RealTime IT News

Analysts Smile on Korean eBay Deal

Analysts in both the United States and Korea were reacting favorably today to eBay's plan to spend about $120 million for a majority stake in Internet Auction Co. Ltd., Korea's largest auction-style Web site

Goldman, Sachs analysts said that they "view the acquisition favorably as it extends eBay's platform to the sixth largest global Internet market and because the transaction was done at a favorable value."

And an analyst at SK Securities Co. in Seoul was quoted in published reports as saying the deal is good for both companies "as they don't need to compete with each other in other Asian markets."

eBay said the transaction will involve the purchase of slightly more than 50 percent of the outstanding shares of Internet Auction from three of its major shareholders: Sung Moon Kwon, The Will-bes & Co. Ltd., and KTB Network Co.

The acquisition is expected to increase eBay's 2001 consolidated revenue by approximately $20 million, the company said. On a pro-forma basis, the net income adjusted for non-cash items, such as stock compensation and one-time charges, is expected to lower eBay's 2001 full year net income per share by about one cent. On an as-reported basis eBay's 2001 full year net income per share is expected to be negatively impacted by about two cents.

The deal gives eBay about 2.8 million users in Asia's second-largest online market. Goldman, Sachs said eBay paid about six times Internet Auction's 2001 revenues.

Steven Schwankert is managing editor of asia.internet.com