Rumor: eBay Hires Deutsche Bank To Find StumbleUpon Buyer

Posted Sep 19, 2008

eBay Inc. (NASDAQ:EBAY) is rumored to have hired Deutsche Bank to find a buyer to sell off StumbleUpon, the social bookmarking site that they acquired for $75 million.  This rumor was started by a source of TechCrunch.  The price for selling off StumbleUpon is unknown.  I think it is still a mystery for why eBay bought the company in the first place.  What would eBay do with a social bookmarking site? 

As far as traffic measurements go, StumbleUpon had about 1.3 million global visitors and 25 million pageviews this past July.  About a year earlier, the site was bringing in 4.4 million global visitors and 31 million pageviews according to Comscore.  The number of registered users have gone up from 5 million to 6 million in the last 5 months.  StumbleUpon is growing at a moderate pace.  The more registered users, the more your valuation goes up.  I wouldn’t be surprised if eBay was able to resell StumbleUpon for what they paid. 

I’m estimating that Digg has about 3 million registered based on the fact that they had about 1 million users one month ago and their current growth rate.  And they were looking for an acquisition price somewhere north of $200 million.  It was rumored that they were in talks with Google Inc. (NASDAQ:GOOG), but it didn’t work out.

Lately it seems like eBay is barking up a lot of the wrong trees.  eBay is expected to have massive lay-offs.  They are fighting with Craigslist and several fashion designer companies in a legal battle.  A lot of their sellers are leaving due to the fixed-price model shift.  eBay is even having cognitive dissonance about their purchase of Skype. 

Two of the best acquisition deals that eBay made thus far was PayPal and StubHub.  There is actual synergy there.  PayPal runs the whole payment system around eBay auctions.  And StubHub is going to bank when selling the PSLs for the New York Jets.