I love acquisitions where the acquirer spends millions of dollars of shareholders' money but won't deign to explain why. eBay seems to be on the buy side of many of those deals and the online auctioneer announced another one today with its $75 million cash purchase of StumbleUpon.
The well-informed reporter that actually broke news of the official announcement earlier today doesn't even understand eBay's motivation. Om Malik wrote, "The rationale behind the deal will emerge in time." Maybe. Maybe not. I'm still waiting for an explanation of eBay's $2.6 billion Skype acquisition. Most theories about its latest deal center on the company leveraging StumbleUpon's toolbar and growing user base to enter the search market.
But why should eBay make it a guessing game? The transaction is public. The price is public. eBay and StumbleUpon are both consumer facing businesses that are well understood by the public. Despite all of that transparency, eBay has decided to turn its dealmaking strategy into a guessing game. It's hard to laud these sorts of transactions.
Tags: ebay, stumbleupon, vc, venture+capital
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I'm not sure what drove eBay's acquisition of StumbleUpon, although StumbleUpon certainly, as a discovery engine, could ultimately be applied to discovering sales and auctions where you would otherwise have just paid retail price.
Still, StumbleUpon is suffering as I explain in a recent post:
http://www.leveragingideas.com/?p=337