December 16, 2010, 10:33 AM

eBay buys its app developer

The purchase of Critical Path Software bolsters eBay’s app-centric mobile commerce strategy.

Lead Photo

eBay Mobile (above) is the core mobile app among more than a dozen the marketplace provides consumers.

Marketplace giant eBay Inc. has very clearly shown it is serious about apps—it’s launched more than a dozen, with more on the way. It now is showing that its investment in apps is so serious that it’s bringing an entire mobile technology provider in-house.

EBay has purchased mobile app developer Critical Path Software for an undisclosed sum. Critical Path has in the past worked with eBay to build numerous apps; now the provider is quite literally part of the team.

“We’re very serious about innovating in mobile commerce,” says Mark Carges, chief technology officer of global products at eBay Marketplace. “Integrating the Critical Path Software team into eBay will be a big win for mobile shoppers around the world. We can make shopping and selling anywhere, anytime, for almost anything, even better.”

Critical Path has worked with eBay on m-commerce apps that let smartphone users connect with the online marketplace overall and niche product categories, as well as its other services such as classified ads, ticket marketplace StubHub and comparison shopping engine Shopping.com. EBay owns StubHub and Shopping.com.

“I’ve talked with eBay quite a bit and they are totally sold on mobile, they understand the impact of mobile, and they are being very imaginative and aggressive about how to exploit it,” says Mark Beccue, senior analyst, consumer mobility, at ABI Research, an emerging technologies consulting firm. “This move is them really taking a shot at having a significant competitive advantage in m-commerce. They study their users, they know which devices the users are coming from. To bring an app developer in-house means now they can apply the developer’s knowledge to things like their RedLaser bar code scanning app and be quicker about putting new apps out, and trying new things.”

Beccue adds that as eBay growth is slowing and its PayPal unit is taking off, purchasing Critical Path Software could be a move to bolster the marketplace.

“In a larger context, overall growth is slowing while mobile commerce is growing,” he says, “so a buy like this might be what they think is a path to better growth.”

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