According to a report on TechCrunch, eBay is trying to sell the popular recommendation engine StumbleUpon, which eBay bought for $75 million in early 2007. It was never clear to us why eBay bought StumbleUpon in the first place. When the acquisition was first announced, we speculated that eBay would use StumbleUpon’s technology to create a new, viral way of shopping. In the end, though, eBay never integrated StumbleUpon into its business.
In early 2007, we complained that eBay’s line-up of new services started to look very chaotic. Now, with its auction business slowly declining, it would only make sense for eBay to focus on its core competencies again instead of investing time and money into products that do not contribute to its main business.
StumbleUpon was a bargain at $75 million and probably a worthwhile experiment for eBay, but now that eBay’s future does not look as rosy as it once did, we think it only makes sense for eBay to sell it off again. According to TechCrunch, eBay has hired Deutsche Bank to find a buyer, though the asking price is not clear.
We contacted eBay about these rumors and will update this post once we get a response.
Skype?
It would be easy to draw parallels to eBay’s acquisition of Skype, which eBay bought for the staggering amount of $2.6 billion. Skype, too, was never fully integrated into eBay’s business model. However, as Peter Kafka notes, this extremely high purchase price also makes a sale very difficult now, unless eBay is willing to take a loss. Only a handful of companies are able to pay $3 billion or more, which leaves Google as one of the few potential candidates.
