BrainTrust Query: Here Comes eBay!
Through a special arrangement, presented here for discussion is an excerpt from a current article from Insight-Driven Retailing Blog.
Although I did not expect eBay to acquire GSI Commerce, I can't say it was a complete surprise. In 2010 eBay made some interesting acquisitions leading up to this latest one.
These
include:
- 12/2010 - brand4friends (German flash sales site)
- 12/2010 - Milo (In-store product inventory)
- 12/2010 - Critical Path (Mobile apps)
- 03/2010 - Magento (E-commerce software)
- 06/2010 - RedLaser (Mobile apps)
I previously discussed the acquisition of Critical Path Software and RedLaser as part of their mobile strategy, where they are leading the m-commerce charge. Magento and Milo certainly helped build their ability to host e-commerce sites for brick-and-mortar retailers, although I know of none that have signed on.
GSI Commerce was founded in 1995 with a focus on selling sporting goods. Today they continue to be a leader in that space but also host traditional brick-and-mortar retailer websites like Toys "R" Us, Zales and Aeropostale.
"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. "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."
According to The Wall Street Journal, eBay's "web savvy" may help many of GSI Commerce's e-commerce clients compete better with Amazon. But eBay also stands to benefit if it is able to turn many of GSI's retailers into eBay sellers. It's also expected to help its sellers by leveraging GSI's order processing and shipping expertise.
"Technology is changing how consumers shop, and retailers and brands are changing how they compete," Mr. Donahoe added. "With its complementary strengths, GSI will extend the power of our 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."
It seems that eBay wants to not only be the online selling engine for micro-commerce but possibly move upstream and power retailers' e-commerce websites. This reminds me of the failed attempt (in my opinion) by Amazon to host other retailers' websites. In fact, Toys "R" Us used to be hosted by Amazon until they had a dispute and the toy retailer moved to GSI. Target is still hosted by Amazon for the time being, but since they compete on so many items, this never made sense to me.
So will eBay be able to unfold this strategy successfully like they did with their PayPal acquisition, or will this be another Skype idea? At this point, I'm leaning toward Skype.