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Monday, October 6, 2008
eBay adds businesses, cuts jobs
It must have been a busy weekend over at eBay Inc.
Early Monday morning, the online auctioneer announced it is buying two companies that will further its push into the online advertising and payments business.
At the same time, the company said it will ax 1,000 employees - about 10 percent of its workforce - to cut costs and focus more on those anticipated growth areas.
San Jose, Calif.-based eBay said it will pay $820 million in cash to buy Bill Me Later, an online payment business that’s not unlike PayPal, which eBay already owns.
The company also is buying Denmark’s leading classified advertising side, called dba.dk and a related car classified ad business called bilbasen.dk for approximately $390 million in cash.
The money for those big purchases will come partly from costs savings from cutting those 1,000 employees. The company said it will take a fourth-quarter restructuring charge of $70-$80 million as part of the downsizing, but that it expects to save money on salaries and benefits in the long run.
