eBay acquires GSI Commerce
eBay has just announced it is to acquire GSI Commerce, “a leading provider of ecommerce and interactive marketing services”. At US$2.4 billion, this is the company’s second-largest acquisition, surpassed only by its purchase of Skype for $2.8 billion in 2008.
In the press release, John Donahoe is quoted as saying:
We intend to lead the next generation of commerce innovation. The acquisition of GSI, which offers the most comprehensive integrated suite of online commerce and interactive marketing services available, will significantly strengthen our ability to connect buyers and sellers worldwide. … With eBay, PayPal, GSI and our global platform capabilities, we are focused on delivering new ways for retailers and brands of all sizes – from sole proprietors to large merchants – to drive innovation, engage customers and help people shop anytime, anywhere and on any device.
GSI has some of the biggest brands in retail on their client list, providing multi-channel order management and fulfillment ecommerce technology. So what will they bring to eBay? My money’s on the company moving inexorably away from the single site “buy it on eBay” model, to eBay (with PayPal) as a technology provider, allowing merchants to reach customers wherever they are, however they’re connected. Expect to see more emphasis than ever on mobile; expect to see eBay providing inventory and order management for other channels (eBay-powered Amazon listings? yes, I think so); expect to see eBay providing (eventually) stand-alone ecommerce solutions.
Their biggest purchase since Skype.
Hmm, remind us how that one turned out.
Such pessimism 😆
Yet another step towards the river style of trading; how quickly they forget what made them in the first place and undoubtably it will end up biting them on the ass in the end….
I can only but wonder why large co’s like ebay have to buy other businesses to move forward/sideways, expand.
Ebay have (or has access too) all the most advanced software, so why pay such a large amount, when they could develope it themselves.
This is trend in mostr big multimational PLC’s, they must have so much money to burn…..
Acquisitions are probably the easiest way to expand your business. Reasons why, off the top of my head:
~ save on dev time
~ save on dev costs
~ access to proprietary/patented technology
~ market share
~ restriction of competition
~ access to client base
~ future profitability of the acquisition itself
~ brand value of the acquisition
A good bit of competion never hurt anyone, at $2.4 billion, seems alot to beat the field.
I’ve heard that ebay’s software consists of miles of outdated spaghetti code.
(that’s just what I have heard)
But I would tend to believe it as that is what happens to companies that have had the same software for years, its gets bloated and impossible to improve.