Confirmed: Ebay Acquires Milo For $75 Million. Investors Make A Killing.
An update to our post earlier today: We've confirmed that local shopping startup Milo has in fact been acquired by eBay, for $75 million. Business Insider first reported on the possible deal earlier today.
Context & Ripple Effects
Business Insider reported the deal this morning, and TechCrunch now confirms it: local shopping startup Milo goes to eBay for $75 million, with Silicon Alley Insider carrying the same number. The sale caps a short run for a company whose product — real-time local product inventory search — sits exactly where online retail keeps trying to meet physical stores.
For eBay, the fit matters because its own core is under pressure: the company's Q2 2009 results showed Marketplaces declining even as PayPal and Skype grew, and its last mega-deal, Skype, was widely criticized for lacking a clear strategic rationale. Buying Milo reads as an answer to both problems at once — an acquisition aimed squarely at the shopping experience rather than another conglomerate add-on.
First-order effects
- Milo's investors and founders exit at $75 million, a substantial and fast return on a young local-search startup.
- eBay gains Milo's store-level inventory data and local shopping search capability in-house, filling a gap its declining Marketplaces business could not build quickly on its own.
Second-order effects
- Rivals in local shopping search now face an acquirer with far deeper pockets, and comparable local-commerce startups become hotter, pricier acquisition targets as buyers race for inventory data.
- The deal hands eBay ammunition against the narrative set by the Skype purchase — that its big checks lack synergies — which shapes how skeptics judge its next move.
Third-order effects
- If the pattern holds, major e-commerce platforms will buy their way into offline retail via local-inventory startups rather than build the capability, concentrating local shopping data in the hands of a few large marketplaces.
The trend: E-commerce platforms are acquiring local-shopping startups to bridge their online marketplaces with physical store inventories.