Thursday, May 08, 2008

StubHub a Case Study in M&A

StubHub had been a fantastic ecommerce story "The company was founded in 2000 by Eric Baker and Jeff Fluhr, former Stanford Business School students and investment bankers and is located in San Francisco, CA. Founder Eric Baker left StubHub in 2004 following a falling out with the company, and has started a new company viagogo. StubHub was acquired by eBay in January 2007." Source Wikipedia.

Next to PayPal, StubHub has been the most successful acquisition for eBay and continues to help the eBay Marketplace business stay above water with its high take-rate and growing revenue. StubHub, has successfully managed to get both buyers (10%) and sellers (15%) to pay them to use the service. In a world of "Free" this is a wonderful business model and eBay bought it for $310 million

eBay has not tried to integrate StubHub into the platform, instead choosing to run it as a standalone company. IMO, this was one of the smartest moves they have made. You don’t want to tie it to the flagging eBay business in the public’s mind.

StubHub is led by President Chris Tsakalakis, a former eBay Stores Vice President and the company continues to thrive. As a signal that StubHub is moving into the next stage of development, I recently came across two new job openings at the company. StubHub is looking for a COO (Chief Operating Officer) and a CMO (Chief Marketing Officer) both positions reporting the President Tsakalakis.

StubHub has successfully grown its business, as a separate brand from eBay and the sky appears to be the limit. Business Schools should study the StubHub acquisition and subsequent management as an M&A (Mergers & Acquisitions) Case Study.

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