $620 million in cash.
Executives at the San Jose, Calif.-based online auction giant said the purchase, expected to be completed in the third quarter of 2005, puts eBay sellers in touch with a new set of potential buyers and boosts the number of fixed-price sales listings, which are growing more popular with online shoppers.
The deal also expands the auctioneer's efforts to provide more reviews and customer feedback about products listed on the site. Brisbane, Calif.-based Shopping.com controls Epinions, a site containing more than 400,000 amateur reviews on items ranging from computer servers to mountain bikes.
The acquisition caps an aggressive buying spree at eBay, one of the world's largest e-commerce companies and a rare dot-com survivor in Silicon Valley's five-year economic downturn.
In December, eBay purchased the privately held Santa Monica, Calif.-based real estate firm Rent.com for about $415 million in stock and cash.
Many of its biggest deals in the past year have been abroad. EBay revenue outside of the United States last quarter was $393.8 million, up 52 percent from the same period in 2004.
Last year, eBay purchased India's most popular online shopping site, Baazee.com, for $50 million, and it bought the leading Dutch classified site, Marktplaats.nl, for about $290 million. In September, it increased its stake in Internet Auction Co., South Korea's largest online auction company, with an investment of more than $325 million.
In 2003, eBay completed its purchase of China's largest e-commerce site, EachNet, for $150 million, after an initial investment of $30 million. EBay is adding new users in China faster than those in any other country and now ranks as the No. 1 e-commerce company there.
But a senior executive said the Shopping.com deal shows that the company is still committed to expanding its audience the United States, which isn't considered a high-growth market but remains by far the world's largest for both online and traditional retailers.
"The intent of the Shopping.com acquisition was to aid eBay's overall global marketplace, but it does indicate that we are still strongly investing in the U.S. business," said Bill Cobb, president of eBay North America, in a phone interview Wednesday afternoon.
According to the terms of the deal, eBay will acquire all outstanding shares of Shopping.com stock for $21 per share in cash, a premium over its $17.44 close on NASDAQ Wednesday, before the deal was announced.
The stock closed regular trading up 37 cents, or about 2 percent. In after hours trading, it gained $3.46, or nearly 20 percent, and traded at $20.90.
The total purchase price would be about $620 million, based on the number of Shopping.com shares outstanding as of Tuesday.
Lorrie Norrington, president and CEO of Shopping.com, said the 220-person company doesn't plan to lay off workers because of the deal. EBay, which employs about 9,000 people, will absorb the Shopping.com workers.
"Our message has been that this is all about growth," Norrington said Wednesday.
EBay stock gained $1.11, or nearly 3 percent, and closed NASDAQ trading Wednesday at $39.11. In after-hours trading, it lost 33 cents, or less than 1 percent, and traded at $38.78.
On the Net:
Copyright ¬© 2005 The Associated Press.