December 18, 2004

eBay & Growth

eBay's online auction is a great idea, but even great ideas have their limits, and it looks like eBay has reached the boundaries of the core auction idea. eBay announced yesterday that it was acquiring for $415 million. (W$J) The price is about 10 times expected revenue for 2004. Earlier this year, eBay acquired craigslist, another online rental company. eBay claims that these businesses have a "complementary business model" to eBay's, but I don't see it. To me it looks like eBay is casting around for a new growth market, and this is what they found. Unfortunately, the new businesses are not well situated to add much growth. We are talking about classified ads here!

Posted by Gordon at December 18, 2004 12:55 AM | Businesses of Note