eBay to dump StumbleUpon, expand classifieds

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TechCrunch are reporting that eBay are to sell StumbleUpon, the website discovery service they bought in May 2007 for $75million. According to TechCrunch’s source, eBay have hired Deutsche Bank to find a buyer for the site.

Whether they’ll make their money back remains to be seen. Page views per visitor rose from an average 7 in 2007, to 19 in 2008, and registered SU users increased from 5m in April to 6m now: that last statistic is, of course, as meaningless as “registered eBay users”. Actual visitors to the site fell by around 70% from 4.4m in July 2007 to 1.3m in July 2008: its fans may be devoted, but its hard to see StumbleUpon as a hot property.

Frankly, the eBay/SU marriage never made a whole bunch of sense. Even StumbleUpon’s blog struggled to find anything that made sense to say about it. “We’re both driven by our community of users, and we are both dedicated to connecting people” seems a deeply woolly excuse to spend $75million, and I’d be tempted to see Meg’s shopaholic tendency behind the purchase.

No more. eBay are rationalising their relationships. The Wall Street Journal reported earlier this week that eBay will be extending their classified ads business:

Jacob Aqraou, general manager of eBay’s global classified business, said he expects the company will take over a “fair” number of companies in the next six months or so. In an interview, Mr. Aqraou said lackluster economic growth and the deepening credit crunch have depressed prices for private companies to such a degree that it now makes more sense to buy established classifieds properties than build new services from scratch. He said eBay’s strategy was to target classified-ad sites that have leading positions in geographies and industry segments in which eBay doesn’t currently compete.

Classified ads are said to be eBay’s fastest growing unit. By using established sites to “fill in the gaps” in their current offerings – Aqraou mentions Scandinavia and Eastern Europe, where eBay’s hold is currently very weak – they can expand at minimal cost and with little risk.

eBayers can also expect to see closer ties between these classified sites and the main eBay marketplace: Auctionbytes reports that eBay sent emails to New York-based users last week, advertising their own free local classifieds site, Kijiji.

One Response

  1. Given (a) the global markets and (b) the rumour mill this looks like a credible move. What is a shame is that eBay didn’t seek to integrate StumbleUpon into the platform somewhat. Buying tech to ensure the competition doesn’t is one thing, but given the speed at which tech is now changing and evolving the window to monetise and grow a product is getting smaller and smaller.

    So why didn’t they play on the serendipitous nature of StumbleUpon to showcase eBay items to buyers? Perhaps the buying experience now needs to be as controlled as possible (ie no surprises) and that eBay admits they have a product that no longer fits their current needs.




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