Thursday, May 31, 2007

EBay Acquires Online Search Site StumbleUpon

EBay Inc. announced Wednesday that it acquired StumbleUpon Inc., a software startup that suggests Web sites based on reader reviews and personal preferences of its members.
The $75 million cash acquisition gives eBay access to about 2.3 million people who have filled out profiles at StumbleUpon, founded in 2001 by three Canadian software engineers in Calgary. The venture capital-funded company, which recently relocated to San Francisco, is considered a pioneer of the so-called "Web 3.0" niche.

The term refers to technology that pairs general Internet search capability with a user's personal data and aggregated community data, theoretically delivering more relevant results than a standard search engine such as Google Inc.

For example, a StumbleUpon search for "cars" could generate a list of Web pages that factor in a user's income, age, gender, home address, current vehicles owned and other demographic data submitted. The search results would also include sites ranked favorably by other StumbleUpon members with similar interests and background.

By contrast, a straight Google search delivers 357 million Web pages ranging from the popular Hollywood movie "Cars" to advertisements for used car dealers and newspaper classified sections.

StumbleUpon is free for users and generates revenue through advertising, though the company doesn't disclose financial information. Members who pay an annual fee bypass advertisements completely.

Michael Buhr, senior director at San Jose-based eBay, will serve as general manager of StumbleUpon. StumbleUpons founders and managers will become eBay employees.

"StumbleUpon is a great fit within our goal of pioneering new communities based on commerce and sustained by trust," Buhr said.

The acquisition is not expected to change eBay's latest financial guidance. The company expects to report second-quarter profit of 31 cents to 33 cents per share on sales in the range of $1.75 billion to $1.8 billion. For the full year, eBay expects profit of $1.30 to $1.34 per share on sales of $7.2 billion to $7.45 billion.

The 12-year-old e-commerce powerhouse had $3.5 billion in cash last month and has been aggressively acquiring smaller companies to compete against rivals ranging from Google to EBay, which already owns Internet phone service Skype and portals such as and, completed the buyout of online ticket reseller StubHub for $310 million earlier this year.

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