The acquisition is expected to improve Etsy's GMS over time due to Blackbird's improved mobile search and discovery technologies. Blackbird's search and recommendation product uses image recognition, natural language processing and ranking to optimize e-commerce purchase conversions.
"Blackbird's team has expertise in using machine learning to produce smarter, more relevant and more personalized search results, which we view as critical for Etsy given its 41 million+ product listings and emerging competition," analyst Blake Harper wrote in a note.
In addition, the analyst believes beyond search, Blackbird's technology would improve Etsy's existing machine learning tools for language translation and fraud detection.
Despite not expecting the deal to have material impact on near-term estimates, Harper said the acquisition should improve the experience for both sides of the marketplace and help Etsy beat competition.
Harper has a Hold rating and $14 target price on Etsy shares, which closed Monday's regular trading at $13.36.
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