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eBay sells StumbleUpon back to founders

Investors re-acquire service after two years

The founders of web recommendation site StumbleUpon have bought it back from eBay, making the company independent again after nearly two years.

StumbleUpon, founded in 2001, is designed to send its users to websites based on recommendations by other users. The recommendations are available on the web and through a free toolbar. eBay acquired the company in 2007 for $75m. However, like Skype, StumbleUpon hasn't been significantly integrated into eBay's services.

Cofounders Garrett Camp and Geoff Smith have acquired the company along with Sherpalo Ventures, Accel Partners and August Capital. The price was not disclosed.

Top executives at eBay, including then-president and CEO Meg Whitman, were excited about what StumbleUpon was doing, said Camp, who will now be CEO of StumbleUpon.

"It was a pretty lucrative offer, because nothing really changed," Camp said. The startup remained at its offices in downtown San Francisco, where it still operates, and got a valuable infusion of capital. But ultimately, eBay couldn't find a way to integrate StumbleUpon into the larger business, he said.

"As eBay expands its leadership in online payments and e-commerce, it has become apparent that there are few long-term, strategic synergies between StumbleUpon and the eBay portfolio," eBay said on its official blog.

Going back to independence will give StumbleUpon more flexibility in small ways, such as hiring, Camp said. The company plans to make its service more accessible and increase the quality of its recommendations. There are plans for several new products and features to be released in the coming months, the company said. Its workforce of about 30 will remain the same, Camp said.

The new ownership puts StumbleUpon in good company. Sherpalo Ventures founder Ram Shriram is on Google's board, and Accel Partners was one of the original funders of Facebook.

While it was owned by eBay, StumbleUpon grew from 2.3 million to more than 7.4 million members, and from about 150 million recommendations per month to 425 million. In the same period, the number of advertisers grew from a few hundred to about 20,000, Camp said.


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