EBay Inc. continued its recent acquisition spree by agreeing to buy comparison shopping site Shopping.com Inc. for about $620 million in cash.
The move by the two companies, is designed to benefit eBay’s sellers by giving them access to a new sales channel and a new set of buyers, while Shopping.com will be improved by the addition of eBay’s listings on its site, the companies said.
EBay is much larger than Shopping.com, with annual revenue of $3.3 billion in 2004 and net income of $778.2 million. Shopping.com, in comparison, made $99 million in revenue and had net income of $12.2 million.
Shopping.com has been adding customers at a faster clip than eBay, according to research company ComScore Media Metrix. It attracted 22.6 million unique visitors in April, up 15% from the same month a year earlier, compared with eBay, which had 63.8 million unique visitors, an increase of 6% over the same period.
EBay will pay $21 per share for all the outstanding shares of Shopping.com, the companies said. The deal will reduce eBay’s earnings per share for 2005 on the basis of generally accepted accounting principles, due to stock compensation charges and other factors.
The acquisition is expected to close in the third quarter, subject to the approval of regulators and Shopping.com shareholders.
The move continues something of a buying spree for eBay, which has been looking to boost its business and expand into new areas. In December, it agreed to buy property listings site Rent.com Inc. for $415 million, and a month before that it bought Holland’s top classifieds site, Marktplaats.nl, for $290 million.
Earlier last year it acquired a 25% stake in Craigslist of San Francisco, beefing up its classifieds business.