TMCnet Feature
June 07, 2011

eBay Acquires Magento to Advance its Own E-Commerce Platform

By Beecher Tuttle, TMCnet Contributor

Online auction site eBay (News - Alert) has agreed to acquire e-commerce platform maker Magento. Terms of the deal were not disclosed.

Magento is a popular open source e-commerce solution that enables merchants to be highly creative and flexible when building out the content and functionality of their online stores. For eBay, the deal will allow it to accelerate the development of its own X.Commerce platform, which the company hopes will become an all-in-one resource for merchants and retailers, according to a release. Magento will be at the core of this platform.

“The feedback we’ve heard from external developers has been clear — they don't just want payments or an ecommerce site; they want access to a full set of commerce capabilities to build complete shopping experiences for merchants,” eBay President and CEO John Donahoe noted in a statement.

“We believe the acquisition of Magento and creation of our X.Commerce group will enable us to meet developers’ needs and drive global commerce innovation for retailers and consumers,” he added.

Magento will continue to operate as a separate e-commerce platform in the short-term while eBay looks for additional ways to incorporate it into X.Commerce, according to a company FAQ sheet. Magento also said that it will continue to support its tens of thousands of existing partners and customers. 

eBay plans on providing additional details to developers during the X.Commerce Innovate conference, which kicks off on Oct. 12 in San Francisco.

The acquisition does not come as all that great of a surprise considering the history between the two companies. Just last year, eBay agreed to purchase a 49 percent stake in Magento for $22.5 million.

EBay has been a very active participant in the M&A arena in recent years, particularly in the mobile e-commerce space. With its core auction business floundering, eBay has picked up mobile startups like RedLaser and Milo, as well as digital marketing tools and services provider GSI Commerce (News - Alert), which it bought for a whopping $2.4 billion in March.

The Magento deal is expected to close in the third quarter of this year.

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Beecher Tuttle is a TMCnet contributor. He has extensive experience writing and editing for print publications and online news websites. He has specialized in a variety of industries, including health care technology, politics and education. To read more of his articles, please visit his columnist page.

Edited by Jennifer Russell

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