Like the Phoenix from its Ashes: StumbleUpon Buys Itself Back from eBay
In May 2007, eBay purchased StumbleUpon at $75 million, to much confusion in the blogosphere. At the time, eBay was taking a “wait and see” approach before integrating any of its holdings with the sharing and discovery toolbar. Just under two years later, with the help of well-known VCs, the service is returning to its roots as an independent start up, including bringing the founders, Garrett Camp and Geoff Smith, back.
Camp, who will take the CEO role, said in the release:
We are grateful to eBay for its guidance. However, we realized there were few long-term synergies between the two businesses. It is best for us to part ways and focus on our respective strengths
It took them two years to see that there were “few long-term synergies” between a way to navigate to web pages people like and an online auction service? What were the short-term synergies?
Wait, wait—don’t tell me. There were 75 million short-term synergies, huh?
If I had to bet, I’d say that the price was right at the time for a popular and well-hyped web service. But since then, the value has tumbled with the rest of the economy—and since their then-parent couldn’t figure out what to do with them anyway. Buying themselves out of the eBay stable still probably left StumbleUpon with a net gain.
Meanwhile, eBay continues to struggle with its direction with its VoIP service, Skype, and finding the long-term synergies there. Is the popular telephony service the next to leave eBay’s fold?
What do you think? Is StumbleUpon better off on its own? Why did eBay acquire them in the first place?