StumbleUpon, the content discovery site that was acquired by eBay in 2007 for $75 million, has "returned to the ranks of an investor-backed start-up," according to a company release.
A handful of Silicon Valley investors, including Ram Shriram of Sherpalo Ventures, Accel Partners and August Capital, put up the cash to free StumbleUpon from the internet giant.
Co-founder Garrett Camp - who is also using his own funds to buy back the business - stated there were "few long-term synergies" between StumbleUpon and eBay.
The company's return to start-up status will allow it to innovate and "focus on becoming the web's largest recommendation service," he added.
StumbleUpon began life as an add-on for the Firefox browser. After downloading it, users could click on its logo and be directed to random content sites. They "told" StumbleUpon whether they liked the sites by giving them either a thumbs-up or -down. StumbleUpon used this feedback to refine individuals' recommendations.
After buying the social-bookmarking service in the height of the Web 2.0 frenzy, eBay made a few changes to the site, giving it a more web-centric look and feel, and opening it to all users - even those that did not register or download its Firefox toolbar.
It also introduced a new partner program in the fall with the Huffington Post, HowStuffWorks, Rolling Stone, and National Geographic, enabling StumbleUpon users to "stumble" through content on those sites without having to register for access.
A month before those changes were announced, however, TechCrunch reported eBay was thinking about cutting its losses and selling off the company, and had even hired Deutsche Bank to find a buyer.
eBay's unlikely acquisitions have compelled critics to label it "a holding company for start-ups it has no business owning," with Skype being the most obvious example. And though there was speculation that eBay might sell Skype back to its original investors - as it has done with StumbleUpon - the two sides are "far apart" and a deal with a private-equity firm is unlikely, reports Silicon Alley Insider.
