eBay Close to Acquiring StumbleUpon
Duncan Riley
38 comments »
First reported here at TechCrunch on April 18, eBay is now said to be close to finalizing its deal to acquire StumbleUpon for $75 million, according to a new online report from the Wall Street Journal.
The high flying startup has been rumored to be in acquisition talks since November .
The Wall Street Journal report quotes an insider saying that no final agreement has been reached and that talks could still fail.
The StumbleUpon had 2.1 million users as of April, up from 1.7 million in December 2006. 4+ million sites are “stumbled” daily.
The purchase price of $75 million will make a tidy profit for investors who include Ram Shriram and Lotus Development Corp. founder Mitch Kapor: StumbleUpon has only raised $1.5 million in a single round of seed financing previously.
The $75 million is on the high side of our initial range of $40-$75 million. Was there another bidder? Did Google and AOL stake a claim only to be trumped by eBay?
If the deal is finalized it’s an interesting move by eBay. 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. A sign that eBay is looking to expand into new markets perhaps? Time will tell.
… and also Josh Kopelman / First Round Capital likely to benefit.
SU is a First Round company, and guessing Josh’s connections to eBay (via Half.com) may have helped make that happen…?
The reported price has risen from $45 million to $75 million and I’m still not clear that eBay will be able to use the site to strategic gain. How many stumbles leading to eBay auctions does it take for people to uninstall the toolbar?
http://www.ebizmba.com
I don’t understand eBay’s buying strategy. An auction site seem pretty far afield from from what SU is. Are they just looking for an ad platform?
I sometimes get the impression they’re looking to expand into a broader company, but maybe they just think it’s a good purchase even on its own. I personally like the sound of the deal, regardless of fit. I think StumbleUpon is pretty great.
I don’t know, maybe they’ll pick up one of the third tier search engines and really go for it. I say go for Gigablast.
I just stumbledupon-a-deal…
$35 per unique monthly user….This seems to jibe with the chart Om pulled out for Biz 2.0 on valuations…
Yet….
You could see using the technology like Amazon does for buying circles “people who bought this, also liked that”…which generates lots and lots of money — so maybe they’re not completely bonkers here, and actually getting some good and trained AI to help sell more stuff to people who liked other stuff, as it were
4 million stumbles per day…interesting. If it was a search engine and monitized as such, guessing 200K sponsored “stumbles” per day (5% total) at an average of 20 cents per click = 40K per day in revenue. Even if the numbers changed to 1% sponsored and five cents a click, you’d have 2000 / day on that revenue alone. Annualized that’s 730,000 per year, so if this was their only revenue, eBay’s buying them at 100x (possibly) potential revenue.
Hmm…ok. So, another way to look at it: 2.1 users = $35 per user of the site. That’s too much, way more than any other sale. The 100x model is closer to what they were valuing on, imho, than the number of registered users.
So, it’s a play for free traffic + distribution…interesting.
I think eBay is just trying to diversify into other markets as there is no direct link with what it does now and StumbleUpon. And I think that makes sense but whether actually buying StumbleUpon is the right direction - well, only time will tell.
Nooooo! I’d much prefer to use SU with the knowledge that it’s a fun little app gone big. This acquisition puts me off. Big time.
Girls read techcrunch????? (referring to #8) whoa! finallyyyy….
I agree with Rachel, part of the fun of StumbleUpon is in its quirkiness and the independence factor.
How could eBay possibly subvert the StumbleUpon program without losing a whole lot of members? I can’t see them having the audacity to integrate eBay products into the flow of stumbles, based on your tagged preferences. That would be annoying and intrusive.
Perhaps if they added the functionality to a seperate part of the toolbar people could opt to Stumble eBay auctions based on their preferences?
I seriously doubt eBay would ruin StumbleUpon by adding auctions unless you have it in your topics.
I think they see it like a good business deal just like Skype.
I’m excited to see what happens.
I think one new StumbleUpon feature fits perfectly with eBay - StumbleThru. eBay has grown to a huge site, barely navigable with the currently-offered search tools. Allowing users to rate auctions and other users, then navigate those ratings using StumbleUpon’s Stumble Thru tech, would not only make eBay more navigable and easier to search, but would also increase the amount of time visitors surfed eBay’s auctions.
I can see StumbleUpon used to create a “window shopping” experience for online shoppers.
Something like using the wisdom of crowds to find the really nice items and great deals. Social networking for shopping?
Doing this would benefit eBay’s current auction items business model, but it could open up a world of large and small e-commerce retailers.
For Ebay to buy something and not use it for ‘Ebay’ -
- Its not going to happen, They will whore this out.
It still makes no sense to me. I can’t imagine that there’s anything about the underlying technology that would benefit Ebay, and while you can sort of imagine people “stumbling” around auctions, that seems far fetched and unlikely to work. I’d love to know what Ebay’s thinking is here (But then I’d love to know what they were thinking when it came to Skype too…)
It’s actually a shame, as I’d have much rather seen Stumbleupon wind up with a Google or Yahoo than Ebay.
eBay won’t just be buying the technology, they’ll be buying the userbase. Arguably, eBay will end up with a large community who already enjoys and is familiar with the process of discovering, rating and tagging stuff. Bring even a small portion of that community to eBay and you’ve got a web2.0-ish service centered around auctioning and retail sales. Add a few more features and they could leapfrog Amazon:
* weight searches with ratings
* use tags along with keywords and categories to strengthen the accuracy of eBay’s existing search tools
* add a “find a related eBay auction” button to browsers, keying off search engine keywords, tags, categories on other retail sites, etc
I wrote a few more of my ideas down, and noted that Om had something to say along the same lines.
I agree though - while eBay has the opportunity to move the online retail industry forward with this purchase, they haven’t shown a stellar track record so far with acquiring and improving technology. I would have preferred someone more innovative make this purchase.
It might be a good idea if they intend to make Ebay a marketplace where people shop around. Right now people go there with an intent to buy a specific item.
If this doesn’t make sense, tell me how endless.com makes sense…
Maybe I should have added: Endless.com was built by Amazon.com in response to customers’ desires to shop a destination dedicated to shoes and handbags.
dude, writing “first reported here” in all of these postings is soooo lame…don’t you want to be taken seriously, like a sort of real journalist? ever see these claims made in newspapers? exactly…just let it go, write the news, and stop laying claim to every random news item as ‘yours first’ - just my opinion of course….
Cool toolbar
Who has traveled so far
Gets its guts ripped out
By a merciless lout
eBay spins
“The consumer wins!
Download this tool
It will make you drool!”
New SU released
Amid much PR foam
Funny how now
All roads lead to eBay Rome.
DotPoet wins the thread.
Cosign with J-son
Dotpoet is definitely the thread winner…lol.
This could be the same mistake as when eBay bought kijiji.com
I was thinking the same thing before I even began reading the article. What the heck is Ebay thinking jumping on an acquisition like this.
I have been watching the developments in eBay for quite some time. Silicon Valley Entrepreneur & Strategy Consultant, Sramana Mitra, writes a series of articles on eBay’s acquisitions. Read more in her blog eBay’s Forays Into Media.
75 million
wow
http://www.signaldev.com
This rumor has been hanging around for some time, I’ll be glad when everything settles. I almost hate to see StumbleUpon snapped up, but mostly everything and anything of value will eventually be consolidated to a few key companies down the road: Google, Yahoo!, Microsoft, eBay, MySpace, Amazon, and a few others. Can you say oligarchy?
I think there is a good reason why eBay wants SU. It can improve eBay user experience. Like if a buyer wants to SU a product and share it to others.
SU makes sense for eBay. But Skype? I mean, Skype is a great business but for auctions? Looks like the theme is buy anything and everything with a lot of users.
http://www.signaldev.com