eBay Rides the iPhone Wave with a Deal for RedLaser


When Apple's (AAPL) first iPhone appeared back in January 2007, the device was a game changer. Now it looks like the launch of version 4.0 will further disrupt the mobile industry. Consumers are waiting in lines for hours and crashing servers to get their hands on the new whiz-bang phone.

No doubt, senior executives at companies like Research in Motion (RIMM) are shaking their fists. Already the stock price of Nokia (NOK) has been wasted and trades at a lowly $8.47 per share.

But there will also be some companies riding the wave with Apple. Just look at eBay (EBAY). Over the past couple years, the company has effectively put together an iPhone strategy, including its highly successful iPhone app. And to help it continue to coast on the iPhone phenomenon, the ecommerce company recently announced its purchase of RedLaser, the top iPhone app for scanning barcodes.

Shopping via Cell Phone

RedLaser is actually not a company. Rather, it is a product from Occipital, which is privately held. In other words, eBay is purchasing the rights to the RedLaser platform, not Occipital.

Yesterday, to see what all the fuss was about, I downloaded the barcode-scanning app and started using it. I went to the mall and used my iPhone to snap pictures of bar codes. I'm not a big shopper, but this actually made things kind of fun.

Once you scan the barcode, the app finds cheaper alternatives from the Web or from nearby brick-and-mortar stores that carry the product. As I got further involved, I found that if you scan a book, the app will even show whether the book is available at a local library.

Given its speed, accuracy and usefulness, it is clear why RedLaser has turned out to be a killer app -- with over two million downloads.

eBay's Growing Mobile Business

When it is integrated into eBay's properties, RedLaser's distribution will explode. If anything, this will become a standout feature that will create more customer engagement. Already, eBay has made the app free and the company plans to port the technology over to Google's (GOOG) Android mobile operating system.

eBay expects to generate $1.5 billion in revenues this year with its mobile business -- which compares to $600 million in 2009. This is probably a low-ball number, especially in light of the surge of the iPhone 4. And with continued innovation and some deal-making, eBay won't miss this megatrend.