BUSINESS BLOGS
BUSINESS BLOGS
category: business
19 Apr 2007

I was at a shindig last night, actually left my laptop at work, get in this morning, and what did I miss?

eBay buys StumbleUpon (maybe) for $40-50M.  Naturally, everyone has something to say about it.

At first glance, this is a bit of a head scratcher, but Om scratches the surface:

Look at this from the toolbar-and-Skype lens. StumbleUpon makes a toolbar that provides collaborative serendipity to find web sites. The toolbar, if you ask StumbleUpon users provides more useful and productive results, than say Google.

By marrying the toolbar to Skype client, eBay can do an end run around Google’s dominance of the search business. A simple search box inside Skype client is all it would take. It is not that far fetched: Skype has been slowly integrating various different services (including PayPal) into its client, and slowly becoming eBay’s desktop backdoor.

I’m not sure this is so much about search as it is about eBay’s core.  Of course, navigation by tags became important (Delicious), as did recommendational search (SU), but this might have a lot to do with eBay wanting to use SU’s tools and know-how to get the eBay community to extend its transactional might across the Web outside of eBay, now that eBay has Paypal and everyone uses Paypal, it’s much easier for the eBay community to pinpoint bargains away from the eBay.  After all, between blogs, sites with e-commerce capabilities etc. I’d guesstimate that eBay is no longer the automatic place to put up an auction or sale.

Anyway, will read up more about this.  What I love about the deal is that the company never raised VC, so it’s a nice payday for the founders and shareholders.

Of course, at a $50M valuation, it does indeed suggest that social news is not as rich as some thought, and that is normal: your biggest asset is a 12 year about to hit puberty, in Digg’s case.

But, of course, we’ve written about this aplenty before.  Digg might become the poster child for everything that is wrong with VC financing, having risen way too much money to make any buyout offer a reasonable one.  But that’s a separate post.