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January 10, 2007

eBay buying Stubhub?

The financial community is abuzz with rumors of eBay acquiring Stubhub.com.  The rumors put the all-cash deal in the "low $300m" range.  Stubhub's GMV is around $400m and i believe they have a take rate in the 15-20% range so their revenues must be in the $60-80m range so this equates to a 3-5X multiple which is pretty decent.  It's no Skype though!

I think this makes sense.  Stubhub has really taken the ticket category away form eBay, but its success has drawn in the likes of Ticketmaster who now have their own rapidly growing auction site.

It's good to see eBay buying things that directly relate to their core business.  My biggest concern is Stubhub takes some risks that eBay does not typically take in tickets so hopefully eBay won't de-stubhub-ify Stubhub.

Another interesting angle - how quickly can ebay get that $400m going through Paypal?  A nice little bump in TPV possible there...

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