eBay Buys AppTek's Machine Translation Tools - Analyst Blog

eBay Inc. ( EBAY ) recently acquired machine translation technology from AppTek as a part of its efforts to pursue its cross-border strategy. eBay will absorb talent and acquire intellectual property (IP) from AppTek. However, AppTek's voice technology segment will continue to operate as a separate division, probably under the same brand.

The detailed terms of the deal were not disclosed. Reportedly, eight employees including a co-founder from AppTek's 10-member team will join eBay. eBay will carry on serving AppTek's existing consumers, primarily governmental agencies, by licensing its technology.

AppTek, founded in 1990 by Mohammad Shihadah and Mudar Yaghi, is a Virginia-based company specializing in machine translation (MT) and automatic speech recognition ("ASR"). It has also been focusing on making hybrid machine translation software in recent years.

With the acquisition, eBay will gain access to AppTek's highly-developed hybrid machine translation software, language databases as well as coding, which will help the e-commerce company to enhance its existing internal machine translation efforts and progress with its new translation abilities more rapidly.

eBay started its own in-house machine translation technology two years ago. At present, 20% of eBay's sales are cross-border transactions and are growing more quickly than its domestic sales. However, the business is experiencing several hindrances related to erroneous and incomplete product descriptions.

Moreover, the majority of the shoppers and merchants choose to transact in their native language. AppTek's tools will enable eBay to overcome these problems. The integration of AppTek's machine translation tools will enhance the company's global translation efforts and help its customers and vendors enjoy an even better native language experience.

We believe the latest move will enable the company to broaden its customer base, expand in new markets worldwide and boost its top- and bottom-line performances.

Furthermore, AppTek has an office in Germany, an important region of growth for the e-commerce company. This is expected to enhance eBay's European cross-border sales. eBay will continue to operate the office to strengthen its future activities in the region.

International expansion has been a priority for eBay and therefore it has been increasing its foothold in Brazil, Russia, India and China (BRIC nations). The acquisition news follows the recent launch of PassPort by its digital payment arm PayPal to increase global sales.

eBay currently holds a Zacks Rank #3 (Hold). Other better-ranked stocks in the technology sector include LivePerson Inc. ( LPSN ) and Rovi Corporation ( ROVI ), both carrying a Zacks Rank #1 (Strong Buy) and Facebook, Inc. ( FB ), holding a Zacks Rank #2 (Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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