Last Updated Jun 16, 2008 3:57 PM EDT
Sure, eBay has opened up its platform to third party developers. And eBay even opened up PayPal too. The eBay announcement gave me a headacheâ€"I hit my head on the keyboard after falling asleep reading the statement (Techmeme).
But eBay as a takeover target? Now things get interesting even though analysts are largely guessing.
To wit: Stifel Nicholaus analyst Scott Devitt says he thinks it's possible that Microsoft would acquire a stake in PayPal and Skype (see Tech Trader Daily for the details). Devitt connects Microsoft's cash-back programs for folks that buy goods through MSN have shown up on eBay. Microsoft also offers PayPal deposits.
Thin evidence of a brewing deal? You bet. Worth making the connection. Yup.
We think that eBay could potentially attract a Microsoft-like suitor in the future, especially if performance in the core business fails to improve; this is primarily because PayPal or Skype could be potentially spun out to make the economics of an acquisition work.Add it up and one analyst has Skype as a reason for a purchase and another citing the service as a spin-off. Bottom line: Microsoft is buying somethingâ€"and eBay is a big something.
Meanwhile, eBay may be a better idea. Consider the following stats via Yahoo Finance:
- eBay's market cap is higher than Yahoo's ($37.6 billion to $32.3 billion);
- eBay has more revenue than Yahoo a year ($8.1 billion to $7.1 billion);
- Forward price to earnings ratio for eBay is 14.63 while Yahoo's is 38.45;
- Quarterly revenue growth year over year is 8.7 percent at Yahoo while eBay is posting growth of 24 percent;
- eBay has annual EBITDA of $2.71 billion compared to Yahoo's $1.38 billion.
- eBay's operating cash flow is $2.84 billion a year compared to Yahoo's $2.27 billion.