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Thu Sept 17 2009 23:09:17

Let's Play the M&A Match Game

By: Ina Steiner

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In a blog post, Om Malik pondered possible Merger & Acquisition activity and made some predictions for which tech companies might buy whom ("As the Economy Turns, Tech M&A Is Back - and That's Good News for Startups").

Om includes as an outlier or unlikely deal, "eBay buys Etsy." Of course, it's always possible. Lest you think the Esty brand is too pure for eBay, remember that eBay managed to acquire a hunk of Craigslist, despite what users might have thought about such a deal.

I think it more likely for eBay to look for a company like Woot that knows how to drive large volumes of product for retailers/liquidators (deep-SKU, it's called), and has relationships in place. After all, eBay's Daily Deals are closely patterned after Woot's model - though these days, eBay may be reserving cash to support BillMeLater.  

I could see Yahoo acquiring Twitter and Google acquiring coupon/shopping-community site RetailMeNot.

Other sites that make for interesting takeovers by larger organizations include classifieds aggregator Oodle; invitation-only shopping site Gilt Groupe; and ecommerce agency Mercent.

If you were CEO of Etsy, who would you sell to - or would you? And as an online seller, which firm would you want to buy them if they were looking to be acquired? (Remember, this is just a fun game of who might buy whom, Om did not say Etsy was looking for a buyer.)

What about other players - Google, Amazon, eCrater, Bonanzle (too many to list) - make up your own scenario and tell us why it would be a good match!

Comments (12) | Permalink

Readers Comments

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by: joe

Fri Sep 18 06:41:22 2009

Everyone has their PRICE...the Purchasers Name, Morals and Business Integrity is absolutely meaningless.

The only way to stop a splinter (competitor) from festering is to remove (buy) it...same applies in world of business.

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by: joe

Fri Sep 18 07:17:06 2009

News.... Etsy swallows eBay!

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by: unaware

Fri Sep 18 07:24:01 2009

Kayne West, Serena Williams and Rep. Joe Wilson band together and buy eBay.... they figure it would be a natural fit.

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by: summer in the city

Fri Sep 18 08:59:22 2009

Ebay buying Etsy? Would it make sense for Ebay to buy a site populated with merchants who hate Ebay? No. So, knowing Ebay, they'll probably do it...

(Oh, I forgot -- all of the new venues are populated with sellers who hate Ebay.)

Etsy's been stubbornly clinging to Paypal for years, despite Etsy sellers asking repeatedly for Google checkout, so maybe they are indeed flirting with Ebay. Can you imagine Donahoe striding into Etsy's offices the day after the acquisition?
Fun's over, kids!

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by: summer in the city

Fri Sep 18 09:04:05 2009

Another thought: Amazon released a cool new version of its growing artisan site recently, so since Donahoe copies everything Amazon does, he's probably decided he needs an artisan site too.

Keeping up with the Bezoses, you know.

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by: Harriet

Fri Sep 18 09:08:01 2009

I think eCrater is probably out of the mix, since they are a totally free site. If someone bought them with the idea of changing things, every seller would leave en masse.

Of course there is always the possibility of being bought out to just eliminate competition, and then closing the site.

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by: Lisa

Fri Sep 18 10:40:58 2009

More like Twitter acquires Yahoo! yahoo has no money and Microsoft has been trying to take them over for years. Microsoft could buy eBay - it won't be much longer before eBay becomes affordable.  Bonanzle could merge with Etsy and become Bonanzlet.  Google could drop it's non-compete with eBay after the advertising partnership ends and open it's own auction site, making it bigger than ebay and not making the mistakes of eBay - and eventually buy ebay in little pieces.

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by: maxwell

Fri Sep 18 11:34:18 2009

Not sure if it would make sense for eBay to acquire Woot as they have already copied the format.  Maybe if they used it as a channel to cross promote it might make sense as it seems eBay is really trying to penetrate the refurb/resale/closeout space.

ETSY makes no sense because eBay should be smart enough to know that they would lose that community the second they purchased it.

I think eBay is much more focused on its core business model these days.  In the past they've gone off in the wrong directions (see skype, stumbleupon).  

I think they would be smarter buying companies that can help them acquire new users or improve their experience.  With that said I could see them buying somebody like Getitxext to improve their finding/search experience.  

Instead of Woot they should seek out the next Woot, something fresh and acquire the company early on and adopt the theme or idea or leave as a separate channel ala Stubhub.  

A Twitter play for them is out of the question due to upfront cost and ongoing costs to further grow the seeds.  Instead they should partner with Twitter to drive users through tweets to eBay.

Twitter will be gobbled by FB, Yahoo or Google unless MS panics and makes a play out of desperation.

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by: Patricia

Fri Sep 18 11:37:35 2009

Why would Ebay buy Etsy?  First they chase away small sellers then they want to BUY them back? LOL  Crazy but sounds like something Ebay may try to do in the future if they keep on sliding down into that quicksand Donahoe guided them into.

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by: John

Fri Sep 18 12:27:44 2009

Notice how no one is interested in acquiring ebay. The reason is that their growth potential is considered very limited. Hence why they acquire other companies.

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by: RicRoe

Fri Sep 18 22:31:12 2009

eBay buying Etsy would allow Donhoe to assault many of the same sellers a second time.

I guess once Donahoe & Co have cleaned out the last of the sellers that helped eBay become a household name, JD's maniacal ego will drive him to acquire one or more sites that those sellers flocked to.

It is not logical that eBay would buy one or more of the sites that the "noisy" and "unwashed" sellers he worked so hard to drive from eBay flocked to.

They say criminals return to the scene of the crime, and that arsonists watch the fire department fight fires they started.

I guess that about guarantee's Donahoe & Co will think its a good idea down the road.

If there was a law against committing virtual murder and rape on the Internet, I would love to see Donahoe charged for killing off sellers and screwing the sellers that remain on eBay.

That would be what I call surfacing the details of his tenure at eBay.

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by: Jessy S.

Sat Sep 19 01:18:47 2009

First off, I am with the majority saying that eBay will not acquire Etsy.  That would make too much sense if the object of the game was to kill competition.  Another thing making sense for eBay was for them to acquire YouTube when they had the chance instead of Stumbleupon and Skype.  That would have brought selling to the next level because sellers would be able to demonstrate their product while buyers would be able to see the same product up close as presented by the seller.  However, the deal made too much sense so Meg decided to pass.

As for the current game, here are some marriages I would love to see:

1. After the deal with Microsoft falls apart, Apple acquires Yahoo!  This deal makes sense because search is a pretty big thing right now and Apple will want to be a big player.

2. Microsoft acquires NBCUniversal.  I don't know how this could happen but Microsoft does have the money while General Electric is looking for a way out regarding their purchase of NBCU since the network isn't a moneymaker for them.

3. Woot! acquires Bonanzle.  I can see this deal happening because other sites are getting into third-party selling.  Sears just announced a deal according to Ina in her blog.  In any case, I can see Woot! celebrating the purchase with a woot-off where Woot! employee Jason says in a blog announcing the deal that wooters can open a bonanzle account and sell the stuff they purchase from any Woot! site.

4. This makes too much sense, Amazon acquires a bankrupt eBay in the Summer of 2010.  Lets face it, eBay's Christmas this year will be likened to a kid who gets coal in his stocking on Christmas morning for being bad all year.  In this case, eBay is losing customers when you know that their customer is the seller because it is the seller who pays the fees, even if an item doesn't sell.

5. Google acquires Paramount and CBS from Paramount and Les Moonves (Current CBS CEO).  I think this is their answer to Microsoft's possible acquisition of NBCU.  Even if Microsoft doesn't acquire NBCU, Google can't go wrong by acquiring Paramount and CBS because the Paramount CEO, Sumner Redstone, is in heavy debt while CBS's current advertising model isn't working for them because they have one cable channel in Showtime while their rivals have  multiple cable channels.

6. Comcast acquires Time Warner while selling the Time Warner cable company to  Amazon Cable uses the cable company to launch a third major shopping channel after HSN and QVC.

7. Google acquires and think it is the 800 pound gorilla in e-commerce, but the true 8,000 pound gorilla is Woot! with Bonanzle.  This leads too...

8. Twitter acquires Google.

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