Feeds

eBay douses PHP ecommerce shop in money love

$22.5m and a 49% stake - our final bid!

Providing a secure and efficient Helpdesk

Auction giant eBay's emerged as the stealth investor in tiny PHP shopping engine specialist Magento.

eBay has invested $22.5m in Magento in return for a 49 per cent stake in the four-year-old company.

eBay made the investment in March 2010 but the name of Magento's backer was kept secret until a recent eBay analyst event where chief technology officer Mark Carges coughed up details here and here.

A 49 per cent stake in a company of 230 people gives eBay considerable control over management and roadmap. A spokesperson for eBay's PayPal subsidiary, which provides eBay's ecommerce infrastructure, classified the relationship though as a "partnership" allowing PayPal to integrate its payment system with Magento's shopping cart.

Magento's chief executive Roy Rubin has also blogged that his company continues to operate independently and work with other payment providers.

Magento targets small and mid-sized businesses looking for an off-the-shelf shopping basket.

The company already offers the M2E product that lets you create eBay listings, synchronize stock levels, and import eBbay transactions and orders.

However, PayPal helped Magento develop its Magento Mobile product for shopping from your smart phone or tablet. The pair is also devising a mobile-ecommerce platform for outdoor sports specialists North Face.

Meanwhile, they collaborated on Magento Go, the company's recently launched Software-as-a-Service (SaaS) built using PHP and targeting businesses that don't want to have to set up and manage their own ecommerce system.

"It's more integration of the shopping cart and payment technology - it lets you do more integrated stuff," the PayPal spokesperson said of the companies' well-funded relationship.

eBay's investment and involvement came after eBay chief executive John Donahoe said he believed PayPal could be eBay's second core business after marketplaces. "PayPal's opportunity and its niche is to power all of e-commerce," Donahoe said in April 2009.

PayPal is built using a variety of technologies, but the website and payment services are build predominantly using Java and C++.

But PHP is the preferred programming language of web developers, and tighter integration with the modules being used to help build their sites could help Donahoe's dream, especially if PayPal can levy more transaction charges on customers' sales.

PayPal generated $91m in net payment volume during its most recent financial year - up 28 per cent. Net revenue was $3.4bn compared to $5.7bn for eBay's market places - growing 23 per cent and eight percent respectively. PayPal has 94.5m active registered accounts.

Meanwhile, PayPal has hired Blackhawk Network founder and CEO Don Kingsborough as vice president for retail and prepaid products. The hire is in line with Donahoe's vision of capitalizing on growth in the PayPal business as eBay's markets slow. eBay said Kingsborough would "help us bring PayPal offline and into traditional retail stores." Blackhawk provides prepaid third party card products and is a subsidiary of retailer Safeway Foods.

"Don's experience in consumer product development, technology, retail, POS and merchant relationships will prove invaluable as we work to bring PayPal to connected devices and the offline world," PayPal said in a blog here. ®

Security for virtualized datacentres

More from The Register

next story
Phones 4u slips into administration after EE cuts ties with Brit mobe retailer
More than 5,500 jobs could be axed if rescue mission fails
Special pleading against mass surveillance won't help anyone
Protecting journalists alone won't protect their sources
Phones 4u website DIES as wounded mobe retailer struggles to stay above water
Founder blames 'ruthless network partners' for implosion
Apple's iPhone 6 first-day sales are MEANINGLESS, mutters analyst
Big weekend queues only represent fruity firm's supply
Radio hams can encrypt, in emergencies, says Ofcom
Consultation promises new spectrum and hints at relaxed licence conditions
Bill Gates, drugs and the internet: Top 10 Larry Ellison quotes
'I certainly never expected to become rich ... this is surreal'
Big Content Australia just blew a big hole in its credibility
AHEDA's research on average content prices did not expose methodology, so appears less than rigourous
EMC, HP blockbuster 'merger' shocker comes a cropper
Stand down, FTC... you can put your feet up for a bit
prev story

Whitepapers

Providing a secure and efficient Helpdesk
A single remote control platform for user support is be key to providing an efficient helpdesk. Retain full control over the way in which screen and keystroke data is transmitted.
A strategic approach to identity relationship management
ForgeRock commissioned Forrester to evaluate companies’ IAM practices and requirements when it comes to customer-facing scenarios versus employee-facing ones.
Saudi Petroleum chooses Tegile storage solution
A storage solution that addresses company growth and performance for business-critical applications of caseware archive and search along with other key operational systems.
WIN a very cool portable ZX Spectrum
Win a one-off portable Spectrum built by legendary hardware hacker Ben Heck
The next step in data security
With recent increased privacy concerns and computers becoming more powerful, the chance of hackers being able to crack smaller-sized RSA keys increases.