PayPal spends US$169 million to protect customers

Online auction house, eBay said its subsidiary PayPal has agreed to acquire Fraud Sciences, a privately-held Israeli company with experience in online risk tools for an aggregate transaction value of approximately US$169 million in cash.

Fraud Sciences' risk tools and analytics are expected to enhance eBay and PayPal's proprietary fraud management systems.

The acquisition fits into eBay's recently announced plans to significantly improve trust and safety across its sites in 2008, said PayPal president, Scott Thompson.

"Integrating Fraud Sciences' risk tools with PayPal's sophisticated fraud management system should allow us to be even more effective in protecting eBay and PayPal's hundreds of millions of customers around the world," he said.

Key personnel from Fraud Sciences, including Yossi Barak, Fraud Sciences' COO, and founders Shvat Shaked and Saar Wilf, will join the company's technology and fraud management teams. Gadi Maier, Fraud Sciences' President and CEO, will provide strategic and operational support to the company during the integration period.

This acquisition, which is subject to the satisfaction of certain conditions, is expected to close within the next 30 days. eBay does not expect this acquisition to have a material impact on its 2008 financial guidance issued in conjunction with its fourth quarter earnings release on January 23, 2008.