eBay's Big App Acquisition

By Rick Aristotle Munarriz | More Articles
June 24, 2010 | Comments (1)

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eBay (Nasdaq: EBAY ) wants to make a bigger splash in comparison shopping. The leading online marketplace is buying RedLaser, a popular barcode scanner application for smartphones.

RedLaser allows Apple (Nasdaq: AAPL ) iPhone owners to scan any barcode they come across. The app then comes back with the lowest prices among online retailers and those carrying the product locally.

It's a hot program, and it's only going to get bigger. As of last month, RedLaser had been downloaded 2 million times, with nearly half of those remaining active users. More than 50 million barcodes have been scanned using the app. Now eBay has nixed the application's $1.99 price tag and made it free for all users. It's currently one of the Top 50 most downloaded free apps through Apple's virtual storefront.

There's naturally a reason for eBay's generosity. In its current incarnation, RedLaser relies on comparison-shopping sites, including TheFind.com and Google's (Nasdaq: GOOG ) Product Search, to smoke out competitive prices. Under eBay's wing, RedLaser will be able to lean on its Shopping.com retail partners and even actual eBay listings.

eBay's namesake auction-site application and mobile PayPal program are already hits in the smartphone space, so RedLaser will be one more way to reach out to Web-savvy consumers who are affluent enough to afford high-end wireless devices.

eBay's in a unique position as a third-party marketplace with its own transaction platform, allowing it to make wider bets when it comes to comparison shopping than Amazon.com (Nasdaq: AMZN ) and Overstock.com (Nasdaq: OSTK ) -- standalone e-tailers with App Store shopping programs.

RedLaser is a perfect fit for eBay, leaving search engines and other comparison-shopping sites with no choice but to shop around to compete.

Have you ever tried a barcode scanner app? Share your experiences in the comments box below.

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Google is a Motley Fool Rule Breakers choice. Apple, Amazon.com, and eBay are Motley Fool Stock Advisor recommendations. Motley Fool Options has recommended a bull call spread position on eBay. Try any of our Foolish newsletter services free for 30 days.

Longtime Fool contributor Rick Munarriz is a satisfied eBay user with 177 positive feedbacks to show for it. He owns no shares in any of the companies in this story and is also a member of the Rule Breakers analytical team, seeking out the next great growth stock early in its defiance. The Fool has a disclosure policy.

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Report this Comment On June 24, 2010, at 6:25 PM, PhilipCohen wrote:

RedLaser won't do eBay any good: due to eBay’s constant fee increases, their prices are no longer the best available. Merchants surely aren’t going to direct buyers to eBay when they can direct them to their own sites.
Why would anyone want buy something that is probably going to direct buyers away from their principal source of revenue? Sounds like another “Skype” purchase to me. Oh, sorry, I forgot, PayPal is going to be eBay’s major growth area in the future. Oh yeah?
Draft Media Release—Confidential
“It is with very great sadness that eBay’s Chief Headless Turkey, John Donahoe (aka “Peter Principle”—among many other derogatory terms), announces the probable demise of eBay’s most ugly daughter, PayPal. PayPal is about to be stricken by particularly virulent strains of Visa+CyberSource and Mastercard open platform, aggravated by an insurmountable lack of direct financial institutions participation and a great deal of PayPal user/merchant dissatisfaction, particularly with respect to PayPal’s grossly unfair, “all responsibility avoiding” UA, primitive risk management processes, and totally unprofessional, buyer-biased, fraud-facilitating, transactions mediation.
“PayPal’s health may therefore be expected to deteriorate and, if ultimately not completely incapacitated, will most likely be eventually confined to its mandatory offering on what little there will be by then left of the Donahoe-devastated eBay marketplaces. There is no cure for this condition, and the “eBafia Don” is particularly saddened by the inevitable presumption that it is unlikely that PayPal will be able to continue to underpin eBay’s sagging bottom line in the future.”
Also, in Australia, unlike all other payments processors, PayPal has declined to sign up to the payments processors’ “Code of Conduct”.
A detailed examination of and prognosis for PayPal (including a further link to the “PayPal Nightmare Tour”) at
http://www.auctionbytes.com/forum/phpBB/viewtopic.php?p=6504...

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