Is a Google acquisition of eBay a realistic possibility?
eBay’s having a good year and is very much on the ascendancy after a fair few years in the doldrums. What’s the reason for the boost? Three things: they’ve made an investment in technology and innovation that is now starting to pay off, the opportunity provided by mobile has been successfully seized and PayPal continues to be a highly profitable part of the business.
So, when all is going well, what happens? Yes, the rumour mill grinds into action and soon there is discourse on who will buy eBay. Recent chat reflects that eBay is well priced with a bright future and the only realistic possible buyers are Google and Microsoft (they have deep enough pockets).
And Google seems to be fancied as the better fit. Although reports that Microsoft have dropped Project Brazil might suggest they are in the market for a marketplace.
A piece on Seeking Alpha is worth dipping into: “In a world of impetuous, hair-brained M&A activity, the word “synergy” has become a bit of a cliché. In the case of a holy union between Google and Ebay, the synergies are glaring. With the data Google possesses on web searchers and the ability to enhance eBay sales with all of its many properties, it would become a clear case of the whole being worth more than the sum of its parts.”
I’m uncertain. It may have been a long time since I worked at eBay but I don’t think that the cultures at eBay and Google are that similar. Also, I always detected an independent streak at eBay that I suspect means they would never submit to the yoke of anyone else.
Moreover, eBay’s been around the block now and celebrates its 18th birthday this September and is doing well. I’m unconvinced that eBay would submit to a takeover while things are looking so rosy.
I struggle to see how this would benefit eBay. eBay has enough data on their own, everyone knows this brand, they take 13% of every transaction (must be a healthy profit after operational costs), nice developers program and good technology backing, and last but not the least they killed Google Checkout (eBay with their policies, not PayPal as a superior offering).
Also I can’t see how the any country’s Competition Commission (or whatever) would even consider allowing this to take place this.
Why would Google want to buy eBay? They are powerful enough that if they wanted to they could easily challenge eBay with their own platform. All they would have to do is expand Google Checkout and Google Shopping into a selling venue.
Google is retiring Google Checkout. It will be dead this November. The only replacement will be Google Wallet which has very limited application and mostly just for Google Play apps.
My guess is that Google wants to buy eBay because the guy who wrote this on Seeking Alpha has invested in eBay so it would make him rich if they did. Essentially eBay’s stock price would double overnight if that happened. And even if they don’t rumors of it being possible could drive it up by double digits. I used to work at a company whose stock almost doubled simply because there were unfounded rumors on the internet that Intel was going to buy us. They never did but it took the stock over a year to fall back into place.