EBay to Buy Shopping.com

  |  June 1, 2005   |  Comments

The $620 million deal brings together two major players that help retailers market themselves online.

EBay has agreed to acquire shopping search player Shopping.com in a deal valued at $620 million. It's a move that consolidates two major outlets for retailers seeking to market their wares online.

The agreement calls for eBay to pay $21 per share of Shopping.com stock, which was priced at $17.44 per share at Wednesday's market close.

The companies painted the deal as a way to expand what they can offer to merchant partners.

"The acquisition of Shopping.com will allow us to provide even more opportunities for our sellers," said Bill Cobb, president of eBay North America, in a statement.

EBay plans to integrate its listings into Shopping.com's search results, giving the auction site's sellers access to a new audience. Shopping.com's merchants, meanwhile, will gain additional traffic and leads from eBay, the companies said. Shopping.com retailers generally pay on a cost-per-click basis, while eBay sellers pay a fee plus a percentage of the sales price. EBay also offers its sellers other opportunities to highlight their listings, including keyword-targeted ads.

EBay in recent months has moved to aggressively expand beyond its roots as an auction site for small merchants, making a number of investments in the classifieds space. Last month, its recently launched free classifieds division, Kijiji, bought two European competitors. The company also bought Rent.com earlier this year, and it owns a stake in Craigslist.

Shopping.com, for its part, has expanded beyond products to services recently, launching a beta of shopping search for mortgages last month. Meanwhile, the company's business has been growing dramatically. When it reported first-quarter earnings in April, the company said it experienced 38 percent growth in revenue and 72 percent growth in net income over the same period in 2004.

The deal, which must be approved by regulators and by Shopping.com shareholders, is expected to close in the third quarter of this year.

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ABOUT THE AUTHOR

Pamela Parker

Pamela Parker is a former managing editor of ClickZ News, Features, and Experts. She's been covering interactive advertising and marketing since the boom days of 1999, chronicling the dot-com crash and the subsequent rise of the medium. Before working at ClickZ, Parker was associate editor at @NY, a pioneering Web site and e-mail newsletter covering New York new media start-ups. Parker received a master's degree in journalism, with a concentration in new media, from Columbia University's Graduate School of Journalism.

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