eBay Acquires Bill Me Later to Merge with PayPal

Right when the blogosphere is heavily engaged in discussing rumors of eBay trying to sell StumbleUpon and even suggesting Skype may be the next candidate for the online auctioning giant to sell looking to minimize costs, eBay is announcing yet another acquisition - and rather a large one at that. The acquisition object is Bill Me Later, the service that helps online merchants decide if they should provide a transactional credit to any buyer right at the moment of purchase.

eBay is paying $820 million in cash and will also add $125 million in outstanding options. The deal will be completed by the end of the year.

It is obvious that the acquisition of Bill Me Later is supposed to complement the company’s online payment solutions portfolio where eBay already owns PayPal. The resulting PayPal and Bill Me Later combination will allow for web users to buy multiple products on eBay or elsewhere and choose if they want to pay for them immediately or over time.

In general this acquisition definitely looks like a reasonable one: not only Bill Me Later sounds like a great addition to PayPal, it also draws comparable revenue on its own - in 2009 eBay expects Bill Me Later to generate an estimated $150 million of revenue. You will find more details in the press release.

UPDATE: PaidContent also reports that eBay is having some more acquisitions today with two Danish classifieds sites purchased for $390 million.