eBay To Buy Out Rival For $2.6 Billion

Online ecommerce giant eBay has announced that it will aquire one of its rivals for a tidy $2.6 billion. GSI Commerce will be bought out by the buy sell and online auction site, it was announced early on Monday.

The take over is set to take place in the third quarter of 2011, as reported by Mashable. GSI Services provides things like technology, payment processing, order management, customer services and fulfilment to approximately 180 clients across 14 merchandise categories. They will aid eBay in expanding services to retailers and brands of all sizes which range from sole traders to large merchants.

eBay will return the favour as GSI clients will be able to take full advantage of the ecommerce giant’s PayPal and Marketplace services, eBay’s CEO John Donahoe announced. Another part of the deal will see eBay divest all of GSI’s licensed sports merchandise business, with the addition of 70% of ShopRunner and Rue LaLa. We recently saw that eBay was the second most searched brand of 2010 behind Facebook, and that one of eBay’s users tried selling a new iPad 2 for £124,000!

GSI’s founder and CEO Michael Rubin will be leading a newly formed company where these assets will be sold, so they in a way still belong to GSI. It has been reported that eBay will lend this new company $467 million with Rubin pumping in a further $31 million. Will this new partnership propel eBay ahead of Amazon in terms of ecommerce expansion and dominance?

  • http://www.eahoy.com Pat

    It will be interesting to see how this plays out. Fees are still the biggest problem for the giant. Smaller companies will still have better seller deals when it comes to cost comparison, especially with a social commerce free marketplace, like eAhoy.com.