Known as a magnet for online bargain hunters, eBay has done a little shopping of its own, snapping up a pair of classified advertising sites and a leading online payments service for a total of about $1.4 billion.
The acquisitions were expected, as eBay aggressively moves to expand its online footprint and offset flagging sales on its core eBay.com site.
eBay's purchases coincide with the elimination of 1,600 jobs—or 10 percent of its workforce. eBay explains that the cuts will save about $150 million a year, and free up resources to focus on growth areas like online payment services and classifieds.
Recently, top eBay executives indicated the company would tap into its deep cash reserves to buy out top classifieds sites in targeted industries and geographic markets.
This week, eBay announced it acquired classified site Den Bla Avis and vehicle specialist BilBasen for $390 million, further strengthening its market position in Denmark, and expanding its online classifieds business to more than 20 countries. Combined, the sites generate more than 180 page views per month, the company says.
"Classifieds are the preferred e-commerce format in Denmark, and represent an attractive and growing market," said Jacob Aqraou, general manager of eBay's global classifieds business unit. "With more than 25 years of classifieds success in Denmark, Den Bla Avis and BilBasen are household names with Danish consumers and we're very excited to welcome them and all of their employees to the eBay global classifieds portfolio."
At the same time, eBay moved to solidify the market leadership of its PayPal online payments subsidiary by acquiring Bill Me Later—the no. 2 online payments brand—for a total of $945 million in cash and stock. The company plans to integrate the two payment services to allow PayPal users to defer payments and receive promotional financing services.
According to John Donahoe, eBay's president and chief executive, PayPal and Bill Me Later "belong together."
Gary Marino, chief executive of Bill Me Later, will continue to run the company as a business unit of PayPal.
Auctiva staff writers constantly monitor trends and best practices of those selling on eBay and elsewhere online. They attend relevant training seminars and trade shows and regularly discuss the market with PowerSellers and other market experts.
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