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eBay cuts workforce by 10%, spends over $1 billion on acquisitions
By admin | October 7, 2008
Giant online auction house, Ebay, has announced that it is to lay off around 10% of its staff. This is set to cost the company around $80 million dollars as it restructures its operations. It has been estimated that the website’s traffic count has declined by about 11% over the previous two years. However, the firm is still showing its competitive edge by acquiring Bill Me later for just under $1 billion and Danish classifieds website DBA for $380 million
Bill Me Later, which represents a heavy investment for eBay, provides a service that allows ecommerce partners to issue credit to users once it has assessed a buyer’s credit worthiness – a credit check can be calculated in an amazing three seconds once sufficient personal data has been provided. If a buyer is acceptable Bill Me Later pays the merchant for the requested service or item and then issues a bill to the buyer.
The credit and billing service had previously raised over $270 million from Amazon Capital Partners, Cross Point Venture Partners and Azure Capital Partners
Whilst eBay continues to be a dominant force in the online auction and retail sector, it will no doubt be keeping a watchful eye on internet search powerhouse Google which is attempting to grab a chunk of eBay’s 71 million monthly unique visitors. Google is set to launch its latest ‘shopping results’ feature. This new feature will enable visitors to be redirected from eBay to a merchant’s site via a single click.
Amazon has also announced its intention to cash in on eBay’s customer target group by expanding its own services. The online retailer has revealed that it will charge sellers a monthly rate of $40 to feature unlimited stock which can be sent via its Amazon Prime, free shipping service.
Some industry analysts are suggesting that internet companies are showing signs that they are not immune from the financial crisis that is currently creating havoc amongst the world’s stock exchanges. However, some of the larger firms seem set to expand their business model and resist the economic downturn for some time yet.
Topics: Business News |