In its television ads, eBay describes itself as the place to get "it," whatever it may be. The company deliberately leaves "it" undefined to emphasize the immense variety of goods available for auction on its site. "It" is anything a consumer can imagine. But as eBay expands into myriad new businesses—from telecommunications to social networking—some investors are puzzling over what it (eBay) is becoming.
Since shelling out $1.5 billion in 2002 to acquire online payment processor PayPal, eBay (EBAY) has aggressively expanded into areas well beyond its core business of charging people fees to auction off goods via the Internet. Over the last five years, a spate of acquisitions—some of which are just now generating significant profits—has made the company into something of an enigma. EBay is a Web auctioneer. It's an online payment processor and bank of sorts (PayPal). It's a ticket seller (StubHub). It's a global Internet telephone service (Skype). It's a classified ad service (Kijiji).