14 DAY TRIAL // Following posts on both official blogs, eBay announced an agreement to acquire Magento Inc., the company behind the leading open-source e-commerce platform by the same name.
eBay currently holds 49% of Magento Inc., following a previous $22.5 million investment.
At the end of Q3, when the transaction is expected to close, this minority stake will become a full 100%, making eBay the sole owner of the world's most popular and the most used open-source platform.
As for future plans, eBay plans to tightly integrate all Magento Inc. products with its upcoming X.Commerce platform.
What is X.Commerce? According to eBay is a new global, open commerce platform that leverages the worldwide developer community. And community members is what eBay (thorugh PayPal mainly) and Magento have plenty of.
But there is more to Magento than meets the eye. You have to look beyond just the ecommerce platforms Magento Community Edition and Magento Enterprise Edition to see why this is actually an important deal to eBay.
Magento Inc. also provides Magento Go, a SaaS (software-as-a-service) solution used by a plethora of merchants around the world and Magento Mobile Edition, a mobile ecommerce platform.
If initial X.Commerce announcements were pretty vague, ideological and abstract, the picture that is currently being painted reveals a mammoth in the making.
X.Commerce will be integrating technologies from companies like eBay, PayPal, Magento and GSI Commerce, an e-commerce and marketing services company eBay payed $2.4 billion at the end of March 2011.
This new platform, the opportunities and technologies brought to it by the acquired companies will allow eBay to become a strategic partner for any web, mobile or local e-commerce transaction.
As for Magento's Community Edition platform, no official statement has been made, but in the FAQ provided in the eBay announcement, no immediate changes are planned.
Besides the classic “press release”, both CEOs posted videos on YouTube (embedded below) detailing some of the details of the transaction and also the direction Magento and eBay will be heading together.
Here's Joe Donahoe, eBay's CEO with his video announcement:
And here's Roy Rubin, Magento Inc.'s CEO and Yoav Kutner, the company's CTO with their joint video announcement: