• by Tameka Kee , June 1, 2007

In what is possibly a move toward sidestepping Google's domination of the search business, eBay has acquired StumbleUpon for $75 million, adding StumbleUpon's collaborative Web-surfing tool to its roster of tech service offerings including PayPal and Skype.

Industry bloggers like Om Malik have commented on one search solution eBay could derive from this acquisition--namely, incorporating a StumbleUpon search box into the Skype toolbar. While eBay has not acknowledged any official integration plans, spokesperson Jose Mallabo said, "the company [StumbleUpon] is really in an early stage--and the technology they have is quite complementary to search."

With StumbleUpon, users highlight their interests across a number of vertical categories such as food, politics, or music, download the application, and then access it by clicking on the "Stumble" button in their toolbar. The service crawls the Web, much like a search engine, producing content--from personal Web pages to videos to product information--that users then rate positively or negatively.

"StumbleUpon's community rating mechanism--the thumbs up or thumbs down choice--is absolutely consistent with the way eBay users provide feedback," said Mallabo, since it involves creating a community around user opinions, recommendations and experience.

eBay has a host of forums, discussion boards and chat rooms, but is interested in "pioneering new communities based on commerce and sustained by trust," said Michael Buhr, senior director, eBay.

Commerce is a key factor in StumbleUpon's business model, as highly targeted advertising is the primary driver of revenue. While users improve the application's relevancy by rating content, they also provide instant feedback to advertisers with every "thumbs up" or "thumbs down." It has been reported that approximately one out of every 100 "stumbles" results in an ad or brand-sponsored content.

San Francisco-based StumbleUpon was founded six years ago, and has secured funding from private investors such as Ram Shriram and Ron Conway (who previously backed such major players as Google and Facebook). The company attracted eBay's attention earlier this year because of the exponential growth of its user base, as a reported 2.3 million members are now actively using the browser add-on to discover and share online content.