• Business Week, Monday, June 11, 2007 11:16 AM

It's ambition is enviable, but just where does eBay think its heading? The online auction and e-commerce giant is branching out, having spent some $6 billion on new media acquisitions in the last five years. From online payment service PayPal (which proved to be a smart, synergistic decision) to the $2.6 billion Internet telephony giant Skype (eBay overpaid and the jury's still out), to classified sites around the world, including a 25% interest in Craigslist and Kurant, which sets up online "storefronts" separate from eBay, to ticket reseller StubHub (its newest acquisition), eBay thinks it can be everywhere in the world of e-commerce.

The result has been investor and analyst uncertainty. Perhaps this is because Google is the only Web giant with any success branching out--largely attributable to the fact that its core business continues to grow tremendously. Yahoo once be-everywhere growth strategy backfired, while MSN and AOL have reinvented themselves without much success. So, why should investors believe in eBay's latest growth strategy?

CEO Meg Whitman believes that tapping into the latest trend among big Web firms-Web software tools-will help the company. A new browser plug-in from partner Adobe Systems will allow buyers and sellers to monitor and make eBay transactions from other Web pages. It's a fine move to ramp up usage, but Derek Brown, an analyst with Cantor Fitzgerald, points out that "the off-eBay world is far more competitive," meaning success isn't a certainty.

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