EBay's purchase of recommendation engine Hunch highlights how the company is looking to improve its service and better compete with Amazon. The deal also sticks out because Hunch isn't a new market as much as it is a feature.
In any case, eBay's purchase of Hunch, which went for $80 million or so according to Michael Arrington, is the 11th disclosed acquisition for 2011. Hunch, based in New York, offers individual recommendations that eBay is hoping to use to make its shopping engine and marketplace more sticky.
Hunch is the type of company that would probably be acquired by Amazon so the deal is one part offense and another part defense. Hunch will remain independent, but its technology will obviously be used at eBay.
Here's how Hunch fits into the eBay's acquisitions over the last three years. Note how the big ones below either revolve around new markets, international expansion, bridging brick and mortar retail with clicks or payment capabilities. Hunch sticks out from the pack below because it's less formed. Hunch is a company that revolves around a Taste Graph and merchant insights and could represent a detour from eBay's previous acquisition playbook.
For the first nine months of 2011, eBay acquired:
- GSI, completed June 17: Provides e-commerce logistics and marketing.
- Brands4friends, German online fashion and lifestyle shopping club in Germany.
- GittiGidiyor, online marketplace in Turkey.
- Zong, mobile carrier billing service. Dropped into eBay's payments business.
- Magneto, open source e-commerce platform.
- Other: eBay has acquired five unnamed companies for the first nine months of 2011 in its Securities and Exchange Commission filings. Two of those businesses fall into eBay's marketplace business and the other three are in payments.
- eBay acquired three companies for an aggregate of $95.9 million. These companies were included in the marketplace business.
- eBay acquired Gmarket, e-commerce marketplace in Korea. Paid $1.2 billion in cash.
- eBay acquired Bill Me Later, a payments and consumer credit outfit, for $817 million.
- Den Blå Avis and BilBasen, two online classified companies in Denmark, were acquired for $392 million.
- Other: eBay also bought four smaller companies for $178.6 million in mostly cash. Three of those businesses wound up in the marketplace unit with one in the payments business.
- eBay CEO: We're at an 'inflection point' in commerce
- eBay's X.commerce platform builds upon purchases for mobile payments
- PayPal Access becomes the Facebook Connect for online payments
- eBay partners with Facebook on social commerce: Want, Own buttons
- eBay to acquire Zong; bolsters global mobile payments strategy
- eBay acquires GSI Commerce for $2.4 billion, eyes Amazon on fulfillment