Australia’s second largest online auction site, OZtion, has been sold for the second time in just over two years, with online classifieds giant Carsales.com acquiring the business for $1.1 million.
Carsales.com bought OZtion from Melbourne-based listed media company Jumbuck Entertainment, which is now concentrating on mobile entertainment products, specifically chat services.
Jumbuck purchased OZtion from founders Philip Druce and Kevin Yip in June 2008 for $2 million in cash and shares.
At the time, OZtion was riding a wave of popularity thanks to eBay announcing it would force customers to use its wholly owned payment company PayPal.
While eBay later reversed its decision, the announcement led to a flood of users turning to sites like OZtion. Within six weeks, the company’s sales jumped 50% and its member based jumped by 28,000 to 275,000.
Two years later, OZtion now has 480,000 members, but new Jumbuck chief executive David Gibbs said the business no longer fits in with Jumbuck’s mobile focus.
“While OZtion is recognised as a strong platform and brand, our corporate strategy has changed significantly in the past six months. Following a review of our business and portfolio we took a decision to divest non-core assets that do not fit within our global mobile communities.”
Carsales.com chief Greg Roebuck, who led his company to one of the most successful ASX floats of the last five years in 2009, says the acquisition will help diversify the group’s product range, and complement it’s existing classifieds site, Quicksales.com.au.
“We believe strongly in the value of OZtion’s growing community. More than 480,000 Australians already use the site. We’re pleased to be able to welcome these customers and members into the Carsales network,” Roebuck said.
However, he was quick to reassure Carsales users that the company would not be moving towards car auctions.
“This is not a move into the automotive auction space – carsales.com.au is and will continue to be, the best way to buy and sell cars. This eCommerce and general classifieds solution is intended to allow our existing and future customers to access a wider range of products and services in a range of verticals – without leaving the key websites they know and trust.”
In a statement posted on OZtion, Philip Druce said the acquisition was “an exciting step for our business and will help OZtion and our community to grow and prosper” and said there are no plans to change the way the site operates.
Druce also said that the core OZtion team has been “encouraged” to remain with the business.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
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