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Ebay spins off StumbleUpon

April 14, 2009 12:23am
by David Gelles

At eBay’s analyst day last month, chief executive John Donahoe said he wasn’t going to force synergies between unrelated properties in eBay’s bulging portfolio of companies.

Most observers figured he was just talking about Skype, the VoIP service which Mr Donahoe has taken to calling a “great standalone business.” But if Mr Donahoe isnt quite ready yet to sell Skype, it turns out there are other eBay companies he is willing to part with.

Today eBay sold StumbleUpon, a content recommendation service, back to its founders and new investors. Ebay bought StumbleUpon for $75m cash in May 2007. Terms of today’s sale were not released.

During StumbleUpon’s short tenure as an eBay company it, well, stumbled. As Mr Donahoe discovered, there were no obvious synergies between it and eBay’s core marketplace business.

StumbleUpon claims to have more than 7.4m users per month when toolbar and widget usage is included. But visits to the StumbleUpon site have declined from more than 3m in March 2008 to roughly half that a year later. Digg, StumbleUpon’s main competitor, continues to dominate online content recommendations.

Garret Camp and Geoff Smith, who founded StumbleUpon in 2001, are returning to the company, with backing from Sherpalo Ventures, Accel Partners and August Capital. Mr Camp will be the new chief executive.

Asked if this could signal the beginning of a wave of spin-offs, eBay spokesman Usher Lieberman said, “Anything else in the portfolio is going to be examined on its own merits.”

Still, with new reports about a potential sale of Skype, it seems Mr Donahoe was not mincing his words in March.

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April 14, 2009 12:23am in Digital media, Internet | Comment

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