EBay buys Korean rival's stake for $413 million: report
SEOUL (Reuters) - EBay Inc has agreed to buy a controlling stake in South Korean online retailer Gmarket Inc for $413 million, at a 32.5 percent premium, news service eDaily reported on Monday. — The long-discussed deal …
Context & Ripple Effects
eBay's reported move on Gmarket follows a script it has run before: since agreeing to buy ticket reseller StubHub for $310 million in January 2007 [[a:1177329]], the company has grown by acquiring established marketplaces rather than building them. Per eDaily's Monday report — relayed by Reuters but still unconfirmed by either company — eBay would take a controlling stake in Gmarket for $413 million, paying a 32.5 percent premium to skip a costly greenfield entry into South Korea.
The strategic logic points at payments as much as listings: eBay said in March that it expects PayPal, its second-largest business, to double in size by 2011, and an owned Korean marketplace hands that unit a new stream of transactions to settle.
First-order effects
- Gmarket's shareholders stand to collect a reported 32.5 percent premium on their shares if the $413 million deal eDaily broke is confirmed, and Gmarket passes into eBay control as its Korean operating arm.
- eBay gains a functioning South Korean marketplace immediately instead of launching against entrenched local players, extending the buy-an-established-business approach it used with StubHub.
Second-order effects
- Gmarket's transaction flow becomes feedstock for PayPal's stated goal of doubling by 2011, giving eBay's payments unit a Korean settlement base it does not currently own.
- A confirmed deal sets a hard valuation marker for Korean e-commerce assets: any competing bidder for Gmarket must now beat a 32.5 percent premium.
Third-order effects
- The deal fits a wider pattern of US internet platforms buying established Asian marketplaces outright rather than entering head-on, making ownership of local commerce rails — listings, payments, fulfillment — the contested asset in cross-border expansion.
- If the marketplace-plus-payments structure works in Korea, eBay has a template to repeat in other markets where it lacks a local champion, deepening the company's dependence on PayPal's growth curve.
The trend: Global e-commerce is consolidating as US platforms buy established regional marketplaces and wire their transaction volume into proprietary payments networks like PayPal.