eBay buys GSI Commerce

eBay has completed the purchase of GSI Commerce, an American ecommerce company which provide online stores, marketing, customer support, payment processing and fraud & web security services, for $2.4b in cash and debt.

"Combined with eBay Marketplaces and PayPal, we believe GSI will enhance our position as the leading strategic global commerce partner of choice for retailers and brands of all sizes," said eBay’s President and CEO, John Donahoe. He continued by saying "The acquisition of GSI, which offers the most comprehensive integrated suite of online commerce and interactive marketing services available, will significantly strengthen our ability to connect buyers and sellers worldwide."

eBay has said it plans to sell all the additional services and companies owned by GSI, this includes a licensed sports merchandise business and a majority percentage of the subscription-shipping company ShopRunner, although eBay plans to maintain 30% share. These companies will be sold to a new business headed by the GSI founder, Michael Rubin.

Although this acquisition might help eBay to expand on their existing services, John Donahoe explained that it was essential to spin off the sports merchandise company because "we don’t want to be in competition with sellers, and that business would be in competition with them.". As for ShopRunner he said that it was a little different, "I would characterize it as a near-term operating loss and a huge opportunity that if we tried to realize, we’d probably screw it up. In Michael, we see a guy who can take those concepts to a level we couldn’t imagine, and our 30 percent investment is our indication of what we think Michael could do over time."

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I work for one of the big shipping companies and GSI commerce is a large account for us. They have a facility in Kentucky (one of many I assume) that does order fullfillment/shipping for many webstores such as shoppbs.org nflshop.com mlbstore.com dickssportinggoods.com ruelala.com nascar.com nbastore.com just to name a few off the top of my head. I've seen them easily pump out over 40,000 packages per day to my company alone, with many packages almost certainly to the other large shipping carriers. Suffice it to say that this company has a nice presence in online shopping. Likely a good acquisition for eBay.

GSI is who runs The Dick's Sporting Goods website, they (GSI) are going to be carving out the DCSG, Sports Authority, and a few other sites and creating a new company with those website all the rest were sold to Ebay.