What will eBay do with StumbleUpon? May 9, 2007Posted by John in Technology.
Auction-site eBay is in advanced talks to buy StumbleUpon, the internet-company that helps people discover web pages that match their interests, The Wall Street Journal reports today. Vauhini Vara and Kevin J. Delaney writes that the potential price for a deal is in the range of $75 million.
The report raises many thoughts. If the deal goes through, are we watching eBay‘s big move into new markets? Is eBay looking to expand and eventually compete with the protein-drinkers at Google? How would StumbleUpon be integrated with eBay’s core business and previous acquisitions of Paypal and Skype? What is eBay’s game-plan??
At TechCrunch – were rumors of the deal were first reported in mid-April – Duncan Riley describes the move as interesting. “Paypal was core to eBay’s Auction business. Skype could be justified as a tie into the Auction business as well. So where does StumbleUpon sit? People “stumbling” from site to site with a business model the revolves around selling page views seems like an odd fit,” he writes.
At GigaOM Om Malik says that the move could not be more soon enough: “How many of us think of eBay and think “OLD SCHOOL”… I know I do and so do many of my readers,” he writes. “StumbleUpon and their offshoot STUMBLEVIDEO is part of a new breed of WEB 2.0 sites that could well have the title WEB 3.0 attached to their names…….”
For a thorough analysis of the potential deal and how StubleUpon could fit into eBays framework, look at Scot Wingos post at eBay Strategies. Also don’t miss Om Maliks April-post on the potential deal from the toolbar-and-Skype lens. And if you don’t buy it, look at Tech-writer Mathew Ingrams blog, he says the deal doesn’t make sense for eBay. “When the rumours first surfaced I wrote a post saying that I didn’t get it, and I still don’t,” he notes.
Another issue is the financial side of the deal. Money makes the world go around. Duncan Riley writes that $75 million will make a tidy profit for investors, noting that StumbleUpon previously only has raised $1.5 million in a single round of seed financing. Om Malik argues that $75 million is not too much for Ebay to “tell their competition that they have decided to wake up, smell the coffee and get with it”. At HipMojo blogger Froosh writes that $50 million or $75 million is a “great exit” and adds that Stumble Upon is a clever application.
It remains to find out if these rumors are well-grounded or just – rumors. Stay tuned.
By John Furrier and Tina Magnergard Bjers