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eBay is Close to Acquiring StumbleUpon

9 May, 2007

Current Affairs, Social Media

According to a online report from the Wall Street Journal, eBay is close to finalising its deal to acquire StumbleUpon for the sum of $75 million. The report also says that the deal could still fall through if no final agreement can be reached.

StumbleUpon currently has 2,309,082 users and is growing every day with over 4 million sites stumbled daily. I’ve been a Stumbler since June 2005 and I’ve enjoyed this excellent service almost on a daily business.

The question is why would eBay buy StumbleUpon?

  • I can see why they bought PayPal. Easiest way to pay for your winnings and get paid
  • I think the acquisition of Skype, was the first sign that eBay are expanding or even looking into new markets
  • Or perhaps they just think that buying StumbleUpon would be a good business deal. I tend to agree with them on that. According to TechCrunch StumbleUpon has only raised money once (around $1,5 million). It would be an even better deal for StumbleUpon’s founds but thats another story with an idea like StumbleUpon they deserve it.

So what will it mean for StumbleUpon, well I’ve seen several people venting their concern about, every other page you stumble being an eBay auction or that they liked the thought of this funny little application going big with its quirkiness and independence.

I doubt they will use it to show eBay auctions unless someone already stumbled the auction and its one of your topics, but I guess they will use it to let people find random auctions based on their topics, but as an independent function on eBay or integrated in an eBay tool bar. An alternative could be the function from Amazon and other online merchants The “Other people looked at this…”-function. For some reason I always end up in those circles, but it helps me find a lot of stuff I didn’t even know I needed. The idea is brilliant though and my guess is they make a lot of extra money while the buyers circles around.

Time will show us what happens. One thing is sure though www.petersen-inc.dk will keep you updated!

What do you think this will mean for StumbleUpon? Will the users abandon them? Let me hear your thoughts.

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About Dennis Bjørn Petersen

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  • http://www.smoblog.com/ mblair

    I’ve put a lot of thought into this since the original announcement (and denial from StumbleUpon). It seems to me that in many ways eBay was the first major website to incorporate social media into its core business model. Their use of feedback ratings serves as the foundation for their trusted marketplace.

    I think that they can forsee the merits of this kind of approach when it comes to tagging/rating web content. My gut tells me that they will leave the service mostly alone, but that they want to get some skin in the social media game. The great thing about StumbleUpon is that the user base seems to be a bit broader in terms of interest range than other social media sites such as Digg, Redditt, etc.

    Plus, they have a toolbar. The importance of having real estate in someones browser is only going to grow. Google has been investing a ton in this area. A toolbar not only gives you some good visibility, but has the potential (if they can come up with a feature persuasive enough to have their users turn it on) to track usage statistics. Raw usage statistics are going to be the real gold mine for companies that are able to acquire them.

    Also, because they have a toolbar with some pretty simple options, StumbleUpon is probably the easiest social media service for a beginner to use.

    This all translates to untapped potential. Frankly, I think only Yahoo, Google and maybe AOL are currently positioned to compete against StumbleUpon on their own turf.

    So in a nutshell, I think this is a really savvy investment by eBay, but not too likely to be heavily leveraged as a channel for their auctions. Maybe new Skype and eBay segments on the toolbar but I think even those are a bit iffy.

  • dennisbp

    Thank you very much for your insight Mark.

    I think you are completely right about the toolbar. What easier way to market your brand than right in people’s browser. You see browsers with Google toolbar on alot of PCs.

    Maybe I should program my own. (If I could) ;)

  • http://www.thebetanews.com/ebay-buys-stumbleupon-price-75-million-cash.htm eBay Buys StumbleUpon -Price $75 Million Cash | Petersen Inc.

    [...] Buys StumbleUpon -Price $75 Million Cash As previously reported eBay has bought StumbleUpon for $75 [...]