StumbleUpon is once a profitable website which adopted the same principle used by social networking sites, allowing users to explore various Web pages and rate these according to their own opinion.
But with a different turn of event, what was once a lucrative business has gone into a potential financial liability.
Last year, when the site has been growing and expanding to a tremendous proportion, e-Bay and Google had fought against each other to own this once lucrative business, with the former winning the bidding war.
Unfortunately, just after more than a year of taking ownership of StumbleUpon, the number of visitors has decline tremendously despite its growing number of users, forcing e-Bay to take an immediate action before the site’s value depreciates even more. Considering that advertising revenue is also fast declining, the company has to decide whether to revitalize this business again, or to sell it to someone who can revive the heyday of this web site.
As soon as the company felt the sharp decline of visitors—from 4.4 million in 2007 to 1.3 million this year—e-Bay hired Deutsche Bank to find a buyer for StumbleUpon. Furthermore, the company’s officials are not willing to sell this asset for less than $75 million—which is the amount they had paid for when they bought this site a year ago. While selling this in a price which may sound like far-fetched and unreasonable, given the fact that the site’s situation is not on its peak of health, e-Bay seems to hold on its decision.
If ever the company will be able to sell the site in a price which is more than its initial value, whoever who will buy this should invest on a lugubrious amount of capital to revitalize again the dying situation of StumbleUpon.
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