eBay own almost half of Magento

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eBay revealed at their latest analyst day that they own 49% of Magento. Magento announced back in March 2010 that they had received a sizeable investment, but at the time the investor was a not very well kept secret. The revelation by eBay on Thursday this week was the first time that it was officially confirmed that they held 49% of the company.

Magento is a professional open-source ecommerce solution that offers retailers complete flexibility and control over the look, content, and functionality of their online store. As it’s open-source developers can add functionality and tailor the software for a retailers specific requirements. This enables them to add in every business process and flow required to integrate into existing back end accounts and inventory management solutions.

eBay’s commitment to Magento may seem at odds with their aim to be the premier marketplace and payment provider on the Internet, but it makes sense. eBay are becoming much more open to the reality that retailers will not use eBay as the only venue for selling, but that it will be one of a number of avenues to retail. With the addition of major high street retailers their mindset is moving towards becoming an integral part, but not the entire retail operation for merchants.

Magento is a much more solid proposition than eBay Prostores and is already used by many major online retailers. By investing in Magento which is one of the premier ecommerce solutions available they are cementing their position in wider online retail than marketplace business.

12 Responses

  1. Well they are reputed to have 8 billion in cash, so they might as well throw it around to see if any thing works.

    (eg Skype)

  2. Magneto ebay infulence is the magento go, turnkey they opened similar to prostore. Magneto now in a total different direction.

    Why must ebay ruin everything that is pure and well in ecommerce.

  3. Magento is an advanced ecommerce platform so is probably overkill for most Prostore customers.

    We have our Magento site integrated with Amazon which is effective for synchronising inventory and processing orders in one location. eBay integration extensions we have looked at do not appear as effective but hopefully the tie up of the two companies will make integration more advanced.

    As I said in the shopping comparison thread, this is not good news for the likes of Channel Advisor. Why would you pay the high initial charges and ongoing commission to them when you can get more on the open source Magento platform at a fraction of the cost?

    The Magento platform includes feeds for Google Base as standard and modules for other comparison sites can be added.

  4. For eBay, this totally makes sense. When eBay started, setting up your own ecommerce site was difficult and expensive. Now, off the shelf solutions are two a penny: anyone can do it. The only thing eBay really delivers is traffic, and as merchants get better at customer acquisition and retention, that’s going to become less and less relevant.

    What still is a problem for many sellers is managing stock across multiple channels. Though there are commercial solutions for this (many of them advertising on this site!), it’s struck me as crazy for a long time that eBay themselves have offered nothing. It’s almost as if they’re ignoring the great big web out there, and have their heads in the sand that eBay is still the only place people can sell.

    Offering an integrated eBay Store/website package would make absolute sense for them. I hope they do it. I hope they do it without the crazy “we own you” pricing that made Prostores so unattractive.

    Magento, on the other hand, have just shot themselves in the foot with the open source community big time.

  5. Linnworks already intergrates all these platforms very well and without the needs to add custom code to a magento backend that will hog resources.

    Plus linnworks already handles multiple shipping options such as royal mail tracked etc.

    ebay, amazon and intergration with loads of websites and formats.

    An ecommerce backend cant compete.



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