Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Tue Mar 15 2016 18:00:05

Revisiting Speculation about an eBay Acquisition

By: Ina Steiner

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When eBay announced in 2014 that it was breaking up the company, analysts wondered if it would sell the marketplaces business - perhaps to Alibaba. It's an interesting time to revisit the topic now that the split with PayPal is complete (as of last July) and things have settled down.

Note that eBay didn't just separate from PayPal - it also sold its Enterprise business (including Magento), and it sold its stake in Craigslist. Properties eBay did retain: the StubHub ticket-resale business and its online classifieds business. Bottom line: the marketplaces business itself is smaller.

Pundits have talked about Alibaba as a possible acquirer of eBay. And interestingly after weeks of speculation, Alibaba has confirmed it has signed a deal for a $3 billion five-year loan, according to Reuters, "which will help the e-commerce giant as it snaps up stakes in companies within China and overseas."

Ten years ago when eBay was an ecommerce powerhouse, the idea of a Chinese company acquiring it might have raised eyebrows from regulators. But now that Amazon has such strength that it's even posing a threat to brick-and-mortar retailers including major chainstores, it would be far less controversial.

Yahoo has also been mentioned as a possible acquirer of eBay; it's tangled up with Alibaba and has its own ecommerce unit (now called Aabaco) that it had been planning to spin off until questions about the tax consequences of such a move raised fears. 

Could Alibaba, Yahoo, and eBay work out a deal to rearrange the Yahoo and eBay ecommerce pieces into one, under Alibaba's control?

It's interesting to speculate about whether eBay can survive on its own, and what kind of company might see eBay as fitting into its portfolio. As sellers, what would you like to see happen?




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Readers Comments

Perminate Link for Revisiting Speculation about an eBay Acquisition   Revisiting Speculation about an eBay Acquisition

by: FeelingFroggy This user has validated their user name.

Tue Mar 15 19:18:49 2016

Fleecebay will be absorbed by some Chinese company and then disbanded.

Perminate Link for Revisiting Speculation about an eBay Acquisition   Revisiting Speculation about an eBay Acquisition

This user has validated their user name. by: iheartjacksparrow

Tue Mar 15 20:08:29 2016

As a former eBay seller, I would like to see someone buy the company and then roll back all the policies to the way they were pre-JD.

I do wonder: If eBay were sold, does the agreement with PayPal stay in effect, or is that "torn up" with new ownership?

Perminate Link for Revisiting Speculation about an eBay Acquisition   Revisiting Speculation about an eBay Acquisition

by: pace306 This user has validated their user name.

Tue Mar 15 23:04:51 2016

Being that eBay isnt into/doesnt care about selling things (and keeping them sold aka returns) ... NOTHING would surprise me.

eBay does as little as it can to get by, and it shows.

They keep on their payroll people like GRIFF (dead wood if there ever was any - every answer he gives is "Ill look it up and let you know") and Jordan Sweetnuts.

These are the same people that filled the head of JD that sellers and the fvfs they generate(d) are unstable and not enough to build a REAL business around - but its all really about advertising.

Where are the companies that "refused to do business with Paypal since they were owned by eBay" now that they are separate? Wheres the announcement that they succeeded in getting ApplePap "back"? ie the split with Paypal was just a shuffling of paperwork and money, nothing else. Paypal certainly didnt become more PRO merchant after leaving eBay.

It would seem that eBay )based on how little work they actually do to help sellers) is more interested in ad money (ala google) then in selling goods. Its NOT a stretch to think that eBay would continue to shift its actual "sales dept" to wither Yahoo (and even they arent on solid footing these days) or Alibaba (considering the sheer amount of Chinese crap they help get into the US).

Bottom line - seller will be used and abused till the end of time and no matter who runs the show, its "meet the new boss, same as the old boss".

Perminate Link for Revisiting Speculation about an eBay Acquisition   Revisiting Speculation about an eBay Acquisition

This user has validated their user name. by: Rexford

Wed Mar 16 07:03:42 2016

I agree with pace306, Griff is dead wood.  He must know where the bodies are buried, because I can not for the life of me understand why they keep him around.  When I hear the words "Griff" and "seller advocate" used in the same sentence I want to throw up in my mouth.

Perminate Link for Revisiting Speculation about an eBay Acquisition   Revisiting Speculation about an eBay Acquisition

This user has validated their user name. by: Rexford

Wed Mar 16 07:06:11 2016

And to answer your question, no I would not like to see this happen. It is bad enough that a Chinese company wants to purchase Starwood Hotels. As bad as eBay is, I don't see how this would be a good thing.

Perminate Link for Revisiting Speculation about an eBay Acquisition   Revisiting Speculation about an eBay Acquisition

by: JQ This user has validated their user name.

Wed Mar 16 08:14:38 2016

Alibaba could have bought and sold eBay many times over during the last few years.

Their half-hearted entry into the US e-commerce market via 11 Main still remains mostly a mystery to outsiders. They never really put much money into it, and pulled the plug surprisingly quickly. I think that whole venture might have just been a form of "fact finding" on their part, to learn more about the US market and US sellers.

When they all but killed off 11 Main I suspected their next move would be to acquire an already established marketplace in the US rather than build a new one. Ebay is the obvious choice. But then a year passed an nothing.

I would not be at all surprised if Alibaba spent the last year on the sidelines waiting to see how the eBay marketplace would perform after the split with Paypal. They have their answer now, not well at all, but also the marketplace is not in a collapse crisis. Which, for those who do not want to see Alibaba buy eBay is probably the worst outcome. Alibaba has probably determined eBay will remain a factor in the US market for the forseeable future while it continues to decline in market share.

Given all the above, Alibaba might now be simply waiting for the right time to buy eBay. They have set a price and can afford to wait until that deal can materialize.

Anyone who thinks Alibaba is not planning an entry into the US market is probably just trying to fool themselves. Since the entry via new marketplace option now appears to be off the table, Alibaba will buy some US established company when they are ready. If not eBay, than who? Buy.com? Overstock.com? Jet? maybe. Walmart (heck, it is possible). But eBay looks to be the more likely option.

Perminate Link for Revisiting Speculation about an eBay Acquisition   Revisiting Speculation about an eBay Acquisition

This user has validated their user name. by: Ric

Wed Mar 16 10:17:16 2016

Perhaps eBay's executive team realizes their company is weak after the PayPal split and fears a hostile takeover bid.  

This might explain why eBay took out a $750 Million dollar loan in order to beef up the corporate debt and hope that increased debt will make a hostile take over less attractive to the outsiders.

eBay's executive leadership and corporate management is most certainly inept and clearly does not know what is best for their own business.

That said, what makes anyone believe that a takeover by Alibaba or Yahoo would result in anything better?

Alibaba appears to have no patience for slow growth as evidenced by the short lived 11 Main. Marissa Mayer over at Yahoo has her hands full keeping unhappy investors at bay and holding that company together. IMO, that makes a take over by either company unlikely.

The wild card would be Jeff Bezos. Under Mr Bezos, Amazon has not been shy about making significant investments at the expense of corporate profits.  Were eBay to be absorbed by Amazon, the result would be elimination of Amazon's largest competitor and instantly add market share for Amazon.  

Perminate Link for Revisiting Speculation about an eBay Acquisition   Revisiting Speculation about an eBay Acquisition

This user has validated their user name. by: White Rabbit

Wed Mar 16 10:21:54 2016

in my opinion I think Alibaba would be wise to wait and see just how far the chinese economy collapses. It is quietly having spiraling down issues even if the US market does not reflect or acknowledge that daily. The problem is not going to go away anytime soon.It will most likely get a lot worse. Especially if the Pacific Asian rim countries get more upset.

The USA people overall does not like China.. not one bit. This is a serious problem if Alibaba were to buy Ebay. With the possible loss of sales of existing chinese products on Ebay  even now.. it could be a loss. To have chinese Bosses on Ebay? i don't think so.

This is not a situation that is thought out well if i fact they are considering buying Ebay.

my opinion..if they bought Ebay.. in 2-3 years , it would look like 11main.

Perminate Link for Revisiting Speculation about an eBay Acquisition   Revisiting Speculation about an eBay Acquisition

by: notbananas This user has validated their user name.

Wed Mar 16 10:31:52 2016

The main issue is ebay's concept of e-commerce still a viable platform for future growth? Anyone aquiring another business will not look at past performance, but potential for future growth. Having competition from all sided and all parts of the planet, only a fool would aquire Ebay.
Would anyone buy a bookstore chain like Barns & Noble (stock in July 2015=$28 and Jan 2016=$8) with Amazon around?
Like any other business that was built around then current technology, what worked 20 years ago is now way overdue obsolesence. Ebay is like the 100 years of Detroit dominance of the auto industry which ended a few decades ago, never to come back again.
The few things Ebay has that's worth anything is their patent on the auction process and their list of users, both buyers and sellers.

Perminate Link for Revisiting Speculation about an eBay Acquisition   Revisiting Speculation about an eBay Acquisition

by: ebay refugee camp This user has validated their user name.

Wed Mar 16 10:42:44 2016

Ebay has problems, the technical issues are horrible.
The whole company needs to be redone, the customer service is broken, the selling community is completely sick and tired of the crap and sellers are leaving.
I can tell you sales on Amazon and are very good, very few problems they make ebay look like five year olds trying to run a company.
The TRS program is full of mistakes and holes, the 100 percent buyer guarantee is totally one-sided for the buyer and the bad buyer list grows daily.
There is no seller protection, report a buyer is a complete joke why wwaste your time.
Who would want this mess?
There is a court case right now that is going to sink ebay about ebay siding with buyers, they will lose this case, there are just too many examples of this happening

Perminate Link for Revisiting Speculation about an eBay Acquisition   Revisiting Speculation about an eBay Acquisition

This user has validated their user name. by: toolguy

Wed Mar 16 11:40:34 2016

@ JQ

"Anyone who thinks Alibaba is not planning an entry into the US market is probably just trying to fool themselves."

I doubt they will try again, 11 Main was a COMPLETE FAILURE!

Why would anyone want to buy eBay?

The market cap is $27 Billion and would go up if anyone tried a hostile takeover.

From where I sit eBay is working and working well. . .

Perminate Link for Revisiting Speculation about an eBay Acquisition   Revisiting Speculation about an eBay Acquisition

This user has validated their user name. by: eXtinctBay

Wed Mar 16 16:35:57 2016

11 Main was, again, a marketing test.

That only ''wanted'' the upper crust of eBay sellers with the finest in high-end merchandise.

And then put no money into the site whatsoever.

It was also an exercise to prove that most sellers are sick and tired of the antics of eBay, and are ready for an alternative. The multitude of applications to join 11 Main proves that.

If and when they do enter into the US market, Baba should position themselves to avoid the mismanagement mistakes that eBay has demonstrated since 2008.

It is not rocket science- make all items listed searchable and available to buy at all times.

And invest in the infrastructure of the company by spending money wisely.

Also, ensure buyers are happy without catering to liars & scam artists. Get back to providing a service to your paying customers. The sellers who make items available  to purchase and pay your bills.

Perminate Link for Revisiting Speculation about an eBay Acquisition   Revisiting Speculation about an eBay Acquisition

by: toml3030 This user has validated their user name.

Wed Mar 16 16:58:58 2016

The problem with Alibaba buying eBay is that once they have an established physical presence in US, they will have to answer on what is their plan on how to police fake stuff that gets sold on their non-eBay sites.  For this reason I never believed that they would actually buy eBay.

Perminate Link for Revisiting Speculation about an eBay Acquisition   Revisiting Speculation about an eBay Acquisition

by: pace306 This user has validated their user name.

Wed Mar 16 17:57:53 2016

My own personal opinion is that Alibaba is not yet ready to risk its cash on eBay.

The question becomes "if so - when?".

Rakuten bought buy.com and most of the good sellers left. It used to be a great platform, but 1) they adopted a buyer is always right policy ala eBay and 2) US sellers didnt get access to the lucrative Japanese marketplace - a place where good sellers can make ALOT of cash.

Alibaba has its own issues - I'd say (being conservative here) that fully 1/2 of the items IF NOT MORE are fakes on Alibaba - so theres NO WAY they can "come to market". The money (just like/how eBay pretends it doesnt know about fakes) is just too good. eBay wont even let you report sellers who steal your pictures anymore!

11main indeed was a test. They put in SOME money and did back me up when issues (cc issues) arose. What did they learn?  1) american sellers (good ones) expect EXCELLENT service (which is why we complain about eBay - whos service level is C+)) and 2)american buyers expect perfection as well (thanks to Amazon and their "do what ever it takes to bribe buyers to come back) and of course 3) the amount(s) of money it takes to keep both #1 & 2 happy is more then they want(ed) to spend for a US based marketplace.

Sears? useless
Rakuten? dead
Overstock? worthless
Bestbuy? no longer open to 3p sellers
Newegg? to hard to deal with and no business
Wayfair? no data on this one


Theres of course a few more - but the only ones of note are Jet and Walmart. Jet is the possibility since they arent making any money on the platform.

I think that Alibaba is just waiting it out. eBay isnt doing poorly enough YET to justify a buy out. DW has yet to be able to justify getting a golden parachute. Just watch - if he and Griff - along with all the other free loaders can get one from eBay - they will NOT sell out to Alibaba. If they cant - they will, and they will justify it as a way to get into "selling into China".

Its all about the money, always has been, always will be.

Perminate Link for Revisiting Speculation about an eBay Acquisition   Revisiting Speculation about an eBay Acquisition

This user has validated their user name. by: toolguy

Wed Mar 16 20:07:48 2016

@ pace306

"Its all about the money, always has been, always will be."

eBay makes plenty of money and in fact makes more profit then Amazon on most Q's reported over the last 2 decades.

I only sell on ebay because that's where I make my MONEY!

Perminate Link for Revisiting Speculation about an eBay Acquisition   Revisiting Speculation about an eBay Acquisition

by: Gemz This user has validated their user name.

Thu Mar 17 00:35:40 2016

Ebay will be bought up by someone within 1 year from today. The people are ebay currently have ZERO say so on selling out if Alibaba or someone else acquires enough of their stock. Of course the nice thing about a buyout is that everyone goes! Griff and all his pals along with just about every stupid idea they ever had (and implemented!). I don't like the Chinese buying up most of America but I will tell you, Ebay is long overdue for a drastic change and this time it will happen! (Although I would love to see Amazon buy it up but as long as things go back to a somewhat normal way of operating and they clean house completely, then I wouldn't care if Putin bought it! lol).  

Perminate Link for Revisiting Speculation about an eBay Acquisition   Revisiting Speculation about an eBay Acquisition

by: Garcia This user has validated their user name.

Thu Mar 17 01:25:38 2016

I always thought Ebay would buy Etsy, but I suppose it is actually ebay looking for a buyer.

Perminate Link for Revisiting Speculation about an eBay Acquisition   Revisiting Speculation about an eBay Acquisition

by: ConnecticutGal This user has validated their user name.

Thu Mar 17 01:26:29 2016

Alibaba spun off 11Main to Opensky.  Just the other day, I saw that Jack Ma had to take yet another oath to stop selling fakes on his sites.  If you take a look at what he is doing, he is raising more money through other instruments and heading into publishing and other non-tangible efforts.  I think he might see some writing on some wall somewhere that Chinese exports will increasingly be rejected by other countries.

I believe that 11Main was an inexpensive way for Alibaba to get US interest going ahead of the IPO.  The speculation during that time was rampant about what Jack Ma would do next.  Moreover, they captured a lot of bank account information when operating 11Main, which is kind of scary in a way, too.  Sellers had to provide a valid bank account and social security number.  Oddly, after I reluctantly did this, I started getting a lot of spam to the email associated with my account.  Just sayin'

My feeling, and I could be entirely wrong, is that Ebay is now trying to monetize the site in the way that Facebook did and no longer copying the Amazon model.

Perminate Link for Revisiting Speculation about an eBay Acquisition   Revisiting Speculation about an eBay Acquisition

by: Tiffee Jasso This user has validated their user name.

Thu Mar 17 03:26:38 2016

Main 11 wasn't a test. It was "We took a billion dollars and went home. Thanks to all you Wall Street promoters and investors. If anyone thinks Alibaba could help Ebay, I have a bridge in San Francisco I could sell you.  

Perminate Link for Revisiting Speculation about an eBay Acquisition   Revisiting Speculation about an eBay Acquisition

by: Chicago48 This user has validated their user name.

Thu Mar 17 05:27:27 2016

Yahoo won't buy EB.  

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