EBay enters the e-commerce arena
Thrifty web-goers will soon have a new option when making online purchases. EBay announced its plan this week to buy GSI Commerce Inc., an e-commerce service company that helps more than 180 brands and retailers with their digital storefronts.
According to the Los Angeles Times, eBay will finalize the acquisition for a record $2.4 billion, its largest purchase since its $2.6 billion takeover of popular Internet phone service Skype in 2005.
“The deal could be a sign that industry leaders such as eBay CEO John Donahoe are preparing for a sea change in retail,” producer Lee Brodie said on CNBC.com.
EBay’s move, seen as a direct jab at competitor Amazon.com, will give the popular auction website an entrance into the explosive Internet retail market.
“EBay is clearly going on the offensive,” David Spitz, president of ChannelAdvisor Corp., said to the Wall Street Journal. “This is definitely a step toward offering a broader array of services for the marketplace.”
EBay’s venture into new types of Web purchases comes while the company is riding a 15-year wave of success.
The website has virtually monopolized all Web-based auctions and continues to grow its user base. According to ABC News, the number of active eBay users in 2010 grew 5 percent from the previous year to 94.5 million.
But according to the Wall Street Journal, eBay’s continued growth is still not up to par with the e-commerce industry’s “double-digit expansion.” The 4.9 percent rise in eBay’s revenue is still only a fraction of the $176 billion e-commerce industry in the U.S.
Whether this deal will give eBay its desired advantage over websites like Amazon.com is still unclear. Nonetheless, savvy web-watchers will be the ultimate beneficiaries of eBay’s entrance into the world of retail, offering yet another cost-effective option for stay-at-home shoppers.
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