Last Friday unconfirmed reports surfaced of Google chatting with eBay about buying up to 40% of the company.
This is apparently not true, it was denied, and why would it have been true? Why would Google buy eBay? There aren’t many synergies there, at most its Paypal and Google Wallet, but why would Google want to run an online auction site?
Supposedly this was seen as a reaction from the Apple Pay announcement by Apple, people, and in general I mean the people who are in love with everything Apple, see this as a Paypal killer. I don’t. I’ve already talked about who I think can kill Paypal, and that is Facebook.
Best case scenario for Apple, everyone with an iPhone will use Apple Pay, but that is still a minority of the market. How many phones have Facebook on them? Not to mention, as I said in the linked to post, Facebook is uniquely positioned to be the arbiter of identity, which is so important in payments because of fraud.
But I do think eBay is a ripe acquisition target. The auction service itself hasn’t shown much growth, essentially it functions for used clothing, that’s about it. Interesting handmade things are instead sold on Etsy, and I’d say eBay is drowning in listings of just plain old cheap products made in China. How often do you search eBay and see pages and pages of listings for the same stupid little product? Trying to get more “store” like sellers was a big mistake with eBay, it made their site far less useful. Then there is Paypal, which is so very vulnerable to attack. Paypal grew, and built a moat, because of the tight (almost anti-trustish) integration with eBay, but that moat only exists so long as eBay keeps itself popular as a platform, and I see that waning.
What company could buy eBay? Amazon. The synergies would be ridiculous, can you imagine? Granted, that might be a big meal for Amazon to swallow, but if it could be done, the combined company would be excellent. Amazon definitely is interested in auctions, they ran auctions for awhile (do they still? I don’t know, it has been so long since I checked, they don’t push them anymore if they still have them anyways), but they never got much traction. Way back when Amazon and eBay were like prize fighters duking it out, and eBay solidly won on the auction format…. but since then Amazon has shown itself to be the better run company and I think Amazon could do much more with eBay’s platform than eBay has.
What would be interesting is if some newly flush Internet company, like say Alibaba, made a bid for eBay, would that start a bidding war?
Microsoft could also snoop around but other than put an eBay app on the xbox and a bing search bar on eBay I don’t see much synergy there, but you know Microsoft, always looking for something to belt on the business.
I do definitely think eBay will not be an independent company for much longer. If not Amazon, who? Anyone else have any ideas? Post a comment.
Disclosure: Long Amazon, Facebook, Google, no other positions.