eBay today announced that it has agreed to acquire Magento, the Los Angeles-based company with more than 290 employees, which creates Magento, the open source ecommerce platform. The deal follows eBay's acquisition of a minority stake in the company in March 2010; eBay was Magento's first outside investor.

Upon closing of the transaction, eBay will own 100 percent of the outstanding shares of Magento, which will continue to operate out of Los Angeles. Unfortunately, since terms of the deal were not disclosed, it is not clear how much eBay will shell out for Magento. The transaction is subject to customary closing conditions, including regulatory approvals, and is expected to close in Q3 2011.

The Magento platform serves tens of thousands of merchants worldwide. It also has a global community of solution partners and third-party developers. The open source enterprise-class commerce solution offers merchants control over the user experience, catalog, content, and functionality of their online store. Magento Go, the company's hosted software-as-a-service solution, provides small and growing merchants with online tools - from payments to inventory management.

X.Commerce, eBay's newly created integrated open commerce platform group, is focused on leveraging the company's assets and partner technologies to build a strong, robust developer community as a resource for merchants and retailers of all sizes. Magento is expected to be folded into X.Commerce, which is targeting small retailers that might otherwise be working with Amazon. For those wondering, yes, this is really just a further attempt from eBay to compete with Amazon.

"Technology-driven innovation is blurring the lines between online and offline commerce, changing the way consumers shop, and enabling retailers of all sizes to benefit from the latest innovations from the developer community," John Donahoe, President and Chief Executive Officer of eBay, said in a statement. "The feedback we've heard from external developers has been clear --- they don't just want payments or an ecommerce site; they want access to a full set of commerce capabilities to build complete shopping experiences for merchants. We believe the acquisition of Magento and creation of our X.Commerce group will enable us to meet developers' needs and drive global commerce innovation for retailers and consumers."

For Magento's side of the story, check out this video: