Ebay Buys Bill Me Later
By Azam on October 6, 2008
Ebay is acquiring Bill Me Later payment system for about $820 million in cash and $125 million in outstanding options. The business offers consumers deferred payments and financing promotions. Ebay will fold Bill Me Later into the PayPal payment offering. Bill Me Later is expected to generate $150 million in revenue in 2009. EBay sees the deal closing in the fourth quarter and adding to earnings in 2011.
EBay also said it would spend more than $1.3 billion to buy companies that bolster its online payments and classifieds businesses as it seeks to improve its performance in a weak U.S. economy.
“We are making aggressive moves to strengthen our leadership positions in e-commerce and payments to competitively position our company for long-term growth,” Mr. Donahoe said. “Bill Me Later is a perfect complement to our portfolio, a company that belongs with PayPal. Together, PayPal and Bill Me Later will make online payments safer, easier and more convenient than ever.”
EBay, which has faced slower growth in its core auction business over the last few years, has been undergoing restructuring. CEO John Donahoe, successor to Meg Whitman , eBay has instituted various changes at the auction business to turn around the decline and attract more repeat buyers and reaccelerate revenue growth.
EBay said the job cuts would affect about 1,000 employees or 10% of the workforce and several hundred temporary workers. The reduction is expected to incur restructuring charges of about $70 million to $80 million, mostly in the fourth quarter.
The company said the job cuts, affecting about 1,000 full-time employees, are “intended to simplify and streamline eBay’s organization, improve the company’s cost structure and strengthen the overall competitiveness of the company’s existing businesses.”
About Bill Me Later
Bill Me Later has significant traction since it has lower fees than credit cards and merchants get a better deal on data sharing. Bill Me Later, which is offered through CIT Bank, based in Salt Lake City, and managed by I4 Commerce, has significant share and a low profile. Bill Me Later is offered by about 700 web and catalog merchants, with about 80% of its business from online retailers. Bill Me Later payment offering clients including the Apple Store, Amazon, Overstock, Walmart.com, Travelocity, and ToysRus.com. Interestingly, Amazon invested in the company and offers competing payment options to ebay.
Categories : TechTags : , Amazon, Bill Me Later, eBay, PayPal