eBay to Expand Auto Catalogue

E-commerce service provider, eBay Inc. (EBAY - Analyst Report) has agreed to acquire WHI Solutions (WHI), a provider of software and digital catalog solutions for auto parts distributors and retailers. Terms of the deal were not disclosed.

WHI Solutions offers an e-catalog for electronic parts and service dealer data for over 39,000 North American vehicles. This acquisition will not only beef up the catalog on eBay Motors, which sells both used cars and car parts and equipment for boats, trucks and motorcycles, but it will also enhance seller experience. Listing inventory will be made easy, with automatically populating listing fields including description, image and vehicle application data through millions of stock keeping units (SKUs) in the WHI catalogue.

eBay faces increasing competition from major online retailers, such as Amazon.com (AMZN - Analyst Report), as well as many other smaller players. But eBay Motors is one area where companies like Amazon haven't made any substantial headway. Lately, shopping for cars or car parts on mobile phones has become quite popular.

The acquisition of WHI will attract more online car shoppers, thereby increasing eBay’s customer base. With the high value of autos and auto-parts along with a healthy expected growth in the U.S. auto market, the eBay motors app is expected to increase sales further.

According to eBay’s website, WHI offices will remain in New York, Los Angeles and New Jersey and its technology and client base will all be integrated into eBay Motors.

eBay is one of the largest online retailers in the world and appears well positioned to grow through strategic acquisitions. In order to maintain its strong position in the online market and fight growing competition, eBay made 4 other acquisitions in 2011. GSI Commerce was acquired for $2.4 billion, Magento for an undisclosed sum, WHERE Inc. for $135 million and Zong for $240 million. We believe these acquisitions will help eBay to expand its business, increase sales and provide a competitive edge over Amazon.

Currently, eBay shares carry a Zacks #3 Rank, indicating a short-term Hold recommendation.

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