eBay splashes out £214m for Californian-based Rent.com

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The Independent Online

eBay, the world's largest online auction, snapped up Rent.com yesterday for $415m (£214m) in cash and shares, in an effort to expand further into the world of internet classified advertising.

eBay, the world's largest online auction, snapped up Rent.com yesterday for $415m (£214m) in cash and shares, in an effort to expand further into the world of internet classified advertising.

Rent.com, which collects a fee from landlords when apartments are filled, is privately owned and based in Santa Monica, California. It was launched in October 2001 by Allan Hunter and Scott Ingraham, who had previously run one of America's largest real estate investment trusts. Mr Ingraham is the chief executive of Rent.com.

Rent.com is themost visited apartment-listing website in the US, according to the research company comScore Media Metrix. Rent.com expects total revenues in 2004 to exceed $40m. It claims to be the only transaction-based internet listing website advertising apartments. Most other sites require users to pay a fee to register.

The deal marks the latest dot.com deal in recent weeks, coming after Cendant, the world's largest travel group, bought the internet travel agent ebookers this month and this week acquired Gullivers Travel Associates, which has a large online business.

Meg Whitman, the chief executive of eBay, said in October the company's top priority was global expansion, adding that it had also been actively buying up businesses this year, especially in the $30bn classified listings market.

EBay has recently acquired businesses in the Netherlands and Germany, and also took a 25 per cent stake in America's hugely popular internet bulletin board, Craigslist, which is based in San Francisco.

EBay will pay about $385m in stock and $30m in cash for Rent.com. The transaction, which is expected to close in the first quarter of next year, will likely decrease the company's 2005 earnings, Ms Whitman said.

Bill Cobb, the president of eBay North America, said: "Rent.com has been extremely successful in the apartment rental space online and is a great match for eBay."

The company will continue to be run as a separate business, eBay said.

"The Rent.com business model is an excellent fit with eBay. We are especially pleased that our customers will have the opportunity to benefit from the power of eBay and its community of users," Mr Ingraham said.

EBay had net income of $572.9m in the first three quarters of the year, up from the $441.8m the company earned in all of 2003. Sales in the first three quarters of the year rose 54 per cent from a year ago.

The business was founded in 1995 and has been led by Ms Whitman since 1998. She has also worked for Walt Disney, Hasbro and Procter & Gamble.

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