With its European presence cemented by the acquisition of France's
, online marketplace
can now turn its attention to the next battleground in the business of Internet auctioneering: Asia, where rival
is the established leader.
Late Wednesday, eBay said it purchased Paris-based iBazar, an online auction business with footholds in Belgium, Brazil, France, Italy, the Netherlands, Portugal, Spain and Sweden. The deal eliminates a key European competitor for eBay and is an important step toward realizing the company's goal of establishing one auction site that spans Europe's borders, with the eventual aim of a panglobal site, company executives told analysts and investors in a conference call Thursday morning.
"This acquisition is a decisive event for us," said Meg Whitman, eBay's chief executive, in the call. "It measurably strengthens our global marketplace." The acquisition is an all-stock deal that could be worth as much as $112 million, a price most analysts described as inexpensive, considering that as recently as last fall the market valued iBazar at about $300 million.
In addition, the deal puts the company far ahead of its own stated expansion plans of being in 10 international markets by the end of 2001. After this deal is completed, eBay will operate in 15 countries.
The deal is the third major international acquisition for eBay: It bought Germany's
in 1999 and just last month purchased South Korea's
. And now, with Europe in the bag and an entrance into Latin America's emerging markets through iBazar's Brazil business, the company will be able to focus on the Asian marketplace.
While eBay dominates the online auction business in the U.S. and Europe, Yahoo! owns the Japanese market, thanks to an early partnership between
and Japanese conglomerate
. Consider the numbers: In Japan eBay's listings measure in the thousands, while Yahoo! Japan counts nearly 2.5 million, according to Jeetil Patel, an analyst at
Deutsche Banc Alex. Brown
. Patel has a buy rating on eBay, and his firm has had a banking relationship with the company.
In an earlier interview with
, eBay's Whitman said: "We were late to Japan. Yahoo! Japan is clearly the leader." She said that eBay has confidence in the management at its Korean outfit, which is viewed as a potential launching pad for battling with Yahoo! for Japanese customers.
Kevin Pursglove, eBay spokesman, says, "I think we're looking at a strong foothold in Asia and being able to expand our service throughout Asia," including Japan.
Some analysts say that simply having an operation in Korea will not likely be enough to wrest Japan from Yahoo!. "It's the one area where they haven't been successful," says Timothy Albright, an analyst at
Salomon Smith Barney
. "Maybe they are ceding Japan and focusing on other areas of Asia."
For evidence, Albright pointed out that eBay's German acquisition didn't translate to success in other European markets, and thus led the company to acquire iBazar. "If you look at this business, it's hard to go from one region to another," he says. "I'm not sure you can use strength in Korea to jump in to Japan." Albright has a buy on eBay, and his firm has done no underwriting for the company.
eBay shares recently traded down $2.44, or 5%, at $43.25. A possible explanation for the decline is that the company said the deal will shave about 4 cents from its 2001 pro forma earnings per share.