There is an interesting article at Seeking Alpha called “Why ‘GooBay’ Makes Sense.” Obviously this is a “what if Google bought eBay?” piece, and feedback to the article thus far isn’t real keen on the idea, but there are some valid points throughout the article nevertheless.
Mainly, the article talks about how Google is a “one trick pony” in that nearly all of its revenue comes from search engine advertising no matter how many products the company offers (although I would contend that they are poised to get a decent amount from YouTube as well).
The author says Google’s pony has a very good trick, but it is still one trick. Why don’t they buy eBay? The author writes:
I ask why not? It’s a natural fit. Google has already tried to create an eBay clone with Google Base. It already tried to create a PayPal clone with Google Checkout. It was also no secret that Google was one of the few suitors during the bidding wars for Skype.
As I’ve discussed in previous articles; many investors do not realize that eBay.com is a huge conglomerate of dot com properties. My previous thesis even went as far as showing that eBay.com proper was actually not even priced in at a valuation. That was when eBay was trading far higher than today. Based on current valuation – eBay is even more of a compelling value play. (Its price is nearing book value.)
The article goes into a lot of detail and talks specifically about the benefits of owning properties like Skype and PayPal. One thing it does not mention is eBay’s ownership of StumbleUpon, a service that Google was rumored to be in talks to buy before eBay acquired it in 2007, although the company apparently hasn’t jumped on it since eBay has expressed interest in unloading it.
There is no question that disgruntled eBayers who have time and time again bashed the company’s management and its decisions would welcome a fresh start from the company, but just the same, many would rather not see Google tainted by it either.
For the record, this is just one person’s ideas, and to the best of my knowledge eBay has not expressed interest in selling and Google has not expressed interest in buying. It’s just one of those things that people think about and like to talk about.
