An online service that matches buyers and sellers you say? Worth $18bn? Well, there are a lot of taxis in the world.
We have seen this one before though, so $18bn is entirely possible, if not necessarily sensible.
Consider this chart of the original dot com network effect superstar, eBay. Read more
Shares in Ebay fell as much as 5 per cent in after-hours trading after it reported an increase in third-quarter operating expenses and issued a cautious profit outlook for the Christmas shopping season, the FT reports. The company also said on Wednesday that third-quarter growth slowed due to the weakened euro, which caused a decline in demand for products from Asia and the US in line with the drop in value of the European currency.For the three months to September, Ebay reported net income of $491m, or 37 cents a share, up 14 per cent year-on-year. Ebay also reported an increase in fraud losses as it responded to risks introduced through its mobile shopping and payment products, but expects those losses to stabilise in the fourth quarter as it fine tunes its fraud protection system.
Hewlett-Packard has named former Ebay chief executive Meg Whitman as its new chief executive, replacing Léo Apotheker after he had served less than a year at the top of the world’s largest computer maker by revenue, the FT reports, citing people close to the process. The board also named chairman Ray Lane as full-time executive chairman. A consensus among the board had emerged over the past week that Mr Apotheker needed to go and that Ms Whitman, an HP board member since January, would be the best successor. There was some support from the board and investors for Mr Apotheker’s decisions while leading the company, but the core problem for some directors was his execution and leadership. Cutting financial projections three times during his tenure alienated shareholders and he soon lost the initial goodwill he enjoyed from executives and other employees, people inside the company said.
Hewlett-Packard shares jumped nearly 7 per cent as the board of the largest computer maker by revenue met and considered replacing chief executive Léo Apotheker after less than a year in the job. HP directors on Wednesday were weighing possible temporary or permanent successors, including former Ebay executive Meg Whitman, the FT reports, citing people close to the process. Also under discussion was whether to keep the personal computer business, which Mr Apotheker said last month he planned to spin off. HP was not expected to try to reverse its planned acquisition of Autonomy, the UK software group, for $10.6bn. Under the UK takeover code, it is very difficult for a company to walk away from an offer it has made without a material adverse change in the target.
US prosecutors have launched a criminal probe into whether Ebay employees took confidential information from classified advertising website Craigslist, Reuters says, as Ebay sought to build a rival service, a copy of a grand jury subpoena obtained by the news agency shows. The two companies have been feuding for years in civil court over allegations that online giant Ebay took a stake in Craigslist and then misappropriated confidential information while it secretly planned its own classifieds site. The subpoena seeks information regarding several Ebay people, including founder and chairman Pierre Omidyar and Joshua Silverman, the former Skype chief executive who served as Ebay’s representative on Craigslist’s board. An Ebay spokeswoman said the company would cooperate in any inquiry related to the disputes with Craigslist.
Online marketplaces – such as Ebay – will have to remove advertisements for fake goods from their sites and be careful about the assistance they give sellers in promoting products, in order to avoid being held liable for trademark infringements, Europe’s top court has ruled. The FT reports the ruling follows a case brought by L’Oréal, the French cosmetics group, against the sale of branded goods on Ebay four years ago. It will have consequences for the way online marketplaces are run. Luxury brand owners have complained for years that the growth of the internet has facilitated the trade in counterfeit goods.
Ebay has reinvented its China business by helping local companies sell to consumers overseas, says the head of the online retailer’s operations in Asia. Jay Lee told the Financial Times that cut-throat competition from local rivals, including Taobao, and entry barriers for foreign companies made China’s domestic e-commerce sector an unrewarding market for Ebay.
… how might they be mis-valuing equities?
So asks Themis Trading on Tuesday after discovering this curio of a story from CNN about algo-bots gone wild on Amazon. Read more
Ebay has made a bid to revive sales growth and diversify its business with the agreed acquisition of GSI Commerce, an interactive marketing company, for about $2.4bn, including debt, the FT reports. Growth in Ebay’s auctions business is slowing, and using GSI to help third-party sellers would allow it to compete with Amazon, Reuters says. Ebay will pay $29.25 a share, a premium of 51 per cent over GSI’s closing share price last week, for the Pennsylvania company, which handles the e-commerce activities for large brands and retailers, including the National Football League, Toys R Us and Ralph Lauren, the FT adds.
Ebay has made a bid to revive sales growth and diversify its business with the agreed acquisition of GSI Commerce, an interactive marketing company, for about $2.4bn, including debt, reports the FT. Ebay will pay $29.25 a share, a premium of 51 per cent over GSI’s closing share price last week, for the Pennsylvania company, which handles the e-commerce activities for large brands and retailers, including the National Football League, Toys R Us and Ralph Lauren.
With its talks to buy the fast-growing US electronic coupon company Groupon for as much as $6bn, Google has analysts wondering whether it’s being very smart or very stupid.
As the FT reports, analysts are sharply divided over “whether a deal would represent a coup for Google, or amount to an overpriced acquisition of a start-up with an unproved business model”. Read more
Alibaba.com, the leading online service matching manufacturers and wholesalers, on Tuesday night announced its second US acquisition this summer as part of a $100m push to expand its US presence, ereports the FT. Alibaba, based in Hangzhou, China, paid an undisclosed amount to buy Auctiva, a closely-held Californian company that helps businesses list their offerings on auction site Ebay and has a similar, lucrative business model to that of Vendio, another US company that Alibaba bought in June.
Facebook is now worth as much as $33.7bn based on secondary market transactions, giving the privately-held company an implied valuation that exceeds the market cap of publicly traded internet stalwarts such as Ebay and Yahoo, reports the FT. Common stock in Facebook is trading as high as $76 a share as investors scramble for a piece of the company before it files for an IPO. Analysts say it could be the biggest technology IPO since Google’s $1.67bn listing in 2004.
Two former Silicon Valley CEOs have been launched into California’s gubernatorial and senatorial contests, the WSJ reports. Republican primary voters selected former HP boss Carly Fiorina for the Senate race, while former Ebay chief Meg Whitman will contend for governor. Both must now convince Californian voters that they offer more effective responses to the state’s economic paralysis than their veteran Democratic rivals.
The proposed purchase of Skype by a group of investors hit a stumbling block on Wednesday in the form of a lawsuit filed by a company owned by Skype’s founders against current owner Ebay, the investor group, and Skype for copyright infringement. Joltid, a company run by Skype founders Janus Friis and Niklas Zennstrom, is seeking a US injunction to stop Skype from operating and to recoup damages it says are growing by more than $75m per day. Joltid has already filed suit in London against Ebay.
Ebay on Tuesday agreed to unload a 65% stake in its Skype internet calling service, exiting a deal that came to be seen as the online auction company’s biggest strategic mistake. The sale to a group of private investors – led by Silicon Valley buyout firm Silver Lake – for $1.9bn in cash and a $125m debt instrument, marks the reversal of an ambitious 2005 push into online communications that weighed on the final years at the company of Meg Whitman, Ebay’s former CEO.
Breaking pre-market news on Tuesday,
- German July retail sales rose for the first time in three months – Bloomberg. Read more
EBay, operator of the most visited US e-commerce site, offered to buy South Korea’s Gmarket for $1.2bn to expand overseas, reports Bloomberg. EBay will make a cash offer to buy all outstanding shares of Gmarket for $24 apiece, ending up with at least 67% of the company, it said. EBay would combine operations at Gmarket, which generated revenue of about $221m last year, with those of its Seoul-based subsidiary Internet Auction Co, it said.
Ebay has announced plans to spin off Skype, its online phone unit, with an IPO next year following the collapse of talks that would have sold Skype back to its founders. The plan amounts to an admission by John Donahoe, Ebay’s chief executive, that Skype was ill-suited in Ebay’s portfolio. The Ebay board is understood to be divided by moves by Skype founders Niklas Zennstrom and Janus Friis to buy the company back from Ebay with the backing of buyout firms.
Four private equity groups are jointly backing the founders of Skype, the internet telephony group, in a bid to buy back the business from eBay, reports DealJournal. KKR, Warburg Pincus, Providence and Elevation Partners are backing Niklas Zennstrom and Jannus Friis in a bid to repurchase the company they sold for $2.6bn in 2005. But the two sides are said to be far apart on price. Separately, the WSJ reports that eBay has sold recommendation engine StumbleUpon, heightening speculation that the e-commerce giant may soon move to unload Skype.
It’s possibly the biggest takeover story that could have realistically hit the frenetic pixels of TechCrunch.com, pointyheaded news personified: a hostile bid by Microsoft (universally loathed) for Google’s mis-firing rival, Yahoo.
Cue the options: Read more
QXL Ricardo, the former dotcom star that has recovered some of its lustre recently, has received a possible bid approach. Shares in the online auction company, which have nearly tripled in value during the past year, rose 175p to £16.85 on the news, valuing the company at £778m. QXL did not disclose the identity of the bidder but analysts believe it could be Ebay or Alibaba.com, the Chinese internet company that floated in Hong Kong this week, tripling its market value.
Ebay on Monday conceded that its controversial acquisition of the internet telephone service Skype had fallen well short of its hopes, writing down the value of its investment in the company by $1.43bn, or nearly 50%. At the same time, Niklas Zennstrom, one of Skype’s founders, quit as the unit’s chief executive after missing out on a pay-day that could have earned him and a handful of other shareholders an extra $1.2bn. The write-down and management upheaval come two years after Ebay unveiled its controversial plan to make Skype the third leg of an expanding internet conglomerate, alongside its e-commerce and online payments businesses.
Loot, the classified advertising magazine that attracted a valuation of £190m at the height of the dotcom boom, could be sold by Daily Mail and General Trust for substantially less. The media group said Wednesday it was studying a possible disposal of the magazine, after receiving expressions of interest from possible suitors. Apax Partners, which operates the Autotrader classified magazine in a joint venture with Guardian Media Group, is understood to be a candidate. Other possible acquirers could include an online marketplace such as Ebay or QXL Ricardo.
Ebay, the online auction group, has agreed to buy Stubhub, an online ticket exchange that allows fans to buy and sell tickets for sports games and concerts without resorting to illegal touts, for $310m cash. Stubhub, which collects 25 per cent of the value of any ticket sold over its service, recorded net revenues of $110m last year from selling more than $450m worth of tickets – more than twice the value of tickets it helped sell the previous year. Acquiring Stubhub will bring Ebay a fast-growing US business that claims a larger share of the secondary market for tickets than Ebay or other rivals such as Craigslist or Ticketmaster. Deloitte named Stubhub the fastest growing technology company in Silicon Valley last year.