Online search engine GoTo.com announced today that it will acquire auction portal AuctionRover.com in an all-stock deal.
GoTo said it would buy AuctionRover for about 3.47 million shares of GoTo stock. With GoTo stock at $48.56 per share in early afternoon trading, the deal would be worth about $169 million.
GoTo said it would incorporate AuctionRover into its shopping services.
The deal comes one month after auction software company OpenSite agreed to acquire AuctionRover competitor Bidder's Edge. And it comes as a growing number of consumers are jumping into online auctions.
Auction leader eBay, for instance, has seen its auction listings grow in the last year from about 1 million items to more than 4 million currently. Meanwhile, Gomez Advisors estimates that consumer spending on online auctions will grow from $4.5 billion last year to $15.5 billion in 2001.
As the online auction format has grown, Web portals such as Excite@Home and the Go Network have started their own auctions to get a piece of the action. A growing number of start-ups have taken a different tack, providing services such as auction search engines, image hosting and discussion boards to auction users.
The latest acquisitions seem to indicate a strong interest in the latter
strategy, said AuctionRover chief executive Scott Wingo. Before making its deal with GoTo, several other firms expressed an interest in acquiring
AuctionRover, Wingo said, although he declined to name which firms contacted the company.
"I think that a lot of big sites are saying, 'Wow, we could start our own
auction site, but providing auction services is a more interesting way of getting into this space,'" he added.
But as they have grown, many of the auction portals have run into conflict with eBay.
eBay has criticized the auction search engines run by many of the sites, saying that they clog its servers and often display incomplete or inaccurate results. As part of that dispute, eBay sued Bidder's Edge and moved to block AuctionWatch from searching its site.
In contrast, AuctionRover signed an agreement with eBay to license its listings for AuctionRover's search engine.
AuctionRover will become a unit of GoTo headed by Wingo. Although GoTo is based in Pasadena, Calif., AuctionRover will stay at its North Carolina headquarters, he said.
Although consumers will still be able to access AuctionRover's features through its URL, Wingo hinted that the name may change.
"There will be a AuctionRover Web site, but it may be called GoTo auctions," he said.