eBay Acquires GSI Commerce For $2.4 Billion In Cash And Debt
March 28th, 2011 by Skip McGrath
Are the days of the small independent seller on eBay over? That is the reaction of many who saw today’s press release that eBay Acquires GSI Commerce For $2.4 Billion In Cash And Debt. this is clearly an attempt by eBay to fill a huge strategic hole and compete more directly with Amazon.
Here are the details: eBay has just announced that it has agreed to buy GSI Commerce, a provider of ecommerce and interactive marketing services for approximately $2.4 billion. With more than 180 customers across 14 merchandise categories, GSI has long-term commerce services relationships with a dozens of major retailers and brands including Toy R Us, the NFL, Ralph Lauren, Aeropostal, ACE hardware, Levis and Timberland.
eBay says it expects GSI clients to benefit from eBay’s Marketplaces and PayPal services, particularly.
According the the Wall St. Journal, “GSI pulled down $1.36 billion in revenue for fiscal 2010 ended Jan. 1, a 35% increase from the prior year largely because of the addition of a company purchased in late 2009. It posted a loss of $36.5 million for the year. eBay, by contrast, posted 2010 revenue of $9.16 billion, and profit of $1.8 billion.”
Basically GSI provides the engines that drive the online shopping portals for these large company’s online business. this deal will give eBay access to the products of all of these retailers to make their goods available on the eBay platform.