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EBay buys online ticket broker

January 11, 2007|From the Associated Press

EBay Inc. is buying rapidly growing online ticket broker StubHub Inc. for $310 million in cash, expanding the San Jose auctioneer's electronic bazaar.

StubHub, whose sale to EBay is expected to close before April, punctuates another improbable Internet success story. Jeff Fluhr, StubHub's co-founder and chief executive, launched the San Francisco start-up against the dreary backdrop of the dot-com bust 6 1/2 years ago with another former student at Stanford Graduate School of Business, Eric Baker.

"StubHub's business model is an excellent fit with EBay, a company we've admired for a long time," Fluhr, 32, said in a statement. "StubHub exists to serve passionate fans, and we feel great knowing our customers will benefit from the power of EBay and its community of users."

EBay's market value has plunged by nearly 50%, or $37 billion, over the last two years amid concerns about slowing growth in its online auctions, prodding management to expand into other channels of e-commerce.

But neither of its recent acquisitions of Internet phone service Skype and online price comparison service have become as integral to EBay as its 2002 purchase of payment service PayPal.

StubHub operates an online market for reselling tickets to major events. It has angered some sports teams whose tickets have been resold at prices above their face values.

StubHub has brokered the sale of more than 5 million tickets. It generated more than $100 million in revenue last year.

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