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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.

Comments

Comment from Kevin
Time March 28, 2011 at 11:24 am

When asked how ebay would pay for the acquisition, Chairman and CEO John Donahue giggled, “We’ll have the cash…..You would NOT believe how much more money we are going to make now that we’re taking 9% of all shipping costs! It’s like printing my own money!”

Comment from Collectible Cal
Time March 28, 2011 at 12:38 pm

I have a phrase I use all the time, IHE. Pronounced “I H E.”

As in, “I hate eBay.”

I’m someone who discovered eBay in the late 90s, fell in love with it both as a collector and soon as a dealer, and built much of my life around it — both with other collectors and other dealers. I’ve bought and sold thousands of items on there over the years. The whole idea of it is fantastic, and although it’s had a lot of ups and downs over the years in terms of policy and site changes, I’ve thought that (barring a few small gripes) from a technical standpoint the system has never been better.

That said, I also feel that it’s never been worse to be a seller on eBay. Everything, just everything, is stacked up against you. And the worst thing of all is the fees. PayPal is no pal of mine. How did we get into this position? And what can we do?

Comment from Martin
Time March 28, 2011 at 5:02 pm

Strange article. Amazon’s used marketplace is chocked full of small sellers. If they were trying to compete with or mirror amazon, why would they be phasing out small sellers?

Comment from bag
Time April 7, 2011 at 2:05 am

why would they be phasing out small sellers?

Comment from Justme
Time May 20, 2011 at 7:13 pm

Try OLA onlineauction as it is only $8 a month, no listing, sellers fees. Maybe it don’t have the punch that Ebay has right now but with a strong gathering it will grow. Check it out for yourself.

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