With news largely being thrown into the category of: what are they thinking? eBay has confirmed month long rumors by announcing that it was buying Web 2.0, new media companyStumble Upon for $75m. Despite the confusion, the logic of the deal may actually make sense.
Stumble Upon, which was founded in Calgary, Canada in 2001 is something of a computer-automated web surfing tool married to a community of users. Either through their website, or browser-integrated buttons, users can ask for a new page and then the website will redirect them (a “stumble”) towards something related. The sites in the system, however, are not purely random. Web Publishers, like Metue for example, can buy placements from Stumble Upon that insure a certain number of page views from Stumble Upon users per day; just another form of website marketing.
It is that paid search component, along with a feature launched in April called “Stumble Thru” which is likely what attracted eBay. StumbleThru lets a user move through the pages of a specific site with the same semi-randomness of full internet stumbling. In other words, they can “stumble” through the listings of eBay auctions, or products at eBay property, Half.com
While the pricing of the deal will raise some eyebrows, and the value of Stumble Upon in the eBay product portfolio will puzzle some, the deal is not completely illogical, nor is the price. eBay spends a tremendous amount of resources keeping its site and name well publicized around the web. Stumble Upon will be an asset in those ongoing marketing efforts.
Here’s a breakdown in more detail:
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