In a move to fortify its second largest market, Stock Advisor recommendation eBay (Nasdaq: EBAY ) is acquiring Germany's ViA-Online GmbH, the company behind auction-management website Afterbuy.com.
Why go after Afterbuy? Well, the site is popular with heavy eBay users in Germany who view the online marketplace as a business, facilitating everything from item listing, inventory management, shipping logistics, and even working in cahoots with your accounting software.
Obviously, the eBay acquisition will expose Afterbuy to a wider global market, making this the kind of deal where synergies really will make the company more valuable in eBay's grubby little hands.
eBay could use the boost, even if shareholders might not see it that way. Though the stock hit a fresh 52-week high this week, eBay is far from perfect at this point.
- Weakness in both Germany and the United States led to a 6% year-over-year dip in global auction listings during the second quarter.
- On Monday, eBay announced a $1.4 billion charge related to last year's Skype acquisition.
- eBay is growing more slowly than overseas players like Korea's Gmarket (Nasdaq: GMKT ) and Latin America's Mercado Libre (Nasdaq: MELI ) .
- Despite "Weird Al" Yankovic's lyrical intent, you really can't find a Dukes of Hazzard ashtray on eBay.
Ashtray void aside, the company isn't buying into its cliff-climbing stock chart. eBay knows that its German and stateside marketplaces need a little refreshing. It took drastic moves in Germany over the summer, propping up listings at eBay.de by slashing listing fees, offering free photo insertions, and charging less for telephone support.
The tweaks have been less dramatic domestically, with eBay trying to make the marketplace fun and addictive. As a response to consumers turning to free listing sites like Craigslist and Google (Nasdaq: GOOG ) Base, eBay recently rolled out a free platform called Kijiji.
So it's good to see that eBay isn't resting on its laurels. It may have overcome the threat of rival websites started by dot-com heavies like Yahoo! (Nasdaq: YHOO ) , Amazon.com (Nasdaq: AMZN ) , and Overstock (Nasdaq: OSTK ) , but it knows that it can't skimp on the afterburners.
Afterbuy? Afterburner? What's the difference?
Signs that CEO Meg Whitman isn't standing still: