Ebay’s $307 million cash purchase of StubHub happened at "Buy It Now" speed, but despite all the hoopla surrounding the secondary ticketing market, at least one group thinks eBay’s made the right decision.
The Motley Fool recently gave eBay a thumb’s up with a recommended stock advisory and its financial advisers explained that the company could learn a few things from CEO Jeff Fluhr and the gang.
First, the Fool explained, StubHub’s got ticket reselling down to a science, and the site allows sellers to set a declining price range, which is perfect for items like concert tickets, which go to waste if unsold.
Also, the StubHub purchase will create incremental revenue for eBay, allow eBay to market to a wider audience, and move the company into more niche specific categories, the Fool said.
"If StubHub had wanted to stay single and go public, it would have been one of the more intriguing IPOs of 2007," the Fool wrote. "But it would also have faced several challenges on the horizon."
Controlling the secondary market won’t be easy. With Live Nation, Ticketmaster and many pro sports teams rapidly pushing themselves into the secondary ticketing market, eBay and StubHub are facing tough competition in the near future. Banding together may just keep them afloat while primary ticketers devise new ways to tighten their ticket distribution.