eBay (Nasdaq: EBAY) is doing some holiday shopping of its own.
BusinessInsider.com is reporting that the company behind the leading auction website and the popular PayPal platform is buying Milo.com for $75 million.
It seems a surprising choice, at first. Milo has been called the anti-Amazon for its ability to send traffic to bricks-and-mortar merchants. The local shopping engine scours prices and availability in real time for area stores, arming Web-savvy consumers with the ability to get what they want in a manner of minutes, instead of days through e-commerce.
Wait a minute. Won't eBay be sending potential buyers away from its auction sellers? PayPal's penetration in cyberspace is impressive, but the same can't be said for physical retail. Isn't Milo really more of the anti-eBay than it is an enemy of Amazon.com (Nasdaq: AMZN), shooing buyers away from Web-based auctions and financial transactions?
Buying Milo begins to make a lot more sense when you realize that Milo is unlikely to be incorporated into eBay.com itself. Just as eBay's free classified websites are incremental to eBay's flagship business, most visitors to Milo or eBay won't even realize that there's a corporate connection.
There may still be synergy. If a search for a product on Milo exhausts its selection of 3 million locally available products through 52,000 stores -- including Best Buy (NYSE: BBY), Toys "R" Us, and Target (NYSE: TGT) -- a link to the folks selling it through eBay would be a win-win solution.
It would be trickier, but traffic can flow the other way under the right circumstances in a way that would make sure eBay sellers are keeping their prices honest.
Sure, snapping up Overstock.com (Nasdaq: OSTK) or the majority stake of MercadoLibre (Nasdaq: MELI) that it doesn't already own would be more logical purchases, but eBay already telegraphed a move into physical comparison shopping when it acquired barcode scanning app giant RedLaser this summer.
Milo makes sense, especially at a price point that provides a sharp contrast to Google's (Nasdaq: GOOG) Groupon insanity.
What should eBay buy next? Share your thoughts in the comments box below.
