Surprise! eBay buys Stubhub

I don't know if anyone saw this coming. For the second time this week, a company I'm fairly close with got bought. This time it was eBay purchasing Stubhub for around $310 million. Unlike most acquisitions of this size, there weren't many rumors floating around until shortly before the announcement (or at least not any that I heard).

So what to make of it? I have no idea. My gut tells me eBay waited too long to pull the trigger and ended up paying a lot more than they needed to. Even today, the price seems a little steep for a company rumored to be doing about $10 million a year in profit.

The synergy (I hate that word) between the two companies' products is apparent, and a solid integration strategy will be definitely be a value add. But it seems as if eBay employed the "chicken with its head cut off" approach: first ignore the competitor, then scramble to build a half-assed response (search for tickets on eBay and it gives you a special search column but doesn't offer anywhere near the functionality of Stubhub), and finally just acquire.

Ok. That was a little harsh. Overall it's a good deal (especially for Stubhub), and I wish them all the best. Their product offerings overlap nicely, and the deal makes a lot of sense. It's hard to believe I sat down with CEO Jeff Flehr and Head of Marketing Mike James less than a week ago. Ebay definitely got a great website and a dynamite team, which should hopefully make the purchase worthwhile in the end. Many congratulations to Jeff, Mike, and the rest.