EBay acquires Critical Path to boost phone commerce

California: EBay acquired Critical Path Software, a developer of smartphone applications, to accelerate its lead in mobile commerce.

The acquisition doubles the size of EBay's mobile team, which has dozens of engineers, Steve Yankovich, a vice-president at the company, said today. Terms weren't disclosed for the deal, which EBay called a "talent acquisition."

EBay, the largest e-commerce marketplace, is trying to capitalise on rising demand from consumers shopping on phones, an area where BGC Partners says the company has an early lead.

Chief Executive Officer John Donahoe, halfway through a three-year turnaround, also is seeking ways to use EBay's $5.4 billion (Dh19.834 billion) in cash and marketable securities to spur growth. The company bought RedLaser, a barcode scanner application, in June.

"Our goal is to take our leadership position in mobile commerce and keep going, and keep everyone else in the tail lights," Yankovich said in an interview.

IPhone collaboration

On Apple's recommendation, EBay started working with Critical Path while developing an application for the iPhone that debuted in July 2008. Since then, Portland, Oregon-based Critical Path has helped EBay with applications for its StubHub and classifieds units.

EBay, based in San Jose, California, is on pace to do about $2 billion in gross sales this year through its mobile applications, Donahoe said last month.

Critical Path's team of engineers will stay in Portland, said Steve Romero, the company's founder.

"If we were going to get behind anyone, getting behind the dominant mobile e-commerce player was the way to go," Romero said.

EBay fell 56 cents to $30.19 at 4 pm New York time in Nasdaq Stock Market trading.

market reach

positive numbers

$5.4b

at EBay's disposal in cash and marketable securities

$2b

gross sales forecast for EBay this year