Wednesday, March 26, 2008

Would eBay Acquire Overstock?

A recent Business Week article suggests that Overstock may be on eBay's acquisition radar, "Analysts see several additional targets for eBay this year that look like good deals. Overstock.com (OSTK), an online retailer that sells surplus merchandise at a discount, has declined 75% from its Oct. 31 high, to $9.50 a share. "It looks like a great bargain," says American Technology Research analyst Tim Boyd. (Overstock is adamant that it is not for sale.) "

IMO, the move makes some sense. Though I would think Amazon would be a more likely suitor. The purchase would certainly be cheap; Overstock has a high percentage of female shoppers and still a fair amount of traffic.

Ebay, of course would turn Overstock into a true marketplace and I'm assuming they would get out of the "owning inventory" business. They could open the door to a more controlled Fixed Price model and expand into numerous other categories providing more options for 3P merchants.

Overstock has never made a profit in its history, but that would change under eBay management -- they know how to wring profit out of a marketplace.

My chief concern is that eBay would run it like they do half.com or eBay Express and not commit any real resources to growing the business.

After Amazon and eBay, there are not many viable marketplace properties available any more; Overstock, Buy.com and Etsy are second tier marketplaces that can add value to both eBay and Amazon.

If eBay is seriously thinking about a move like this, I'm sure Amazon is not just sitting back twiddling their thumbs.

5 comments:

permacrisis said...

No, Randy-- GOOGLE should buy it with the dough they just saved fom batting ".000" on the FCC's 700 Mhz spectrum auction. They are flush with cash.

I had really hoped Patrick would jump at the huge opportunity he was handed with ebays winter announcement. He has a big mouth and a chip on his shoulder. He knows how to use them.

Most important of all, he was not afraid of being sued. He cold have run the ultimate smear campaign against ebay, and snapped up every disillusioned seller, and I mean EVERY single one. The man knows how to wage a hate campaign. Against wall st such campaigns are futile-- but in the member community, they resonate soundly.

This was PB's big chance to be the Internet Good Guy. I am tremendously disappointed.

I think however that where Patrick struck out, Google can set up "across the street" again, and really tick ebay off! Google! Buy the O!

Guy Fawkes said...

Patrick Byrne is too busy indulging himself on his blog. Leave a message after the beep and he might get back to you on Overstock BUSINESS matters (you know, like the impending purchase of his failing company).

I wouldn't hold your breath however.

Randy Smythe said...

It all comes down to Patrick Byrne!

At some point you would think the shareholders would say enough of this circus, lets tuen this business over to a grown-up.

Sue Bailey said...

I think Patrick Byrne should be given his own comedy show.

permacrisis said...

There's a video of him lecturing at Boston University which was actually pretty good, it coulda been Michael Madsen filling in. But that was before Deep Capture, NAACP problems, and other sticky stuff.

If run competently Overstock could really be something. Sabine Ehrenfeld got them off to a good start, maybe she could operate the company! I for one would watch THAT press conference.