eBay is at it again! Their list already includes PayPal, Shopping.com, and Skype ,with PayPal by far being the most successful buy, and adding to the acquisition list is StubHub. Some call it a ticket reseller, others call in ticket scalpers, it’s really all the same thing and it just might be a good buy. eBay has been struggling recently with 100 million invested into a China eBay that has failed, along with a market value that has gone down 37 billion over the past two years (that’s around 50%). Right now they’re in a position where they are seeking out other e-commerce avenues to help them stay afloat.
Interestingly enough, eBay tried to sweep up StubHub back in 2002 for $20 million. StubHub owners and investors clearly benefited from sticking it out, because this time around it is being acquired for $310 million in cash! StubHub is a broker for people wanting to sell tickets for major events. The people listing pay a 15% fee, and those buying are charged a 10% commission. In 2006 alone, Stub Hub buyers purchased $400 million in tickets! Overall, they have intermediated the sale of 5 million tickets. Another reason people are attracted to buy their tickets from StubHub is because they guarantee that all tickets sold on the site are authentic.
This deal was announced late Wednesday as news had already leaked to the Media. The deal is expected to be completed in April. eBay didn’t have a whole lot to say about it, but something they did offer, “the acquisition will enable eBay to expand its presence and offering in the online tickets segment, while allowing StubHub to continue to scale its business with the e-commerce expertise and resources of eBay.” It seems like an appropriate fit for eBay as people already sell tickets to events there. eBay boasts such a large community, and I think both eBay and StubHub communities will definitely benefit.
News Source: New York Times