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eBay To Buy Skype For $2.6 Billion
rfunches writes "It's not a rumour anymore. BBC News online reports that eBay will pay 'half the amount in cash and the other half in stocks to create an unparalleled e-commerce and communications engine'." The $2.6 billion purchase would give eBay access to the VoIP market, of which Skype claims it has 2 million users online at any given time. BBC speculates that eBay will use Skype to allow sellers and bidders to communicate via voice; I have also heard that live auctions a la Sothebys might also be a possibility. Also reported at Wall Street Journal (registration), New York Times."
Skype is not built on open standards like SIP and remains isolated to its own so-called "Peer to Peer" network. It is to the Gizmo Project as AIM is to Jabber.
Furthermore, eBay has a history of poor human rights concerns and owns PayPal, probably the worst on-line payment site ever created.
I predict more consumer-hostile behavior from eBay and will continue to boycott all of its products.
I'm not Seth Finkelstein. I still speak the truth.
From the article :
.... eBay is also attracted by the idea of letting its buyers and sellers talk to each other via their computers ...
Personally, I'm not sure that I would want eBay buyers and sellers to contact me by voice. For a start, it means that to buy or sell effectively, you would need to be online a lot of the time.
Plus, once they have your Skype address, it would open up the system to SPAM voice calls pestering you to buy more things that you don't want or need.
Yet another company purchasing another completely unrelated company simply because they feel the need to dump their cash somewhere. In te end, one company always ends up dragging the other down.
BBC speculates that eBay will use Skype to allow sellers and bidders to communicate via voice;
They can do that already, for free, using any of the IM and VoIP solutions that are out there. eBay didn't have to buy Skype for that. I suspect most sellers just don't want to be bothered, otherwise they'd list an IM address and phone number.
I'm not even sure why Skype is considered so valuable; the technology is commonplace, and VoIP-to-POTS gateways are offered by many companies. And between the Telcos and Microsoft, any competitor is going to be squashed.
Paypal's Micropayments and Skype? Probably convenient for quick overseas calls to POTS lines...
... as it is does not use the accepted SIP VOIP standard, nor does it interoperate with other VOIP providers.
Get yourself a real VOIP provider that uses SIP.
For that kind of cash, eBay could have developed an in-house solution at a fraction of the price. Oh well, time to raise the Buyer's and Seller's rates on eBay, again...
I fear that Skype will go the way of ICQ when that happens...
To be honest ICQ went the way of ICQ when ICQ decided to become a big, fat bloated pig that took half a minute to boot.
And MSN (until recent versions anyway) remained quick and functional. ICQ went down because ICQ went the way of WinAmp 3. No need to blame MS on this.
Not Buzzword 2.0 compliant. Please speak english.
I think I need to buy some puts on E-Bay.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
Clearly eBay should be made to bid for it ;-)
Why was this post moderated as offtopic?
It may have been unfunny, but it was definately topical.
I think the main parallel to find in comparing the recent tech acquisition spree to that of 1999/2000 is that companies are applying the "buy now figure it out later" synergy strategy again. I think a lot of these companies are seeing a vague future for themselves as desktop application providers in Web X.0 -- but they are scrambling in a land grab on search, voip, mobile...I mean, when Google buys something as fad-ish as dodgeball.com and ebay gets into voip, to me it signals speculation and hedging on these companies' parts. They have no clue what will work and what will not -- and eBay shareholders should be upset that eBay is gambling billions on speculative technologies.
There is other software out there. Some can do some of what Skype does, other software can do other parts of what Skype does. But can it do all of it?
- Skype has little or no problems with firewalls. Most workplaces wouldn't be able to use Skype if it wasn't for this.
- It's not only PC-to-PC, which indeed is a dime a dozen. It's also PC-to-phone and even phone-to-PC. You can get your own phone number(s) in some countries, e.g. get yourself a phone number in some other country and your friends there can phone you at local rates instead of international.
- With the latest version and its forwarding feature (still only in the Windows version) it's even phone-to-phone as well.
- Skype's PC-to-phone is cheap. I can go to the other side of the world and phone my mum or anyone at home for close to nothing, with a USB stick w/Skype and an Internet cafe.
There are other applications out there that can do part of what Skype can do, but it's either
- missing some features, or
- not as good PC-to-phone country coverage, or
- more expensive PC-to-phone rates, or
- none or extremely (even more than Skype) limited availability of phone numbers (what Skype calls SkypeIn).
- a smaller user base (which is a self-strengthening point)
In other words, a lot of stuff come together in Skype. The only point against I can think of is the missing interoperability with other software because of the proprietary protocols.
this isn't the dot com bubble though we aren't going to make that mistake again. No - this is a new thing - this is the telecommunications bubble.
2.6 billion..
thats in Yen right?
seriously why dont ebay hire some people to make a SIP compliant client + service...
the only reason why skype is doing well at the moment is because SIP hasn't taken of yet...
I suspect that part of the confusion is that we think of ebay as an acution company, just like we used to think of google as a search company or Microsoft as a PC OS company.
It sounds to me like ebay is trying to transform itself into a "business solutions provider" company. Starting a small business? Sell your stuff using ebay with "buy it now". Want to accept credit cards and do other business banking? We can do that. Want to offer a toll-free (or non-toll-free) number to your customers? We can do that, too.
I would not be overly surprised if they went after Quicken or a competitor next. Possibly even a shipping or storage company, too (but less likely since those aren't virtual).
Ebay's interest in Skype has nothing to do with augmenting their auctions with calls between buyers and sellers. This is about taking those (alleged) 50 million non-paying Skypers and giving them an easy, more attractive way of paying for individual calls rather then stumping up $5. Pretty much everyone has a Paypal account and this sort of tie-up would get them using both Paypal and Skype more, with people more willing to leave cash sitting in their Paypal accounts because "I might need it for calls". This would consolidate Paypal's dominant position, something Ebay are probably anxious to do in the wake of rumours of a Google e-payment service - most people will only really bother with one payment service and, if it covers their phone calls too, sticking with Paypal will be a no-brainer.
The real killer argument for the Paypal/Skype tie-up is, however, the possibilities it opens up for a whole new generation of premium phone services and the recent repositioning of PayPal, missed by many, strongly suggests that Whitman et al realize this - after years of holding back the whole idea of micro-payments, they finally decided to granularize Paypal's fee scale, making smaller transactions viable. Before, you had to pay 30c + 3% of every transaction, leaving you with 67c from a dollar sale. Now, they are willing to take 5c + 5% instead, leaving you with 90c.
This is huge news because it makes viable a whole new layer of services. I don't think the timing of that introduction is a coincidence. I believe that Paypal are preparing the ground so that anyone who wants to set up a premium number can do so via Skype - if someone fancies themselves as a fortune teller, a Windows guru, a phone psychologist, a language translator, anything at all that can be conveyed over the phone, Skype will allow them to receive calls for which they can charge whatever they want per minute, taken directly from the customers Paypal account.
The rakes that the traditional telcos cream from premium calls are obscene, resulting in unattractive overall rates, crippling a potentially huge homebrew industry before it even began. Seriously, how many of you regularly turn to premium phone-lines when you have a problem? I can definitely understand how talking to another human being, one expert at tackling my particular problem, could be useful - the current cost, however, takes that option right out of contention. Generally, too, a premium service can only serve one country, barely giving it room to breathe market-wise.
A Skype/Paypal solution would be international, meaning a techie in Bombay could build a reputation for solving computer problems for customers in Baltimore, more easily than getting the kid down the road to drop by and certainly more cheaply than phoning Compuworld or Apple. It would also allow that kid in Bombay to keep a meaningful percentage of his per-minute fee, allowing him to keep it low. You would soon have a massive market of providers, ranging from amateurs to highly experienced professionals, all promoting their services via websites and forums, all adapting their charges and services to market conditions. By building the charging mechanism right into Skype, Paypal would find itself sitting happily in the middle of a new explosion of cash transactions.
Just like Ebay did.
MSN Messenger isn't an open protocol either (The recent matter of MS opening up some API's for it and some other of their goodies is good, but doesn't count). This hasn't stopped FOSS implementations of the protocol based on reverse engineering.
At the moment Skype is a good product with a geek (& Joe Noob) friendly image so there's no incentive to want to create an alternative client. Should Skype drop a platform though, i'm sure atleast some of this enthusiasm for the service would be sucked into open source.
Even if Skype itself were to fail on platform X and noone was to create openSkype it should have generated enough buzz over VoIP by now to get open source to start picking up the slack.
"desktop application acquisition"
You mean like Google buying Picasa?
But why buy into it at all? Skype isn't a natural extension of eBay's business strategy; it's not even related to what they do. It's sorta like Pizza Hut coming out and announcing they're going to buy Lockheed Martin and build fighter jets. The general tone of the NY Times article is bafflement. Generally speaking, businesses do best when they stick to their core business- when they stick to one thing that they know how to do.
> WorldPay, FirePay, NETeller, ProtX, BidPay, NoChex, Verisign, SecPay,
> FastPay, NetBanx, ChronoPay, PPPay, MoneyBookers, ACT eCash, 900Pay,
> Citadel, etc. etc.
But which ones:
* Work internationally without major headaches.
(e.g., a transfer of funds between, say, Australia and Canada when both the sender and the receiver work in their native funds)?
* Allow flexibility in sending and receiving the funds
(by credit card, debit card, direct link to bank account, etc.)?
* Have low fees and reasonable conversion rates?
* Are well established and trusted by people?
* Have reasonable and effective customer service, fraud protection and dispute resolution policies?
Generally speaking, businesses do best when they stick to their core business- when they stick to one thing that they know how to do.
Tell that to general electric.