Now is the time to strike if they are going to make a major move. So for fun, I thought I would lay out my plan. Granted, I haven't got a clue what all the ins and outs of M&A are and what follows is really just for fun. So take this with a grain of salt.
So what should eBay do with all this money?
- Some analysts think they should initiate a one-time dividend of $3. This just doesn't seem like an eBay thing to do.
- Others want them to buy back even more stock, maybe as much as $5 billion. This seems to be the approach that the majority of analysts think will happen.
- Start acquiring smaller companies to fill out the holes in their business. While this seems to be the prudent approach, I don't see them loading up on a lot of little companies. Remember this is the perfect storm that is building. They need to do something big.
- First they need to buy Facebook but not spend anymore than $6 to $7 billion for it.
- Next they merge with Yahoo. Many would say they don't have any real reason to merge with Yahoo if they had Facebook but I think owning Facebook gives eBay a ton more leverage in a deal with Yahoo and Yahoo certainly needs Facebook.
- Lastly, once they have accomplished these two things they then can spin off PayPal.
Amazon, is aggressively challenging their marketplace business. Google, is certainly not going away. Facebook, will only get more expensive. PayPal, may face anti-trust pressure down the road. Yahoo, is struggling right now and the two companies would be a great fit. If not now - when?
BTW, on their own, none of these ideas are original -- except maybe a Facebook purchase, I seem to be the only one calling for that move. I have to thank OnlyeBay for the PayPal spin-off idea and a number of bloggers and analysts think the ebay/Yahoo merger makes sense. I believe though, that I am the only one in the entire blogosphere, who thinks all three should happen in this order. Maybe that makes me crazy - maybe not!
Just my 5 Cents!