For Ebay, which is best known for its auction site and online payment service PayPal, the addition of GSI will strengthen its position as an online retail powerhouse and make it more competitive with rival Amazon.
“We intend to lead the next generation of commerce innovation,” Ebay’s chief executive, John Donahoe, said in a statement. “With its complementary strengths, GSI will extend the power of our portfolio. With Ebay, PayPal, GSI and our global platform capabilities, we are focused on delivering new ways for retailers and brands of all sizes — from sole proprietors to large merchants.”
The company said it plans to divest 100 per cent of GSI’s licensed sports-merchandise business, and 70 per cent of online retail sites Shop Runner and Rue La La, because they are not central to Ebay’s growth strategy. Michael Rubin, GSI’s founder and CEO, will head a newly formed holding company with the divested firms.
According to Bloomberg, Ebay said the purchase will result in savings of about US$60 million by 2013.
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