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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