ebay had a busy year, spending $200 million on acquisitions last year, and admittedly, they didn't all make sense. Like Milo an application that lets someone scan an item and then find out what retailers offer the same item in that area and at what price. How would that help ebay or paypal and how could it possibly tie into their long term strategy or are they just buying cool companies for fun?
Well, thank you tech crunch. They wrote a very fascinating article and it was helpful for connecting the dots to make sense of all of ebay’s acquisitions this last year. The boiled down version is that ebay is making a major push to grow paypal's business by making inroads to the offline world by securing a space for paypal in a virtual wallet payment world where consumers cam make purchases in stores via their smartphones. This would happen in an application that is a virtual wallet that securely stores your payment options (visa, MC, amex, and of course, paypal) and you can use this app at the cash register. This would obviously mark a huge transition and area of growth for paypal if they can pull it off.
The only thing I’d contend with is that I’d say the pivot is as good as done. Even if Paypal’s business is still smaller than ebay’s, when you look at the momentum of PayPal and the room for potential growth in that business, it seems like a no brainer that PayPal will soon enough dwarf ebay.
It’s also worth applauding eBay/paypal on this one because, as the article points out, this new business strategy of connecting consumers with brick and mortar retailers is not their core business and arguably, cuts into their pie if a customer can find a product at Target for the same price they can on eBay. It’s a long term strategy and a visionary one where they are willing to forego a smaller piece of the temporary pie to gain access to the enormous pie of payments in the brick & mortar world. Brilliant and gutsy.
Read the article at Tech Crunch here
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