In its never-ending quest for global domination, eBay (NASDAQ:EBAY) is forking over the equivalent of $48 million in cash for Sweden's leading auction site.
Snapping up Tradera.com won't have a material impact on eBay's bottom line. The site features more than 750,000 listings at any time, but that pales against the 575.4 million listings that eBay generated across all of its sites this past quarter.
This deal is based more on growing mindshare than propping up profits. eBay launched its own site in Sweden last April. As in previous cases like its EachNet purchase in China, eBay has no problem buying up a regional favorite if it will smooth out its entry and acceptance into a new country. eBay learned that lesson all too well when it bowed out of Japan, after Yahoo! (NASDAQ:YHOO) became the auction marketplace of choice by lining up the right local connections. These days, eBay knows that if it can't command market dominance on its own, it's better off negotiating with a country's leading site than battling against it.
Buying up successful regional auctioneers isn't the only step in eBay's campaign for global superiority. When it teamed up with Wells Fargo (NYSE:WFC) to launch the Billpoint electronic payment service and saw that PayPal was still the transactional format of choice, it forked over the big bucks to buy PayPal. It also nibbled away at others like Half.com and Craigslist when their competing sites threatened eBay's own marketplace.
But that's not why eBay, a winning recommendation for Motley Fool Stock Advisor newsletter service subscribers, bought Skype. I was all for eBay's purchase, even if it meant paying at least $2.6 billion -- and as much as $4.1 billion -- to land the leading Internet voice-chat platform. It's not as if eBay had a budding software empire in the works. However, it rightfully saw Skype as a transaction facilitator with massive global reach. Skype is more popular in Europe than it is domestically, and its purchase should help eBay extend its brand overseas.
Sure, eBay is going to try its best to grow organically at first. But if that doesn't pan out, it's nice to know that there's a big, fat billfold waiting to "Buy it Now" if regional success doesn't materialize overnight.
Longtime Fool contributor Rick Munarriz is a satisfied eBay user, and he's got the 166 positive feedback points to show for it. He doesn't own shares in any of the companies mentioned in this story. Rick is a member of the Rule Breakers analytical team, seeking out the next great growth stock early in its defiance.
