Anchors aweigh: eBay casts off StumbleUpon

The online auctioneer purchased the "discovery" site in 2007 but never really found a way to use it. It's returned to its status as a venture-backed start-up now.

Amid stormy economic seas, auction giant eBay has thrown overboard StumbleUpon, the recommendation and "discovery" start-up that it purchased in 2007 for approximately $75 million.

Replacing corny nautical puns with corny alcohol puns, this looks like a symptom of the hangover that followed eBay's acquisition binge during Web 2.0's heyday. Even though many speculated that eBay would use StumbleUpon's technology to power product recommendations, the two companies just didn't find a fit--or a way to make a decent return. eBay's acquisition habits have been more vocally criticized when it comes to Skype, the online telephony start-up that was acquired for $2.6 billion in 2005. It's a well-received product, but never had an obvious niche within eBay and observers have long speculated it would do better on its own.

Financial terms of the StumbleUpon spinoff were not disclosed, but it appears that the company was sold back to the two founders, Garrett Camp (who will serve as CEO) and Geoff Smith, and investors Accel Partners, August Capital, and Ram Shriram of Sherpalo Ventures.

"We are grateful to eBay for its guidance. However, we realized there were few long-term synergies between the two businesses. It is best for us to part ways and focus on our respective strengths," Camp said in a statement. "This change makes it possible for StumbleUpon to continue to innovate and focus on becoming the Web's largest recommendation service."

Last fall, a rumor spread that eBay had hired investment bank Deutsche Bank to help find a buyer for StumbleUpon.

The big question now: Will it do the same with Skype ?

 

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