eBay Spends $620 Million On Shopping

    June 2, 2005
    Chris Crum

eBay is planning to purchase comparison-shopping site Shopping.com for about $620 million in cash. eBay will acquire all outstanding shares of Shopping.com stock for $21 per share.

Shopping.com’s cash, cash equivalents, and marketable securities as of May 31, 2005 totaled about $140 million. The acquisition will give eBay’s many sellers a new sales channel and access to a new set of buyers.

“On Shopping.com, the shopping experience will be enhanced by the addition of eBay listings to the product selection already available, and merchants will enjoy additional traffic and leads from eBay. Finally, the consumer-generated reviews on Epinions complement eBay’s own community feedback-driven marketplace.”

eBay Spends $620 Million On Shopping

According to eBay, Shopping.com will especially appeal to its sellers who are having success with in-season products. “The acquisition of Shopping.com will allow us to provide even more opportunities for our sellers,” said Bill Cobb, president, eBay North America. “Shopping.com’s comparison technology simplifies the online shopping experience and the Epinions’ community of reviewers is a great match with our own. Together with the outstanding management team at Shopping.com, I believe we can accomplish some amazing things on behalf of our buyers and sellers.”

Shopping.com’s Epinions community of more than 400,000 reviewers has produced nearly two million detailed reviews that help consumers make informed buying decisions.

“eBay will provide our shoppers greater convenience and comprehensiveness and will help our merchants increase sales,” said Lorrie Norrington, president and CEO of Shopping.com. “This partnership will allow Shopping.com to accelerate our vision to dramatically improve the way people shop and sell online.”

eBay says that it expects the acquisition to be immaterial to its full-year 2005 pro forma diluted earnings per share, and dilutive to its 2005 GAAP diluted earnings per share due to incremental charges for stock-based compensation and the amortization of acquired intangible assets.

The acquisition is expected to reach completion in the third quarter of this year, but it is still subject to regulatory approval as well as the approval of Shopping.com’s shareholders.

Chris is a staff writer for WebProNews. Visit WebProNews for the latest ebusiness news.