StubHub

WHO: Jeff Fluhr (GSB 01 Social), Eric Baker (GSB01)

This is a posting to congratulate a couple of GSBers who built a great company and recently sold it to one of the big internet players. The news came out on TechCrunch that StubHub was being acquired by Ebay for $310M last week after a few earlier rumors. The TechCrunch article is a little misleading because they quote gross revenue for StubHub which I think includes the ticket prices instead of just the StubHub service revenue (my estimate on that is about $100M).

I dug out the Stanford GSB case on StubHub and found this great quote:

"Sure, you can call us Ivy League scalpers. But this is a very attractive business, and the more that teams embrace it, the more legitimate online trading becomes."
- Eric Baker, StubHub founder and President

StubHub started with a great market - sports enthusiasts - and found a niche where no other online player was willing to go - between the buyer and seller - to make a great company. StubHub was able to thrive and win business away from Ebay because they placed themselves in the transaction, taking the sellers credit card details and a terms of use clause that allowed them to use the credit card to find the buyer an equivalent ticket if the transaction failed. StubHub made money and generated healthy cash margins allowing them to build the company on a low investment. I don't know the details but I be both founders will be happy with this outcome.