Like most of the ticketing transactions on StubHub, eBay's
StubHub will serve eBay well. Even though eBay sold plenty of live event tickets through its own site, it was through the same catchall interface that the online marketplace uses for all of its auctions. StubHub does it right, with the ability to sort by individual events and then with the available seats from all of the resellers.
The slowest-growing business at eBay happens to be its namesake auction business, so investors should hope that a few key things will go well:
- StubHub will create incremental revenue.
- There won't be a lot of overlap in clientele, so eBay can market to a wider audience.
- eBay's flagship site has been vanilla-bean for way too long. It's time for the company to make each category unique, with niche-specific features.
So is eBay getting the better of the deal? Some would argue that StubHub is. A good scalper knows that the value of tickets falls in price once the performance starts. The writing was on the wall for ticket resellers, as promoters such as Live Nation
Last summer, I explored the many ways in which Ticketmaster was making money in ticket sales. Beyond offering premium presale packages, the company has been a sporting-event reseller for holders of season tickets. With the actual teams promoting the service through their own sites, third-party marketplaces such as StubHub and eBay were going to find it tough to compete.
This does not mean StubHub was doomed. However, it was just one more reason for the company to take the money and run. Chancing an IPO could have been tricky if the niche were being disrupted irreparably by the original ticket distributors.
So let's call this a win-win deal. The buyer is happy. The seller is happy. Now all we need is for the market to be happy and enjoy the show.
Longtime Fool contributor Rick Munarriz has used StubHub, eBay, and Ticketmaster to sell tickets that he didn't need in the past. He does not own shares in any of the companies in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.