eBay announced the acquisition of StubHub, an online marketplace for the resale of event tickets.
The purchase will cost eBay approximately $310 million, and will allow the auction site to increase its presence in the realm of online ticketing, while giving StubHub access to eBay’s technology and resources.
Officials at eBay had denied rumors of a StubHub acquisition as recently as October, but reversed course today by going public with its purchase of the ticket reseller.
“StubHub has been extremely successful in the online tickets segment, and it’s a perfect complement to eBay’s tickets business,” said Bill Cobb, president, eBay North America Marketplaces. “Together we can strengthen both businesses and provide fans with more choice and better service.”
“StubHub’s business model is an excellent fit with eBay, a company we’ve admired for a long time,” said Jeff Fluhr, founder and CEO of StubHub. “StubHub exists to serve passionate fans – and we feel great knowing our customers will benefit from the power of eBay and its community of users.”
It’s a strategic move, to be sure, as StubHub had been quietly infringing upon the online ticket market which eBay highly covets.
Ticket brokering is dangerous territory, with states beginning to crack down on scalpers.
So far, eBay has managed to keep its head out of the noose, as the company never actually has possession of the tickets.
Michael Arrington gives great insight into how the secondary ticket market actually works:
Brokers sell tickets any way they can. They hire scalpers to hang out at events, telling them not to hold too many tickets or cash at any one time in the likely event they are arrested or shaken down by the police. They have their own websites. And they list their tickets on marketplaces like eBay, RazorGator and StubHub. Usually they list the same tickets in multiple places, and if they are sold multiple times they try to find comparable replacement tickets, or just bail on the customer.
So, eBay has that stigma to overcome in this whole venture. Nonetheless, the deal should proper eBay to the forefront of the secondary market.
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Joe is a staff writer for Murdok. Visit Murdok for the latest ebusiness news.
