EBay buys payment firm for almost $1B, lays off over 1,000
EBay announced two acquisitions Monday, at the same time saying it will lay off over 1,000 staff worldwide and cut back on recruitment.
It will pay almost US$1 billion for U.S. online payment company Bill Me Later, and around $390 million in cash for the operator of two Danish classifieds sites, dba.dk and bilbasen.dk.
Bill Me Later is second only to PayPal, the online payment operator that eBay already owns, the company said. The two services complement one another, with Bill Me Later able to offer delayed payment or financing options to eBay customers using PayPal, it said.
EBay will pay $820 million in cash and $125 million in outstanding stock options. It expects to close the deal by the end of the year.
Today, PayPal serves primarily small and medium-size businesses, but the acquisition of Bill Me Later will allow the company to target larger customers, said PayPal President Scott Thompson in a conference call for investors.
PayPal's total payment volume reached $15 billion in the third quarter, eBay President and CEO John Donahoe said in the conference call. Its payment volume will soon exceed that of eBay's, with more than half of its transactions off eBay's site, he said.
This year, Bill Me Later's total payment volume should reach $1 billion, the companies said in a presentation to investors.
The Danish classifieds sites, one linked to newspaper Den Blå Avis and one for automobile buyers, will bring eBay an additional 186 million monthly page views, the company said. It now owns classifieds sites covering 1,000 cities in 20 countries.
The two sites "give us technology we can use to improve our other classified sites," Donahoe said. Worldwide, eBay has more classifieds traffic and three to four times more classifieds revenue than the well-known classifieds site Craigslist, he said, adding that eBay also holds a stake in Craigslist.
Alongside these acquisitions, eBay said it will lay off 1,000 staff and several hundred temporary workers. The worldwide layoffs will allow the company to cut costs, it said, although they will result in restructuring charges of up to $80 million in the fourth quarter.
"We have been very strategic about where these reductions will take place," said Donahoe. The cuts will save the company around $150 million a year, he said.
EBay now expects to exceed its previously announced earnings expectations when it announces its third-quarter earnings on Oct. 15, although revenue will be at the bottom end of the range it indicated in July, it said Monday.
IDG News Service
Build your tech library with our book giveaways.
Windows PowerShell 2.0 Unleashed
By Tyson Kopczynski, Pete Handley, Marco Shaw; Published by Sams
Windows PowerShell Unleashed will not only give you deep mastery over PowerShell but also a greater understanding of the features being introduced in PowerShell 2.0–and show you how to use it to solve your challenges in your production environment. Enter now!
Ubuntu Server Administration
By Michael Jang; Published by McGraw-Hill Osborne Media
Realize a dynamic, stable, and secure Ubuntu Server environment with expert guidance, tips, and techniques from a Linux professional. Ubuntu Server Administration covers every facet of system management -- from users and file systems to performance tuning and troubleshooting. Enter now!
