EBay Agrees To Buy Mobile Advertising Provider Where

Steven Russolillo

April 21, 2011

EBay Inc. said Wednesday it will acquire mobile advertising provider Where Inc., a move that will continue to help the Internet giant bridge the gap between online and in-store shopping.

Financial terms of the deal weren't disclosed. EBay, which announced the news on its PayPal blog, said it expects the deal to close later this quarter. Where, which has 4 million users, makes mobile apps that provide local listings for restaurants, bars and shops, and it also suggests places and deals for users based on their location. Where also operates a location-based ad network that lets advertisers show mobile ads to people near their shops.

The deal, which eBay said will provide it with more talent and technology, is part of its broader acquisition strategy. The company said in February that it's looking for deals that meld online and in-store commerce, expand its global footprint and build upon PayPal's digital-wallet strategy. In March, the company said it agreed to buy e-commerce company GSI Commerce Inc. for $2.4 billion in cash and debt.

San Jose-based eBay remains known for its online-auction site, but PayPal--which consumers use to complete e-commerce transactions--is considered the company's leading growth driver and a prime reason why eBay shares have risen more than 60% since July.

Where had raised at least $16 million from investors including GrandBanks Capital, Kodiak Venture Partners and Venrock.

The Boston-based start-up's hyper-local advertising network offers relevant information and deals from 120,000 businesses to more than 50 million mobile phone users every day. Where Chief Executive Walt Doyle said revenue has grown 30% quarter over quarter for the past two years and the company is profitable.

While deals available through Where are currently not the type of social shopping offers made famous by Groupon Inc. or LivingSocial Inc., Doyle said the company's technology would allow for such offers in the future. He declined to discuss future products.

EBay said it initially plans to integrate PayPal into the Where mobile app, and could eventually integrate Where more broadly with its marketplace platform.

"By giving people hyper-local, relevant retailer information and deals on their mobile phones, we see a huge opportunity for local merchants to reach more buyers, and for consumers to get more choice and value when they shop," eBay said on its PayPal blog.

The deal builds upon eBay's acquisition of Milo late last year. Milo has developed software that can plug into a merchant's inventory management system, enabling it to instantly keep tabs on all of the retailer's products.