EBay buying StubHub for $310M in cash
(AP)Updated: 2007-01-11 11:21
SAN FRANCISCO - EBay Inc. is buying rapidly growing online ticket broker StubHub Inc. for $310 million in cash, further expanding the Internet auctioneer's electronic bazaar.
 StubHub Inc. CEO Jeff Fluhr is photographed at his company's headquarters in San Francisco, Wednesday, Dec. 20, 2006. [AP]  |
StubHub's sale, expected to close before April, punctuates another improbable Internet success story.
Jeff Fluhr, StubHub's 32-year-old co-founder and chief executive, launched the San Francisco startup against the dreary backdrop of the dot-com bust 6 1/2 years ago with another former student at Stanford Graduate School of Business, Eric Baker.
"StubHub's business model is an excellent fit with eBay, a company we've admired for a long time," Fluhr said in a statement. "StubHub exists to serve passionate fans and we feel great knowing our customers will benefit from the power of eBay and its community of users."
EBay's market value has plunged by nearly 50 percent, or $37 billion, over the past two years amid investor concerns about slowing growth in its online auctions, prodding management to expand through into other channels of electronic commerce.
Its recent acquisitions have included Internet phone service Skype and online price comparison service Shopping.com, neither of which have become as integral to eBay as its 2002 purchase of online payment service PayPal.
StubHub operates an online market for reselling tickets to major events, creating an alternative market that has been thriving even as its existence incensed some of the sports teams whose tickets are being resold above their face value.
StubHub says buyers paid more than $400 million for tickets sold on its site in 2006, generating more than $100 million in revenue last year. People pay a 15 percent fee to sell tickets on the site, while the buyers are charged a 10 percent commission.
Since its inception, StubHub has brokered the sale of more than 5 million tickets.
Although the privately held company doesn't disclose profits, StubHub is doing well enough to employ about 350 workers in San Francisco, a Hartford, Conn. call center and 10 other small offices scattered across the country.
Fluhr had been mulling a possible initial public offering but apparently tabled those plans after eBay intensified its courtship.
Ebay has been pursuing StubHub off and on for years and nearly bought the startup for $20 million in 2002 before negotiations fell apart.
StubHub is "a perfect complement to eBay's tickets business," said Bill Cobb,
president of the auctioneer's North America marketplace. "Together we can
strengthen both businesses and provide fans with more choice and better
service."
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