eBay Looks to Build Super Open Source eCommerce Platform

The world’s most popular consumer-to-consumer e-commerce company, eBay Inc., has announced the company has entered into a definitive agreement to acquire Magento Inc., the company that develops open-source e-commerce systems that make it simple for smaller retailers to sell their merchandise through the Internet.

 eBay will integrate the newly acquired Magento assets as part of a new commerce group called X.Commerce, coupled with existing technologies, like PayPal integration, with the aim of creating a full-featured open commerce platform. eBay will also be integrating other technologies from previous acquisitions, including technologies from GSI commerce, another firm eBay has agreed to acquire (that deal has yet to close).

Consumers and businesses now make purchases from the Internet through multiple devices, including mobile devices, however, smaller retailers have adapted slowly to this new market landscape primarily due to prohibitive costs in developing software.

eBay Inc. chief executive John Donahoe said in a statement, “the focus of this new business is to provide ways for consumers and merchants to shop, sell, pay, and be paid, by leveraging our companies technology assets,”

Donahoe went on to say, “Combined, we believe these acquisitions will position us to become the strategic partner of choice for retailers of all sizes.”

Thousands of merchants, including John Deere, Movado, Officemax, Nokia, and Ford, among many other companies use Magento.

eBay does not plan to immediately shut Magento down after the acquisition completes, rather, it will integrate the newly acquired software assets in X.commerce, and possibly, later down the road the company could transition Magento into X.commerce.

Exact terms of the Magento acquisition, including the purchase price, are being kept strictly private. The company did confirm that the deal would close some time in the third quarter of this fiscal year.

By making X.commerce open source, eBay is hoping developers will adopt the new platform by creating customized solutions with various ways to monetize, which would also accelerate innovation, according to eBay.

eBay says the first X.commerce developers conference is scheduled to take place later this year in October.

The eBay stock (NASDAQ:EBAY) closed up about 120 basis points during yesterday’s trading session to $29.92 per share.