EBay Acquisition to Drive Ecommerce Innovation

EBay's purchase of GSI Commerce for $2.4 billion signals the auction giant's desire to be "partner of choice" for retailers big and small.

Online auction site eBay (NASDAQ:EBAY) is acquiring ecommerce vendor GSI Commerce (NASDAQ:GSIC) for $2.4 billion. The proposed acquisition will see eBay paying $29.95 per GSI share for the deal which is expected to close in the third quarter of 2011.

The deal will enable eBay with new ecommerce backend capabilities as the online auction site scales up for the next generation of its growth.

"We intend to lead the next generation of commerce innovation. 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," said John Donahoe, eBay Inc. President and CEO in a statement. "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."

GSI has over 180 retail customers including the National Football League (NFL), Toys R Us and Ralph Lauren, for its commerce services. EBay sees GSI as providing complementary strengths that will help to extend the overall eBay portfolio.

"With eBay, PayPal, GSI and our global platform capabilities, we are focused on delivering new ways for retailers and brands of all sizes, from sole proprietors to large merchants, to drive innovation, engage customers and help people shop anytime, anywhere and on any device," Donahoe said

The deal could help to give eBay more capabilities as it scales up its business to compete against rivals including Amazon.

"The acquisition gives eBay more competitive weapons to minimize the market share shift to Amazon," Stifel Nicolaus analyst Jordan Rohan told the Wall Street. Journal. "This is a big hole strategically that eBay is trying to plug."

Sean Michael Kerner is a senior editor at InternetNews.com, the news service of Internet.com, the network for technology professionals.

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