Friday, 12 January 2007
eBay to Buy StubHub for USD 310 Million
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eBay wants its share of the limelight in the online ticket arena. In line with this initiative the company has decided to buy StubHub for about USD 310 million in an all cash deal. "StubHub has been successful in the online tickets segment, and it's a perfect complement to eBay's... |
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eBay wants its share of the limelight in the online ticket arena. In line with this initiative the company has decided to buy StubHub for about USD 310 million in an all cash deal. "StubHub has been successful in the online tickets segment, and it's a perfect complement to eBay's tickets business," said Bill Cobb, eBay's president for North America Marketplaces.
StubHub allows customers to buy and resell tickets to sports events, concerts.. The company generates revenue by charging users 25 percent in fees and commissions on all sales. The company made a staggering USD 400 million in gross sales in 2006, generating about USD 100 million in revenue.
The acquisition seems to be strategically placed with eBay’s growth slowing down due to saturation. According to sources there are a string of acquisitions to come as eBay plans to venture into online classified advertising and fixed price sales.. To name a few other acquisitions—Skype Internet calling service and the e-commerce search engine Shopping.com.
There is some skepticism among analysts, but Morgan Stanley analyst Mary Meeker expects the contrary from eBay’s purchase of StubHub to reaccelerate growth for the company.
The StubHub deal is expected to close in the first quarter of this year, pending approval from regulators and StubHub investors.
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