In the midst of difficult times eBay can be up to snatch competitors

It is the right price for new mergers eBay?

EBay made headlines recently when it announced major changes in its tariff structure and feedback system. The move, perceived by many as anti-seller, resulted in numerous boycotts including a recent cut eBay listings for a huge 13%.

EBay refutes these allegations and has claimed unaffected by the boycott.

Perhaps to counteract the decline in sales and reinforces its position as the only possibility of online auctions for many customers, eBay is considering the purchase of smaller competitors and various developers auction Internet and related technologies. EBay, despite stagnating sales and fierce competition from the Amazon and sometimes unsavory Craigslist, has accumulated $ 5 million in cash and short-term investments, which has indicated that it can spend on acquisitions. In addition to these funds, eBay estimates that it will make an additional $ 2.3 billion to $ 2.4 billion in cash during 2008.

Lorraine McDonough, eBay’s vice president of corporate development, which is discussed in an interview with Reuters that eBay is trying to take advantage of the “valuation changes” in acquiring several companies looked last year. He said that these acquisitions have been good strategic fit, but the price was not just right. Now, with the slowing economy, eBay may be able to get a more attractive price. McDonough, “I would like to think with the market readjustment in 2008, perhaps we will have an opportunity to revisit some of these. We kept our powder dry and been disciplined in our approach over the last two years, not the more. Estamos very well positioned to capitalize on any bargains that might be available. “

While many companies are unwilling to be purchased at a price lower than previously discussed, eBay is confident that some of their goals are willing to accept their offers. McDonough said that he personally believed that several deals with prices lower than continue this year. She says, “In the end, I suspect that we will see increased premiums paid public offerings, although lower purchase prices.”

EBay past acquisitions have won praise and criticism. While the PayPal acquisition was viewed by analysts as a big purchase, and a logical business fit, eBay acquisition of the communications company Skype left analysts scratching their heads in disapproval and frowning. These two companies have formed two major divisions of eBay, PayPal, but it has grown steadily and has contributed substantially to earnings, Skype has declined predictable. EBay takes $ 1.4B write-down of Skype outside the purchase price of $ 4.3B USD due to the problems of making money off the Internet voice communications, which are mostly free .

McDonough indicated some concern about the Amazon current success and noted that the competitor may make some of their own movements, declaring, “I can see them increasingly active. I think that their financial situation is improving and its financial flexibility is greatest.”