Posted on October 6, 2008 at 12:34 PM
Filed under: Acquisitions | Corporate Strategy | Deal International | Divesting and Restructuring
Tagged: bilbasen.dk , Bill Me Later , dba.dk , eBay , Gumtree , Kijiji.com , LoQUo , Marktplaats , PayPal

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To create a more agile company, eBay Inc. plans to reduce its global workforce by about 10%, affecting around 1,000 employees in addition to several hundred temporary workers. It's also continuing to expand beyond its core auction site. Looking for more profitable endeavors, eBay acquired Denmark's leading online classifieds site dba.dk and vehicles site bilbasen.dk for approximately $390 million in cash.

Classifieds

According to research and consulting firm Classifieds Intelligence, the worldwide classified ads industry tops $100 billion in all forms. That's good news for eBay, seeing how its auction site profits are growing much slower than in years past amid a struggling economy. eBay said for the second quarter of 2008, its global classifieds business reported revenue growth of 65% over the same period last year and averaged 81 million unique visitors per month, representing an increase of 121% year-over-year. eBay's current classifieds portfolio includes Marktplaats, Kijiji, LoQUo, Gumtree and mobile.de.

Bill Me Later

The online auctioneer is also acquiring Towson, Md.-based online payments business Bill Me Later for about $820 million in cash and around $125 million in outstanding options. eBay plans to combine Bill Me Later with its PayPal business, the number one online-oriented payments brand. Bruce Cundiff, director of payments research and consulting for Javelin Strategy & Research, said in a statement "Bill Me Later has adoption among the most popular large merchants on the Web, and PayPal is the way that many small merchants and eBay sellers accept payments online." eBay expects the deal to be accretive in 2011.
- Baz Hiralal

Job cuts at eBay
Read about the classifieds acquisitions
Read about the Bill Me Later acquisition
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