eBay Stumbling Away from StumbleUpon

StumbleUpon
eBay has received a lot of grief for its acquisition of Skype – most of it focused on the fact it wildly over-paid ($4.2-billion).

To some extent, you could argue Skype was a strategic move because eBay was looking for a way to roll out communication tools to buyers and sellers.

The same, however, can’t be said about StumbleUpon, which eBay acquired last year for about $75-million. Then and now, there doesn’t seem to be a strategic fit between eBay and StumbleUpon, which lets people randomly discover new Web sites.

Finding a strategic fit is like trying to Waldo.

eBay doesn’t get much flack for buying StumbleUpon because $75-million is a proverbial drop in the bucket for a company with revenue of $8-billion.

Now, according to TechCrunch, StumbleUpon is on the block as eBay looks to become more focused at a time when its online auction business is seeing slow growth. StumbleUpon has seen some sweet traffic growth over the past year so finding a buyer should be pretty easy, although volatile economic conditions are a wildcard.

Google might be a buyer given you could match AdSense against StumbleUpon’s discovery engine.

The next key question for eBay is what to do with Skype. It’s a terrific, fast-growing business so there should be no pressure on eBay to do anything with it all unless a blow-you-away offer comes through the door.

My sense is eBay should hold onto Skype, which will have sales of $500-million this year. Within the next couple of years, Skype could be a $1-billion business, and be worth a lot more money if eBay wants to redeploy the cash closer to home.

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