September 12, 2007, 12:00 AM

ChannelAdvisor buys competing e-commerce service provider to eBay sellers

With the addition of 2,000 merchant clients from Marketworks, ChannelAdvisor will provide online marketing services to 5,500 e-retailers. CEO Scot Wingo says he would like to make more acquisitions to broaden his company’s offerings.

ChannelAdvisor Corp. has announced the acquisition of Marketworks, a competing provider of e-commerce services to eBay sellers. ChannelAdvisor CEO Scot Wingo says he would like to make more acquisitions to broaden his company’s offerings.

With the addition of Marketworks’ client portfolio, ChannelAdvisor will provide online marketing services to 5,500 e-retailers. Both companies are privately held and the purchase price was not disclosed.

The two companies competed for the business of larger eBay sellers, but Marketworks also services eBay retailers that sold as little as $1,000 a month, Wingo tells Internet Retailer. ChannelAdvisor’s smallest merchant clients sell in the range of $30,000 to $50,000 monthly, he says. “They go a lot lower, which is attractive to us in that it will give us a more beginner-level product to offer,” Wingo says.

While Marketworks’ business is primarily serving eBay sellers, Wingo says ChannelAdvisor derives about half of its revenue from about 100 large retailers, such as Sears.com, No. 7 in the Internet Retailer Top 500 Guide. With the acquisition, ChannelAdvisor projects it will manage $2.5 billion annually in sales for its online retailer clients.

ChannelAdvisor provides technology and services that enable online retailers to sell through online marketplaces such as eBay and Amazon.com, comparison shopping sites and search engines. Wingo says he is on the lookout for additional acquisitions that would enable ChannelAdvisor to provide such conversion-boosting technologies as rich media, analytics and site search. “We’re hearing from retailers they’re tired of dealing with 20 or 30 vendors at a time,” he says. “We would like to expand into other areas where retailers are spending money.”

Atlanta-based Marketworks reported managing $200 million sales in the fourth quarter of 2006, the most successful quarter in the company’s history. Originally named Auctionworks and focused on eBay, Marketworks changed its name in 2004 and broadened its focus to include online marketplaces such as Amazon, which is No. 1 in the Internet Retailer Top 500 Guide. But, Wingo says, Marketworks has “not had a ton of traction” off of eBay. ChannelAdvisor is based in Research Triangle Park, NC.

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