The behind the scenes story of the eBay/Shopping.com deal. This is taken directly from the proxy statement dated June 21st. (See all Shopping.com SEC Filings):

Background to the Merger

Following Shopping.com’s initial public offering in October 2004, Shopping.com focused on developing its online comparison shopping business on a stand-alone basis. During the spring of 2005, Shopping.com’s board of directors and management became increasingly concerned with the competitive threat posed by larger companies such as Google, Inc. and Yahoo! and the possible addition of comparison shopping capabilities by online retailers such as eBay and Amazon.com, and the effect of increasing consolidation on smaller, more focused comparison shopping companies.

On April 26, 2005, Rajiv Dutta, Senior Vice President and Chief Financial Officer of eBay, spoke with William Gurley, a director of Shopping.com, and suggested a meeting to discuss a potential strategic transaction between eBay and Shopping.com. On April 28, 2005, William Barmeier, Vice President, Corporate Development of eBay, contacted Ms. Norrington, and on April 29 and May 2, 2005, Ms. Norrington and Mr. Barmeier held telephonic discussions during which Mr. Barmeier also suggested a potential transaction. Ms. Norrington reported these overtures to Shopping.com’s management and, on May 4, 2005, to our board of directors, and our board of directors authorized our management to proceed with a meeting with eBay. On May 5, 2005, Ms. Norrington, Greg Santora, our chief financial officer, and Ignacio J. Fanlo, our chief technology officer, met with Mr. Dutta, Mr. Barmeier and other eBay representatives to discuss the potential benefits of a strategic transaction and to provide a general overview of Shopping.com’s business.

On several occasions between May 5 and May 11, 2005, Ms. Norrington and Mr. Gurley had discussions with Mr. Dutta and Mr. Barmeier regarding the possibility and potential benefits of a business combination. On May 11, 2005, eBay and Shopping.com entered into a mutual non-disclosure agreement, providing for confidential discussions and exchanges of information. On May 11, 2005, Ms. Norrington, Mr. Fanlo and Amir Ashkenazi, our chief technology officer, held a telephonic meeting with eBay representatives to discuss our technology capabilities, and on May 15, 2005 Mr. Dutta and Mr. Gurley discussed the potential benefits of a transaction. On several occasions between May 16 and May 18, 2005, Mr. Barmeier contacted Ms. Norrington to express eBay’s interest in proceeding with due diligence in order to determine the advisability of a business combination and to enable eBay to propose a valuation at which it would be interested in acquiring Shopping.com.

Members of Shopping.com’s management, including Ms. Norrington and Daniel Ciporin, our Chief Executive Officer at the time, then met with representatives of Credit Suisse First Boston on May 17 and May 18, 2005, to discuss a possible transaction between Shopping.com and eBay, current industry dynamics and strategic alternatives available to Shopping.com, including a possible business combination involving eBay as well as our prospects as an independent company.

On May 18, 2005, our board of directors held a meeting, together with management, representatives of Fenwick & West LLP (our outside U.S. legal counsel) and representatives of Credit Suisse First Boston to discuss a potential transaction with eBay. Ms. Norrington and Mr. Ciporin described the discussions that had taken place between the companies, and our board of directors, management and representatives of Credit Suisse First Boston discussed the competitive landscape and current trends of consolidation in our industry. Our board of directors discussed the potential benefits and risks associated with a possible business combination transaction with eBay or another industry participant, as well as the potential benefits and risks of remaining independent and the risks of potential structural changes in the industry not involving Shopping.com that might be detrimental to us. Our board of directors also held a discussion, together with its financial and legal advisors, with respect to the process that it should follow to maximize the value that would be received by our shareholders in a transaction, and considered potential benefits and risks of various alternatives in this regard. As part of this discussion, our board of directors considered the risk of engaging in a process that did not result in a transaction for Shopping.com, and the risks and potential benefits of contacting other companies to determine if they were interested in pursuing a business combination with us. Our board of directors also discussed Shopping.com’s historical and current business operations and financial performance, our long-term plans as an independent company, and the potential effect of various risks on those plans. Representatives of Fenwick & West then led a discussion of the fiduciary duties of the directors in considering a potential transaction. Representatives of Credit Suisse First Boston then left the meeting, and our board of directors considered potential financial advisers with respect to the transaction, and determined to retain Credit Suisse First Boston based on a number of factors, including its knowledge of the industry and familiarity with us. Credit Suisse First Boston had been a joint lead managing underwriter in Shopping.com’s initial public offering. Our board of directors then authorized management to continue discussions and commence due diligence in order to move towards a more definitive proposal from eBay for a business combination with Shopping.com. The independent members of our board of directors then met in executive session without management present, and further discussed the desirability of a business combination at this time and our prospects as an independent company.

On May 18, 2005, we amended our non-disclosure agreement with eBay to add restrictions on eBay’s solicitation of our employees, and to add a “stand-still” provision that, subject to certain exceptions, limited eBay’s ability to acquire our ordinary shares or participate in certain other transactions without our consent, and Mr. Dutta and Mr. Gurley had a discussion regarding the potential transaction, and our valuation. On May 19, 2005, eBay began a more detailed review of Shopping.com from an operational, technical, financial, accounting, tax, legal and human resources perspective, including participating in meetings and discussions with members of our management on May 19 and 20, 2005.

On May 22, 2005, Goldman Sachs & Co., eBay’s financial advisor, contacted Credit Suisse First Boston, and Mr. Dutta contacted Mr. Gurley, with a proposal by eBay to acquire us at a price of US$20.00 per share, in cash. This proposal included a requirement that we agree not to solicit offers from other companies, or engage in any negotiations with any other company, with respect to an alternative acquisition transaction until June 12, 2005. In addition, on May 22, 2005, Mr. Dutta discussed eBay’s proposal with Ms. Norrington and Mr. Gurley, and Ms. Norrington discussed our business and the contemplated transaction with Margaret Whitman, President and Chief Executive Officer of eBay.

On May 23, 2005, our board of directors held a special meeting to discuss eBay’s proposal. Representatives of Fenwick & West reminded our board of directors of its duties in the context of a potential sale of the company. Our board of directors and Credit Suisse First Boston discussed eBay’s valuation of Shopping.com, including the premium it represented with respect to our stock price and aggregate value (fully diluted equity value minus net cash), and the trading history of our stock price since our initial public offering. Our board of directors and Credit Suisse First Boston also discussed whether any other company would be interested in offering a higher price. Following discussion, our board of directors authorized Credit Suisse First Boston to advise Goldman Sachs that we would be interested in proceeding with a transaction at a valuation of US$23.00 per share, and would be willing to agree to refrain from soliciting competing proposals until June 6 rather than June 12, provided that eBay would also agree not to engage in discussions or negotiations with certain of our competitors in the online comparison shopping market through June 6, 2005.

On May 23, 2005, Credit Suisse First Boston communicated this proposal to Goldman Sachs, and representatives of Credit Suisse First Boston and representatives of Goldman Sachs further discussed the proposed valuation and the terms of a possible business combination. In addition, Ms. Norrington had discussions with Mr. Dutta regarding the proposed valuation.

On May 24, 2005, Goldman Sachs advised Credit Suisse First Boston and Mr. Dutta advised Ms. Norrington that eBay would agree to a valuation of US$21.00 per ordinary share as a “best and final offer,” and would agree to revise the restriction on solicitation of a competing transaction so that it was mutual as described above, and would expire on June 6, 2005. Our board of directors, representatives of Credit Suisse First Boston and representatives of Fenwick & West then met on May 24, 2005 to discuss this proposal. Our board of directors discussed the proposed valuation, as well as the structure of the proposal, and the expectations of our board of directors as to certain terms that it would expect would be included in the definitive agreements. Our board of directors also discussed our prospects as an independent company, and its views as to whether another party was likely to make a higher offer than eBay’s offer. Our board of directors then discussed with its financial and legal advisors various aspects of the proposed transaction with eBay. Based upon this discussion, our board of directors authorized us to enter into an exclusivity agreement with eBay, which we executed that day.

eBay’s outside legal advisor, Cooley Godward LLP, distributed a draft of the merger agreement on May 25, 2005, and a draft of the proposed shareholder undertaking to be executed by some of our shareholders in connection with the execution of the merger agreement on May 27, 2005. During the course of the ensuing week, we and eBay, along with our and their respective legal advisors, negotiated the terms of the merger agreement and the shareholder undertakings. These negotiations continued, both in person and by telephone, involving at various times management of both companies, through the morning of June 1, 2005. During this process, we negotiated, among other terms we considered important, the right for our board of directors to terminate the merger agreement in certain cases after receipt of a “superior offer” as defined in the merger agreement, a reduction in the break up fee payable in that and other events, and a limitation on the shareholders who would be required to sign a shareholder undertaking and grant a proxy to vote in favor of the merger agreement, the merger and the transactions contemplated by the merger agreement.

Also, between May 25 and June 1, eBay continued its operational, technical, financial, accounting, tax, legal and human resources due diligence, and as part of eBay’s due diligence process, representatives of eBay conducted a site visit of Shopping.com’s facility in Israel.

On May 27, 2005, our board of directors held a special meeting with our management, representatives of Credit Suisse First Boston and representatives of Fenwick & West to review the issues identified in the draft merger agreement and to discuss the approach to resolution of those issues. In addition, on May 27, Ms. Norrington met with Ms. Whitman to discuss the proposed transaction and plans for the integration of the Shopping.com business into eBay.

On May 30, 2005, our board of directors held another special meeting, with our management, representatives of Credit Suisse First Boston, Fenwick & West and Meitar Liquornik Geva & Leshem Brandwein, our Israeli counsel. At this meeting, Ms. Norrington and representatives of Fenwick & West updated our board of directors on developments since its May 27, 2005 meeting, including discussions regarding the status of remaining open issues in the negotiations with eBay. Representatives of Fenwick & West outlined the key terms of the merger agreement and the proposed shareholder undertakings, and discussed the legal duties and responsibilities of our board of directors. Our board of directors then discussed the remaining open significant issues in the merger agreement. Ms. Norrington and a representative of Fenwick & West also reviewed with our board of directors the terms of proposed employment agreements with certain of our executive officers which would become effective upon the closing of the proposed merger. Representatives of Credit Suisse First Boston then reviewed with our board of directors certain financial analyses with respect to the proposed merger. The compensation committee of our board of directors then met to discuss the proposed bonus to Ms. Norrington. See “Proposal No. 2, Background and Reasons for the Bonus Payment” for a more detailed discussion of the compensation committee’s consideration of the proposed bonus to Ms. Norrington.

On June 1, 2005, our audit committee (as required by Israeli law) and our board of directors held a joint special meeting to consider whether to approve the merger agreement. At this meeting, representatives of Fenwick & West discussed the resolution of the issues that had been outstanding in the merger agreement and representatives of Credit Suisse First Boston provided an update of certain of the financial analyses reviewed by Shopping.com’s board of directors and Credit Suisse First Boston on May 30, 2005. Credit Suisse First Boston then delivered its oral opinion to our board of directors, later confirmed by a written opinion dated June 1, 2005, that, as of that date and based upon and subject to the considerations set forth in its opinion, the US$21.00 per share in cash to be received by the holders of our ordinary shares pursuant to the merger agreement was fair, from a financial point of view, to the holders of our ordinary shares. See “Proposal No. 1, The Merger—Opinion of Shopping.com’s Financial Advisor.” Ms. Norrington and a representative of Fenwick & West reviewed with the board the final terms of the proposed employment agreements between certain officers and other members of management that would become effective upon closing of the proposed merger. After discussion of and deliberation on the proposed transaction, and after considering the interests of certain of our officers and directors in the merger, as described in “Proposal No. 1, Interests of Shopping.com’s Executive Officers and Directors in the Merger,” our board of directors unanimously (1) determined that the merger agreement, the merger and the other transactions contemplated by the merger agreement are fair to, and in the best interests of, Shopping.com and its shareholders, (2) approved the merger agreement, the merger and the other transactions contemplated by the merger agreement and authorized the execution and delivery of the merger agreement, and (3) resolved to recommend that our shareholders approve the merger agreement, the merger and the other transactions contemplated by the merger agreement.

On June 1, 2005, following the approvals of the merger agreement, the merger and the other transactions contemplated by the merger agreement by Shopping.com’s and eBay’s respective boards of directors, the parties executed the merger agreement and certain members of our board and management (and shareholders affiliated with such members of our board and management) executed shareholder undertakings in favor of eBay and granted proxies to outside counsel to eBay to vote in favor of the merger agreement, the merger and the other transactions contemplated by the merger agreement. On that date, we and eBay issued a joint press release announcing the execution of the merger agreement.