eBay Acquires Billing and Classifieds Properties for More than $1.3 Billion and Downsizes Staff

October 6th, 2008 at 12:00 am

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eBay Inc. announced today that they have acquired three properties today totaling over $1.2 billion. The largest acquisition was the U.S.-based online payments business Bill Me Later® for approximately $820 million in cash and approximately $125 million in outstanding options. The rest were both from Denmark, dba.dk and bilbasen.dk, online classifieds and vehicles site respectively, for $390 million.

"We are making aggressive moves to strengthen our leadership positions in e-commerce and payments to competitively position our company for long-term growth," said John Donahoe, eBay Inc.’s president and chief executive officer. "Bill Me Later is a perfect complement to our portfolio, a company that belongs with PayPal. Together, PayPal and Bill Me Later will make online payments safer, easier and more convenient than ever."

Moreover the acquisition of the Danish sites was for the company’s expansion in Europe.

"Our classifieds acquisition gives us another market leadership position in Europe for this rapidly growing part of our portfolio," Donahoe said. "We are the global leader in classifieds with top positions in Canada, Australia, Germany, Japan and the United Kingdom, and sites in more than 1,000 cities across 20 countries. The acquisition of dba.dk and bilbasen.dk gives us technology and expertise we can leverage across our classifieds portfolio to create better customer experiences."

Ironically though, eBay is also downsizing its workforce by about 10% to streamline its operations. There will be about 1000 jobs affected by the downsizing plus a several hundred temporary positions. The global reduction is intended to simplify and streamline eBay’s organization, improve the company’s cost structure and strengthen the overall competitiveness of the company’s existing businesses.

The reduction is expected to result in pretax restructuring charges of approximately $70 million to $80 million, with the charges predominantly recorded in the fourth quarter of 2008.