Investments, News, Technology

EBay acquires Magento

Ebay is all set to buy the ecommerce platform Magneto completely, earlier Ebay had 49 percent stake in the same. The move is seen as an effort to build a broader commerce operating system that includes online, mobile, social and local. It is a foot forward for Ebay as it is looking to be the go-to resource for online and offline retailers, helping connect them to consumers.
Magneto, a Los Angeles based firm provides an open source commerce software suite that allows merchants to create flexible online stores that can be customized simply. Many of the retailers use Magneto and its newly debut software-as-a-service (SaaS) solution called Magneto Go. However, Ebay did not give any detail related to amount they are investing to acquire Magneto. The deal is expected to be inked in the third quarter of this year. The decision of buying out Magneto arrived after $22.5 million investment in Magneto which happened a year earlier.
The takeover of Magneto by Ebay is looked as its relish to build what it calls X.Commerce, an open platform that provide turnkey solution to merchants facilitating everything from local inventory data and discounts to historical information on pricing, transactions and browsing. It then provides tools for payment and helps close the loop on transaction so merchants know how it all came together. Ebay expects to share more about the X.Commerce Innovate conference in October last year.
The press release of Ebay read as “Technology-driven innovation is blurring the lines between online and offline commerce, changing the way consumers shop, and enabling retailers of all sizes to benefit from the latest innovations from the developer community,” said John Donahoe, the president and CEO of eBay. “The feedback we’ve heard from external developers has been clear — they don’t just want payments or an eCommerce site; they want access to a full set of commerce capabilities to build complete shopping experiences for merchants. We believe the acquisition of Magento and creation of our X.Commerce group will enable us to meet developers’ needs and drive global commerce innovation for retailers and consumers.”
The acquisition of Magneto is largely seen as welcome move as Magento was one of the most talked open source platform around the globe. Reiterating on the same Ankur Dinesh Garg, CMD of Wirefoot said “The acquisition may not be a loss to open source community as they claim the open source even after acquisition. It will be boost for online community. The improved functionalities and features align with power of Ebay will certainly upscale its image and performance as well. Also if Ebay chooses to integrate Magneto to market place, it will provide quick extension for sellers for selling on Ebay. After this acquisition Magneto should involve further leveraging a larger developer community”.

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