EBay sells classified businesses to Norwegian Adevinta

Norwegian Adevinta is buying eBay’s (EBAY) $ 9.2 billion classified ad business to create the world’s largest online classified ad company.

In the age of Google (GOOGL)and Facebook (full board)The classifieds are not exactly a gigantic business: they accounted for only about 3% of the $ 125 billion internet advertising market in 2019, according to the Interactive Advertising Bureau, the Global industry body for digital advertising.

But there was a day when Craigslist and the company that became eBay Classifieds were among the largest advertising platforms on the newly created World Wide Web.

EBay Classifieds Group started 25 years ago, just when CNN Interactive (now CNN.com) went online and eBay was born as AuctionWeb. EBay’s classifieds business was first known as DBA, a popular all-classified Danish newspaper that started publishing in the 1970s. It tried its luck with the new network in 1995, just a few months after “Jerry and David’s Guide to the World Wide Web” became Yahoo. .

EBay bought DBA (and a ton of other classified businesses worldwide) in 2008 to form eBay Classifieds Group. But classifieds were never really essential to eBay’s e-commerce ambitions: Classifieds generated revenue of just $ 248 million in the first quarter of 2020, or just over 10% of the company’s total.

A thinner and badder eBay

Adevinta reportedly bested private equity firm Blackstone and Prosus, part of South African media company Naspers, at the auction of eBay’s classified group, which includes Gumtree, Australian Autotrader and Motors.co.uk.

As part of the transaction, eBay will receive $ 2.5 billion in cash and 540 million shares of Adevinta, or about 44% of the global online classified specialist. That will give eBay continual exposure to the classified ad business, while generating cash.

“This sale it creates short and long-term value for shareholders and customers, while allowing us to participate in the future potential of the Classifieds business, “eBay CEO Jamie Iannone, who replaced David Wenig in April, said Tuesday.

Adevinta, which started trading on the Oslo Stock Exchange last year, saw Its shares rose 32% Tuesday on news of the deal. It was spun off by Schibsted, a Nordic digital media and e-commerce company that started publishing newspapers in the 19th century.

Adevinta’s revenue fell 16% in the second quarter, compared to the same period last year, due to the impact of the coronavirus pandemic.