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eBay To Acquire GSI Commerce In $2.4 Billion Deal

Online re-seller eBay has decided to buy digital marketing and e-commerce services provider GSI Commerce for $2.4 billion.

The move will allow eBay, which owns online payments company PayPal, to expand its presence in the online retailing market by offering products from high-street retailers.

eBay's platform essentially allows users to auction and purchase used goods, but with this acquisition eBay could move into the core retailer domain, which is primarily dominated by Amazon. The company will be able to forge partnerships with large retailers.

GSI Commerce offers website management and digital marketing services to retail brands like Toys R US, Ralph Lauren, Aéropostale and Kenneth Cole. The company also offers order management, customer service and payment processing services. GSI also owns 7 very large warehouses that allow retailers to store their products.

The current acquisition will result in a drastic change in eBay's business strategy but the company's CEO, John Donahoe, believes that it is the logical thing to do in a changing retail landscape.

“What we see happening today is that commerce is changing rapidly. The boundary between offline and online commerce is coming down at a stunning rate,” Donahoe said in a telephone interview.

“What GSI Commerce in essence does is enable large sellers, large retailers and brands, to meet buyers successfully and effectively. So, GSI fits squarely in our strategy,” he added.