eBay Snags StubHub for $310 Million

eBay said Thursday that it had purchased online ticket reseller StubHub in a deal valued at $310 million. The acquisition is expected to be completed by the first quarter of this year.

The auction site already has a fairly active ticket trade through its standard auctions, however the success of StubHub in recent months has made the site into one of eBay's biggest competitors. It grossed about $400 million in sales in 2006.

In a statement announcing the deal, eBay North America president Bill Cobb said the site complemented the auction sites preexisting business. "Together we can strengthen both businesses and provide fans with more choice and better service," he added.

This isn't the first time that the two companies have attempted to work out a deal. Reuters cited sources that claimed a $20 million deal was in the works in 2002, though it fell apart over disagreements in the valuation of the site.

Unlike other ticket resellers, StubHub has actual relationships with major league sports teams across the NFL, NBA, and NHL, and with several NCAA college sports organizations. The service attempts to connect buyers and sellers of tickets in a secure manner.

"This is a deal that makes a lot of sense for eBay since it is a business that is parallel to its core auction business," Internet pundit Om Malik said.

Financial analysts agreed, saying that eBay was picking up one of the best known brands in the ticket reselling industry, and a company with a proven business model.