I'm not sure I follow/buy the premise of moving second-hand sales to a physical building as beneficial to eBay.

If I'm looking for X, I'd much rather go to an online store, where I have access to several listings of X at varying prices and condition, vs. make a trip to a physical store, see if they have X, and hope that the condition and price matches my expectations.

Maybe if I'm not looking for X, and just want to browse a bunch of stuff (e.g. yardsale/flea market style), then a physical store could make sense.

But, to me, having this middle-man physical presence was already a problem, and eBay solved this.

I just don't feel like eBay needs GameStop.

Now, whether GameStop needs eBay is a different story. But GameStop is in trouble for two reasons:

1. Video games -- and therefore video game sales -- are moving to digital.

2. Physical stores are becoming a thing of the past for retail transactions.

eBay doesn't need GameStop's troubles.

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tombert 6 hours ago | parent | next [-]

I could see it potentially be something like the Walmart pickup service? Last mile delivery is pretty expensive, so conceivably they could offer faster and/or cheaper shipping if you picked it up at a physical store.

I don't know. I don't think this acquisition would be a good idea.

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xp84 6 hours ago | parent | prev [-]

^This. The crazy part is that in today’s PE-style system of things, the incentives…

- GameStop shareholders

- GameStop the company - e.g. employees

- eBay shareholders

- eBay the company - for example its employees

…aren’t necessarily aligned.

If GAME buys EBAY - it’s an exit for the EBAY shareholders, which is easy for them to evaluate as it’s presumably a $ premium over the share price today. If GAME then runs the company into the ground trying to free up the cash to pay off the acquisition debt, as most leveraged buyouts do (especially where retail is involved), that’s not a problem for those already-exited shareholders, though it is probably a problem for employees of either company.

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dagenix 6 hours ago | parent | next [-]

My understanding is that existing Ebay shareholders would get half cash and half stock. In order to actually profit, those shareholders would need to believe that the combined company's stock could be sold off without taking a significant loss.

	▲	xp84 4 hours ago \| parent [-]
		Yeah. On the individual level you can plan to sell immediately, but it sure wouldn't be pretty if a lot of the shareholders decided to do the same!

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3 hours ago | parent | prev | next [-]

[deleted]

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tombert 6 hours ago | parent | prev [-]

If this deal does eventually go through, then it might be a good time for someone to start working on a competitor to take over the online auction space.

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rtkwe 5 hours ago | parent [-]

The biggest headache has always been fraud, eBay gets if from both sides and it's a pretty intractable problem to solve as the middle man.

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xp84 4 hours ago | parent [-]

That's what those huge ~10% final value fees they charge are for. And other revenue such as sponsored listings (pay to boost your item in search results).

As long as they keep the fraud volume below like 5% of sales, I feel like it's just a numbers game, where they just need to get as much sales onto their platform as possible to give them enough operating margin to cover their costs (including fraud) and provide profit.

Admittely, I have no idea how well they're doing at that, I haven't looked at their financial statements or anything.

	▲	rtkwe 3 hours ago \| parent [-]
		Yeah my main point was it's a complete pain in the ass to deal with if you want to do it properly in a way that actually prevents fraud on either side. eBay has kind of just erred one side or the other for most of it's existence and right now the complaints are mostly from the seller side that I see.