Could Yahoo! be a suitable suitor for eBay?
We were hoping that now PayPal has been spun off from eBay, that eBay would be able to settle down, revitalise the market and get sales on a sharp upward trend for sellers using the marketplace.
Regardless on who was right vis a vis the keeping of spinning off of PayPal, it was a distraction for the eBay leadership which probably lasted over a year. There was no good reason for separating the two from a seller’s perspective (in fact it’s unquestionably a bad thing and a nuisance), but for activist investors it was perceived as a quick way to make a buck so it happened.
Now Valuentum Securities, who say that they provide “Exclusive analysis for the discerning investor”, have written to Yahoo! CEO Marissa Mayer, suggesting that Yahoo! should acquire eBay as part of a four point plan to double Yahoo!’s value to investors.
The attraction of eBay is suggested as free cash flow yields of ~10% and negligible debt, they estimate a pay back period of less than a decade (even without exploring synergies such as beefing up eBay’s search presence on Yahoo! sites).
Yes there may well be some benefits of eBay being owned by Yahoo!, but this again smacks of a deal to suit investors with little or no regard to eBay’s buyers and sellers. Of course Yahoo! would need to keep eBay running, but do we as eBay users really want another protracted period of eBay management being distracted by mergers and acquisitions?
Hopefully (at least in the short term) this will remain nothing other than an investment analyst suggestion to Yahoo! We need an eBay where the focus in the immediate short term is on growing sales for sellers, attracting new buyers and re-engaging lapsed buyers. We want to see an eBay that makes money for it’s sellers and let investors take a back seat for a year or so while eBay consolidates and regroups.