EBay on Monday announced it will buy a 19.5 percent stake in MercadoLibre SA, a company that runs online auction sites serving Latin America, Spain and U.S. Hispanics.
Acquiring this stake in MercadoLibre is "an important step in our global strategy" that is expected to expand eBay's reach throughout Latin America, said eBay President and Chief Executive Officer Meg Whitman in a statement.
As part of the deal, MercadoLibre has agreed to buy a Brazilian auction site called iBazar Com Ltda., which was acquired by eBay in May. iBazar Com has more than 450,000 registered users in Brazil. EBay will retain ownership of iBazar Com's parent company iBazar SA based in Paris.
It wasn't clear from the brief joint statement put out by the companies how they plan to collaborate. The statement doesn't say, for example, if or how the companies will carry items listed by the other. No financial details were provided.
MercadoLibre operates auction sites in 10 countries: Argentina, Brazil, Chile, Colombia, Ecuador, México, Uruguay, Spain, the U.S. and Venezuela. Its main site is at http://www.mercadolibre.com, and from there users can jump to the country-specific sites.
MercadoLibre was founded in July 1999 and quickly positioned itself as one of Latin America's best-known online auction sites, along with rival DeRemate.com. MercadoLibre raised more than US$54 million in funding during the heyday of Latin America's Internet market, when enthusiastic venture capitalists were throwing money at a variety of Internet startups in the region. Most of these startups went belly up, while those that remain are struggling to survive.