April 21, 2011, 10:23 AM

eBay to buy Where

EBay Inc. plans to build out its local and mobile marketing strategy with the acquisition.

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E-marketplace powerhouse eBay Inc. has reached an agreement to buy Where, a provider of advertising services, search and mobile apps that support shopping in nearby stores. Terms of the deal were not disclosed.

Through its mobile app, Where lets consumers search for products and services from local businesses, provides recommendations based on the consumer’s shopping preferences, and serves ads from local retailers.

“By delivering personalized, hyper-local advertising, offers and deals to shoppers on their mobile phones, we see a huge opportunity for retailers and brands to reach more buyers, and for consumers to get more choice and value when they shop,” eBay says.

Where claims to have 4 million registered users and more than 120,000 participating retailers. It says it handles more than 2 billion ad impressions monthly, reaching more than 50 million mobile users. Its mobile app comes in versions for the iPhone, BlackBerry, Android, Windows Phone 7 and Palm WebOS mobile devices.

EBay expects to make its PayPal online and mobile payment service available through the Where mobile app.

“As a first step, we plan to integrate PayPal into the Where mobile app to make it even easier for PayPal customers to take advantage of the local deals,” Amanda Pires, senior director of global communications, brand and experimental marketing at PayPal, says in an eBay blog post.

The acquisition makes a lot of sense in light of the changing realities of retail caused by mobile commerce, says Nikki Baird, managing partner at Retail Systems Research.

"Store-based retailers' biggest differentiator to online-only retailers has always been their stores, but mobile is changing all that, and fast," she says. "If an online retailer can understand the context in which a consumer is using its mobile app or site, then it can be even more sophisticated in what and how it communicates to shoppers, and have a strong opportunity of winning away a consumer's business without the store ever knowing. So I'm not surprised at eBay's move. It's a powerful combination of capabilities that could easily have store-based retailers very worried."

The acquisition, which is expected to close in the second quarter, follows eBay’s purchase late last year of Milo, a search engine for finding products available in local stores, and of RedLaser, developer of a bar code scanning app shoppers can use to comparison shop in stores.

In making such moves, eBay is putting itself into a position to compete more against Groupon , Facebook, LivingSocial and others in the growing local shopping and advertising market.

Where, in an indication of its growth plans, lists more than a dozen job openings on its web site, including positions for web developers and sales managers.

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