eBay has succeeded in their old hunt of finding themselves a good retail identity. Taking a step further and excelling in the business of filling large orders for retailers, eBay has decided to acquire another successful online services company GSI Commerce, for the amount of $2.4 billion.
This acquisition was announced on Monday and is clearly taken as a comparable strategy against their rivals like Amazon.com. The analysts foresee that now with GSI, eBay has gotten the potential get bigger and beyond its own network of small power sellers. It has now the power of connecting it large audience with these large retailers. GSI will not only help them run the Web sites but also provide viable services like payment processing, order management and customer service.
Interestingly, now managing these orders for large retailers will be a major task for eBay, which has kept itself so far from involving in this complication of stocking merchandise, shipping and processing returns. The chief executive of eBay, John Donahoe, himself admitted this has now become the largest acquisition of eBay followed by the $2.6 billion purchase of Skype in 2005.
He was speaking at a telephone interview on Monday, when he also spoke that “What we see happening today is that commerce is changing rapidly.” He went on explaining the matter with detail; “The boundary between offline and online commerce is coming down at a stunning rate.”
EBay has a very varied history when it comes to their acquisitions, as PayPal was a huge accomplishment; the company also had to sell out Skype in 2009 after they were unable to really sync it with eBay users.
As both the giants, eBay and Amazon, compete against each other for the same United States market share, the battle between the two has become vey fierce recently.
This deal is suspected to close later in the last months of the year, including a 40-day “go shop” period during which GSI may also bring into consideration the bids of some other rivals as well.
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