Space Ramblings

eBay Buys Stumble Upon, Senseless Dot Com Shopping Spree Continues

eBay buying PayPal made sense, it was arguably even a brilliant move since it extended eBay’s presence in online finance. eBay was already at the center of millions of transactions and plugging in Paypal was a no brainer.

Buying Skype on the other hand was a strange move. Sure Skype is a great company but aside from using Paypal to pay your phone bill, there really isn’t much useful integration that can be achieved. Still the one thing you could say for Skype was that its demographic often resembled eBay’s own eclectic middle american to geeky SanFran types.

Stumble Upon on the other hand is just senseless. Picking up Stumble Upon this early in the game before it’s really proven its feasibility and with no real way to tie it into its core businesses resembles the kind of stupidity that burst the dot com bubble in the first place. Why buy Stumble Upon? Well because Digg isn’t for sale and neither is Reddit and you’ve just got to buy something to convince your investors and everyone else that you’re a happening company. The problem is that empty expensive gestures like that ultimately leave companies saddled with some expensive acquisitions that they ultimately either wreck or jettison. It’s happened more times than anyone can count already.

eBay + Skype + PayPal + StumbleUpon is just an equation that makes no sense. It would have been much smart for eBay to develop its own service aimed at its own demographic, rather than grab one with a much younger demographic that isn’t really compatible with its own auction sites and has no real profitability. I mean how exactly are you going to make money from StumbleUpon? eBay, Skype and PayPal are all straightforward and popular services that people pay for or pay into. StumbleUpon is the odd company out at the party. Yes indexing sites are cool now, but so what. If you buy a dot com without having a clear plan for making money from it, you’re just shortchanging investors and behaving irresponsibly.

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