Bloomberg News

EBay Buys Hunch to add Custom Recommendations for Shoppers

November 23, 2011

(Updates with analyst’s comment in fourth paragraph.)

Nov. 21 (Bloomberg) -- EBay Inc., the largest Internet marketplace, acquired closely held Hunch.com to add technology that recommends products and services to shoppers.

Terms weren’t disclosed. Hunch, introduced in 2009, delivers customized suggestions to users based on their individual tastes, using information from social networks and other websites, EBay said in a statement today. Adding New York- based Hunch will help improve the shopping and selling experience for customers, EBay said.

EBay has been investing in new products and making acquisitions as part of Chief Executive Officer John Donahoe’s turnaround effort. The e-commerce company is aiming to mount a bigger challenge to Amazon.com Inc. by adding merchandise from other vendors and bulking up services such as recommendations, mobile payments and integration with social networks.

“Hunch helps understand what you might like based on who you are,” said Colin Gillis, an analyst at BGC Partners LP in New York. “It could help EBay leapfrog Amazon in that capability.”

Gillis rates EBay “buy,” with a target price of $38.

Uncrunched, a technology news website, reported that San Jose, California-based EBay paid about $80 million for Hunch. Johnna Hoff, a spokeswoman at EBay, declined to comment on the price.

EBay shares dropped 3.8 percent to $28.68 at 12:40 p.m. in New York. The stock had gained 7.1 percent this year before today.

--Editors: Jillian Ward, Tom Giles

To contact the reporter on this story: Xu Wang in New York at xwang206@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net


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