eBay buys three companies for $1.35 billion, lays off 1,000

eBay is a buyer this morning. The company announced that it will buy Bill Me Later for $945 million. As if that weren’t enough, eBay will also acquire both Danish classifieds specialist Den Bla Avis and Danish vehicle site BilBasen for approximately $390 million in cash.

But the San Jose, Calif.-based eBay also laid off 1,000 people, or 10 percent of its employees, and said that revenues in the third quarter were lower than expected.

eBay’s cutbacks had been expected. The layoffs will result in a pretax restructuring charge of $70 million to $80 million in the fourth quarter. The company is also laying off several hundred temporary workers, and its stock is off 60 percent from its peak a few years ago.

eBay, due to report earnings on  Oct. 15, said in July that it expected net revenues of between $2.1 billion and $2.15 billion for the third quarter. Its non-GAAP earnings per diluted share are expected to be between 39 cents and 41 cents per share. This morning eBay stock is down 8 percent to $17.40 a share. It is trading far below its 52-week high of $40.73 a share.

Like PayPal, which eBay already owns, Bill Me Later is an alternative payment e-commerce firm. It lets consumers pay for goods at more than 1,000 online sites without using a credit card. You supply your name, birth date and Social Security number (last four digits). Then it bills you later.

Bill Me Later’s largest shareholder is Azure Capital Partners. This deal adds to other big exits for Azure, which include VMware (bought for $635 million by EMC in 2003, WorldWide Packets — bought for $300 million earlier this year — and TopTier, bought by SAP for $400 million in 2001).

Bill Me Later raised about $200 million in venture funding and it said that it would hit $150 million in revenues next year. That means that eBay paid about 6.5 times revenues, a pretty good valuation in a turbulent market.

Michael Kwatinetz, general partner at Azure Capital, said that Bill Me Later was one of the first companies to use the web as a platform. That means that it uses a variety of web services in order to verify a buyer’s identity and to run a credit check on that person within the course of three seconds. Normally, credit card companies may take a week to do such verification for first-time buyers.

Bill Me Later has a system where it bills most of its customers electronically and most of those customers pay electronically. That keeps its costs low.