Industry Reaction: eBay Buys GSI Commerce

Yesterday, eBay announced the acquisition of eCommerce fulfillment and marketing tech company, GSI Commerce for $2.4 billion. Read more.

AdExchanger.com asked the following members of the ad ecosystem:

“What is your take on the acquisition of GSI Commerce by eBay?”

Click a name or scroll down for more:

Jake Bailey, Chief Evangelist , Rich Relevance

Net-net, we think this is a powerful attempt by eBay to compete with some of Amazon’s strengths…

1) Non-Auction selling: eBay has historically had trouble managing and selling large catalogues of structured merchandise (I.e., SKU-level with inventory vs. one-off items), so this will be a nice win in this respect. In other words, this aligns well with their push to selling more fixed-price products to consumers (non-auction).
2) Fulfillment: Amazon has been very successful in offering fulfillment for some of their sellers. One of GSI’s key strengths is in their logistics and fulfillment capabilities.
A competitive question: Along these lines, this move may also be perceived a threat to existing GSI clients. They may not want to “become a fulfillment partner for eBay” because eBay is already heavily competitive in some of GSI’s key categories such as Toys and Sporting Goods.”

Rick Corteville, EVP, Global Accounts, Reprise Media

The purchase is a smart one for eBay as GSI Commerce is one of the leaders in their industry.
Commerce is one of the growth areas that we see in the industry so eBay is further positioning themselves for the future.
This space will evolve from standard commerce enabled websites to mobile, applications, social media, gaming, etc. where users can make transactions.
It will be interesting to see how eBay treats the assets within GSI Commerce’s Marketing Services capabilities. These assets include affiliate marketing (Pepperjam), attribution modeling (ClearSaleing), and even a full service digital agency (TrueAction) which could propel what eBay can provide to their clients.
How they staff/evolve these services/products will be key as they have the potential of being strong revenue drivers.
In addition to Commerce, we see another growth area in CRM/Analytics which these Marketing Services companies can help drive. This will assist in bringing users back to the commerce environment through proper profiling / segmentation / tracking / re-targeting which can lead to higher conversion rates and more sales.
From a Search Marketing perspective, eBay has an internal paid search team which could also be leveraged as a service to clients to promote their online retail locations.
However, a missing area here is SEO. Building a strong content presence for commerce experiences will be key to eBay’s partners ranking well within both the major search engines along with the niche/vertical ones.
eBay could also take an approach similar to those of companies like Searchandise and Rich Relevance where they could work in an eBay shopping feed into the commerce purchase process of a stand-alone commerce site. This could drive additional revenue from eBay’s .com site through a performance pricing model.
The international component here, specifically in EMEA, is also very interesting as users in Central and Eastern Europe become more comfortable transacting online. Investing within those markets now could give eBay a leg up versus Amazon.”

Joe Zawadzki, CEO, MediaMath

Low whistle. It’s a significant move because of the thesis behind the acquisition: they are selling off most of the B2C elements of the business – RueLaLa and ShopRunner – and retaining all of the B2B marketing services and technology assets.
eBay as an advertiser is buying a vertically integrated tech stack.
eBay as an agency to other marketers (their small to mid-sized businesses, and well as larger Marketplaces customers) bought a platform to not only power clients’ eBay efforts, but efforts off eBay.
Coupled with the “inhousing” of their data assets recently, eBay seems to be focused on being a one-stop-shop for retailers, small and large. E.g., . prospecting, monetization across existing demand, fulfillment, payment processing, hosting, etc.
It’s a significant leading indicator: a marketer willing to spend $2B to create technology differentiation, and a good signal about what’s necessary to succeed in marketing going forward – build, buy, or partner your way to technology-powered marketing services.

By John Ebbert

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