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E-Commerce China Dangdang Inc. Message Board

  • ataboyholmes ataboyholmes Sep 1, 2011 11:25 AM Flag

    Objective Look at E-bay aquisition

    I must admit that I have been of the opinion that an aquisition by e-bay was wishful thinking. Well I am starting to change my mind and here is why.

    EBay Looking At Acquisition Targets In Japan, China
    Wall Street Journal - Aug 30, 2011

    This artlcle on it's own didn't convince me that DANG was involved, but the Reuters article that came out made me more of a believer, and here's why. Let take the article apart.

    "While open to acquisition opportunities in China, eBay finds the overall market frothy"

    Translation: We looking to aquire, but the company we are interested in is asking too much"

    With total internet users at 470 million -- exceeding the population of the United States -- China's internet marketplace is dominated by domestic players such as Alibaba Group and E-Commerce China Dangdang Inc

    Note: This is not a quote, Reuters added this not E Bay. But the names mentioned were mentioned for a reason, they are likely candidates.

    "Alibaba unit Taobao, China's largest e-commerce website, was a relative latecomer to the game, but rapidly gained ground on eBay by offering its services for free, in sharp contrast to the U.S. company, which charges fees for transactions, listings and other services.

    The pair engaged in a war on the net and in the media that ended in 2006 when eBay folded its eBay EachNet business into a joint venture run by Hong Kong-listed media company Tom Group Ltd (2383.HK), a move that most considered a withdrawal from the market."

    Translation: We hate Alibaba.

    "No decision had been made on what would happen after its deal with Tom Group expired later this year, Lee said"

    Translation: Oh, yeah, we're dumping Tom Group. Why else all the fuss.

    My take, (and please add your opinions), is this- There is a negotiation in progress, the price is high, e-bay shareholders are being prepared.

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    • I still have doubt on ebay's acquisition. DangDang's business model is quite different than of ebay's. Dang mainly acts like a retail store itself. However I will not be surprised if ebay is really negotiating with Dang just to acquire some established market share.
      Speaking of business model, I think Dang needs to expand the platform and attract whole sellers and OEM products like Amazon did. I am sure they are working on it.

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