EBay Acquires brands4friends For $200 Million

EBay continued in a shopping mode by announcing plans to purchase German online shopping club brands4friends for nearly $200 million. It was the second online shopping acquisition this month by eBay, which acquired Milo earlier in the month for its expertise in local shopping activities.

While brands4friends will boost eBay’s presence in Europe and help it compete with rival Amazon, the German firm can help eBay in its efforts to enhance its fashion sales in the US, too. Market research studies indicate that as much as 20% of European online fashion sales are attributed to fashion purchases.

“EBay has focused a lot on the fashion vertical,” Stephan Zoll, an eBay manager in Germany, told the Reuters news agency. “So far, the (deal) is focused on Germany. However, we can leverage the expertise that brands4friends has in the shopping club area internationally.”

By acquiring brands4friends, eBay also picks up the German firm’s equity position in UK shopping club SecretSales.com and in a brands4friends affiliate in Japan. Shopping club members get group discounts and the online shopping phenomenon has been gaining traction as online shopping gains among shoppers worldwide.

EBay, which said the deal is expected to close in the first quarter of 2011, added that the acquisition is not expected to have a material impact on its 2011 financial results.

The US shopping giant, based in San Jose, California, has quickly integrated Milo into its infrastructure, in time to take advantage of this season’s holiday boom in online shopping. Milo lists products in local stores on its Web site. Milo’s approach calls for products from 50,000 bricks and mortar stores to be listed online to make it easier for eBay shoppers to find products.

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