eBay Has a Hunch About Personalized Shopping

eBay purchases Hunch, one of a number of social search startups seeking an exit after failing to gain a lot of traction in the mainstream search market. Hunch, Aardvark, Kosmix and Wowd all played there.

eBay (NASDAQ:EBAY) has acquired Hunch, the social recommendation engine that failed to break free into the mainstream after it launched in 2009.

The online auction giant did not reveal financial terms in its purchase of Hunch, though Michael Arrington, who broke the news Nov. 21, claimed the startup fetched around $80 million.

Hunch delivers customized recommendations to users based on their preferences. The service uses signals from social networks and other facets of the Web to ascertain users' affinity for brands, products, services, people and Websites.

The company was part of a burgeoning bumper crop of social search engines that included Aardvark, which Google acquired and shuttered; Kosmix, which Wal-Mart acquired last April; and Wowd, which was sold and broken up. Social search utilities, it seems, are destined to be key ingredients within larger commerce engines.

eBay will turn Hunch's taste graph toward consumers for product recommendations on the auction site, which seeks to expand its shopping experience for consumers from traditional single item recommendations to suggest new products to browse and purchase.

eBay CTO Mark Carges said eBay craved Hunch's expertise in machine learning, data mining and predictive modeling, which will also be leveraged for search, advertising and marketing ventures to "better surface product and search results based on customers' tastes."

"We are engaging consumers in innovative ways and attracting top technologists to shape the future of commerce," Carges said in a statement. "We expect Hunch's technologies to benefit eBay shoppers as they browse and buy, and to bring sellers on eBay new ways to connect the right products with the right customers."

What eBay won't say is that it picked up Hunch to better compete with Amazon (NASDAQ:AMZN), whose recommendation engine and search capabilities have helped make Amazon the top e-commerce company in the world.

Hunch will be a component of eBay's X.commerce platform for third-party Websites to use as their e-commerce platform. Social search utilities, it seems, are destined to be key ingredients within larger commerce engines.

Hunch co-founder Chris Dixon said on the Hunch blog that he and his team will remain in New York City, working on predictive merchandizing, interpreting unstructured data and creating merchant insights at eBay:

"We were struck by the incredible opportunity to put Hunch's Taste Graph technology to work for one of the undisputed global leaders in e-commerce," Dixon wrote."We were equally impressed with the caliber of the people we met at eBay. They share not only our passions for creativity, innovation, and technology, but also our commitments to privacy, user respect and data transparency."

Hunch.com will continue to operate as a stand-alone site, Dixon promised.

What makes eBay's purchase of Hunch particularly interesting is that it's been down this road of acquiring a social search and discovery engine. The company acquired StumbleUpon in 2007 but ultimately sold off the company when then eBay CEO Meg Whitman couldn't figure out what to do with it.