California-based eBay, one of the biggest online auction sites in the world, today acquired Baazee.com Inc and its wholly owned subsidiary, Baazee.com India Pvt Ltd, in a $50 million all-cash deal.
With this, eBay will buy out the Rupert Murdoch-controlled News Corp (the largest shareholder), ICICI Ventures, Bid or Buy, Global Bridge Ventures, E-Vision Partners and some angel investors which are the current shareholders of the company.
The acquisition is expected to be completed in the third quarter of calendar year 2004. eBay will retain all Baazee’s 100 employees, who will be offered stock options in eBay after the acquisition is effected.
Started in January 2000, Baazee.com is a subsidiary of the Delaware-based Baazee.com Inc. It is yet to break even. eBay intends to invest more in Baazee, in technology upgradation and expanding the customer base to class B and class C towns.
Baazee.com, floated by Avnish Bajaj (chairman and CEO) and Suvir Sujan (co-CEO), currently has more than 1 million “confirmed registered” users who trade in a wide range of categories, including electronics, cameras, phones, computers, movies, mobile phones, music, toys and travel.
Commenting on the acquisition, Gil Penchina, vice- president (international), eBay, said: “This agreement will allow eBay to expand its global footprint into the nascent but growing Indian market. Also, it will allow buyers and sellers in India and around the world to gain access to a broader range of choice.”
With tariffs coming down exports will receive a further boost.”
He added, "We have seen both the short term size of the business as well as the long term opportunity in the country." India currently has 17 million internet users and the number of users is expected to grow to more than 30 million by 2006.