EBay Acquires Hunch for Better Recommendations

EBay Inc. (NASDAQ:EBAY) announced on Monday its acquisition of social network data analysis firm, Hunch to develop the ecommerce giant’s recommendation technology.

EBay made the announcement on Monday. The acquisition will bring along the founders of Hunch, Tom Pinckeney, Chris Dixon and Matt Gattis to EBay. Dixon, Gattis and Pinckneu founded the social network data analysis firm in 2009 in New York. They will continue to stay in New York.

The statement released by EBay did not disclose the price of the acquisition and other terms of the agreement. Hunch functions by analyzing data from social networks such as Twitter, Facebook and others via questionnaires to make recommendations. EBay is counting on Hunch to help it suggest products on its online marketplace for its customers based on this data.

The acquisition of Hunch is the latest purchase in the string of acquisitions made by EBay as the company is trying to revive its ecommerce business. EBay is slowly losing market to its competitors such as Amazon.com and numerous other smaller websites.

Amazon.com and other online retailers rely on an inventory that is cataloged and used to provide data and recommend similar products to the buyers. However in the case of Ebay, the products are harder to catalog since they are from third party retailers and most of the products are completely unique. Hence it makes it harder to show similar searches and to personalize the site.

Hunch was launched in 2009 to recommend users things that it predicted would be similar to what they have currently shared online and likes. The service is based on data mining, machine learning and also predictive modeling to give similar search results.  The services from Hunch will be included into EBay’s “patented prediction technology” and will be incorporated into the search of the website, along with its marketing and advertising.

Since the appointment of Mark Carges as the Chief Technology Officer in 2008, Ebay has seem major changes, such as overhauling of the website design, launch of numerous mobile applications and also pushing into local commerce. The company has also added numerous recruits from Microsoft and Facebook, in the hopes of studying how shoppers interact with the website of eBay and what makes people buy products. Since the last year Ebay has also begun testing of a new search took known as Discover that brings up unexpected results via a complicated algorithm. Hunch will add on to this by pulling up products based on the likes and dislikes of the users.

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Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.