eBay did what?!?

Acquired Bill Me Later..."Bill Me Later is a convenient and secure way to pay on the web or over the phone. Bill Me Later lets users pay without using a credit card. At checkout, provide your birthday and the last four digits of your social security number and your purchase is complete. It’s that easy!"

Well shazam, credit is so hard to get these days and banks are changing their logos like once a month now and Chuck Schumer (D-NY) is adamant that he wasn't one of our representatives who pushed Freddie and Fannie to loan money to people who's earnings profiles couldn't get them loans several years back. So eBay buys a company that extends credit to people like with a birthday and their SSN. How generous. And eBay completed a wacky day of business by nuking 1,000 people who weren't needed anymore.

Hey, when a company nukes someone brought in by a recruiter, do these recruiters see their positive metrics now head south? Something like a RDR or Recruiting Deficiency Ratio.

People, layoffs are public admissions that a company's leaders have failed at strategic planning. What the heck was John Donahoe thinking? Who recruited him to eBay?

Dunno, I guess dumb recruiters recruit dumb people.

Comment by pam claughton on October 8, 2008 at 8:11am: Actually this seems a very smart move to me. Bill Me Later complements what PayPal, also an eBay company does. Bill Me Later has been around for quite a while and has made inroads with top eCommerce company's, such as recently landing Amazon.

Comment by pam claughton on October 8, 2008 at 8:16am: Also, BillMeLater doesn't extend credit to anyone....you must apply at their BillMeLater site, and then once approved you are able to use that credit anywhere that BillMeLater is accepted, similar to the way PayPal works. It's a very cool company.

Comment by Steve Levy on October 8, 2008 at 9:30am: Pam- thanks for reading my drivel. Strategic? Absolutely! BTW, many who love PayPal and are wondering about the acquisition. Yet it's still a credit operation. Making inroads into Amazon is not a justification for it being a great move by eBay.

The financial crisis was "founded" by many great business decisions.

Comment by Steve Levy on October 8, 2008 at 10:28am: To clarify: There's a difference between acquiring a company or investing at fire sale prices a la Warren Buffett and creating a process for people to potentially acquire more debt. Business versus longer term morality. Just like loaning money to people who really shouldn't be borrowing.

Comment by pam claughton on October 8, 2008 at 2:25pm: I could wrong (and likely am) but I got the sense that BillMeLater may have been growing as a competitor to PayPal and this cancels the threat in a sense. Also didn't mean that inroads to Amazon would benefit eBay, was just pointing out that BillMeLater had landed them as a key client, a huge win for them. I've been following BillMeLater for a few years now. :)

Comment by Steve Levy on October 8, 2008 at 3:21pm: PC- It sounded as if I hit a trace nerve (also sounded as if you were following BML). You're right, BML is competition for PP - here's a great link for those (other than PC and me) interested in understanding the acquisition - I won't rehash any of the content so you'll just have to click and read.

Here's a line from a NYT biz blog that summarizes my hesitation - notice I've never said anything about it as a pure business decision...

"But buying a consumer credit business in the middle of a recession is very much a lottery ticket. Since bank stock prices are down, you can have a huge payoff if the one you buy has fewer losses than the market expects. But if its lending standards were lax, you could well lose everything."

Or as one reader commented, "Basically by buying Bill Me Later, eBay is embracing the consumers who can’t get a credit card, pay their bills on time, and are more or less irresponsible with their spending. Didn’t our financial system just completely go caput because of these same consumers?"