Drugstore.com (DSCM), the number 1 online Health and Beauty site, would make a perfect fit for eBay (EBAY). With a current market cap of $258 million, this site can be purchased for $500 million, a small amount to pay for a company that had positive Net Income for the first time last quarter.
Although a loss is forecast for the first quarter of 2008, Drugstore expects anywhere from a loss of $1 million to a profit of $3 million. If eBay were to acquire Drugstore, they would easily achieve their goal of $3 million with plenty to spare. eBay can provide their sellers with reduced prescription plans, contact lenses, vitamins, etc. It is a win-win situation for both parties as Drugstore will receive plenty of online muscle and eBay will become the premier destination online for health and beuty supplies.
I don't understand why eBay spends more than $500 million alone in ad spending with Google (GOOG). For all thoughts and purposes this money is wasted. When someone wants to go to eBay all they have to do is type in www.ebay.com. How difficult can this be? I have never gone to eBay through Google and neither have any of my other friends. eBay already has a foothold in classified listings, shopping, real estate, VOIP etc. Health and Beauty can and should be the next frontier. Are you listening, eBay?
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