Even More Love for StumbleUpon

It was interesting to see a nice feature story in today’s New York Times about StumbleUpon – the Web discovery company that got its start in Calgary before heading down to Silicon Valley after raising some money from a group of high-profiles angels.

StumbleUpon’s meteoric rise from start-up couldn’t raise money in Canada peaked when it was acquired by eBay earlier this year for $75-million. In the wake of eBay’s decision to write down its investment in Skype, you have to wonder if StumbleUpon will share the same fate given it’s difficult to find a strategic fit with eBay.

The NYT suggests that down the road, eBay “plans to let users stumble through eBay’s vast database of items up for auction”. But the reality is consumers don’t stumble around eBay looking for deals. Instead, consumers know what they want on eBay. And this behavior isn’t going to change just because eBay has StumbleUpon in the fold.

At the end of the day, eBay’s decision to buy StumbleUpon may be based on the same rationale it bought Skype: to keep it out of the hands of Google. While eBay-StumbleUpon makes little strategic sense, Google-StumbleUpon makes a lot of sense. If Google had acquired StumbleUpon, there would have been three options underneath the search box: Google Search, I’m Feeling Lucky and StumbleUpon.

Don’t be surprised if StumbleUpon follows the same path as Skype within the eBay empire. Over the years, eBay has made some savvy acquisitions (PayPal, Shopping.com, 25% of Craigslist and StubHub) but it’s also stumbled strategically by making some strange non-core moves such as StumbleUpon, Skype and Meetup.com.