EBay has made new acquisitions in the classifieds and online payments areas. The firm picked up online payments firm Bill Me Later for $945 million in cash and options, and it bought Danish classifieds player Den Bla Avis (dba.dk) and BilBasen (bilbasen.dk) for $390 million cash.
Additionally, eBay announced global layoffs of approximately 1,000 employees — 10 percent of its workforce. On top of the staff cuts, eBay will end contracts with hundreds of temps.
EBay entered the classifieds space four years ago, when it took a 25 percent stake in Craigslist. It now claims to operate classifieds sites in 20 countries and says the business area has enjoyed annual growth of over 60 percent. Its classifieds properties include Marktplaats (Netherlands), Kijiji (U.S.), Gumtree (UK), and a 25 percent stake in Craigslist.
Bill Me Later’s billing system allows Web retailers to offer shoppers a deferred payment option. Approximately 1,000 online stores — including Amazon, Apple, JetBlue, and WalMart.com — display the “Bill Me Later” button on their checkout pages.
John Donahoe, eBay’s president and CEO, said this morning that the company has been in talks with Bill Me Later for “a couple of years.” He said the firm brings to its PayPal unit a complementary merchant base with very little overlap.
“PayPal and Bill Me Later belong together,” Donahoe said.
EBay has a patchy history with acquisitions, having been roundly criticized for its $2.6 billion purchase of Skype in 2005. More recently the company has been rumored to pursue a sale of StumbleUpon, which it acquired in spring 2007.
There’s also the question of the economy. Is it wise to do these deals now? Quite, according to Donahoe.
“In times like this, stronger companies get stronger, and that’s exactly what these acquisitions will help us do.” he said. “We’re extending our lead and more competitively positioning our company for the future.”
Dba.dk and BilBasen.dk will keep offices in Aarhus and Copenhagen, Denmark. EBay’s Larry Illg, global classifieds general manager, will oversee the business in Denmark and lead the integration of the two sites.
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