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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."
...now stories that "interesting" about Corp XY going to buy Skype won't gonna make it in between of news that matter that often any more.
How are they going to earn that back from a "free" VoIP service?
One of the reasons eBay has is that they can use Skype to let buyers and sellers talk to each other; but my eBay name and Skype name aren't the same. If some contacts buyer/seller through Skype with eBay screenname as Skype name, they're is going to be some potential for social engineering.
With a large US company owning Skype I think we can take for granted that getting SkypeIn sorted out with the telecomm authorities of smaller, European countries will simply not happen. I expect Skype will now grow much more US-oriented than before - I simply can't imagine why Ebay would bother with, or even understand those Euro-centric problems.
Time to start looking seriously at the existing competition, small as it is.
Great, another useful tool brought down to its knees by a company with a need to buy something 'sexy' without an intelligent business plan. Thank you eBay! Ugh....
"EBay plans initially to pay $1.3 billion in cash and $1.3 billion in stock and to make a further payout of up to $1.5 billion by 2008 or 2009 if financial targets are met, giving the deal a total value of up to $4.1 billion, the source said."
p e=technologyNews&summit=&storyid=2005-09-12T081656 Z_01_HO227963_RTRIDST_0_TECH-SKYPE-EBAY-DC.XML
Here, check this out:
http://today.reuters.com/news/newsarticle.aspx?ty
What a bizarre combination, auctions and VoIP telephony. I can't but help think that this is part of the current fad of big net companies buying up the small-but-cool app stuff?
I mean you can see where Google's going with their purchases, but Yahoo with Konfabulator and eBay with Skype seem to be pointing in a new direction of desktop application acquisition.
Hrrmm. would they transfer my skypeout balance to my paypal?
LOL!
It's good to see that hot air still sells, dang this is almost like the heady days 97-98!!
2.6 Billion dollars for what? A client list? A gateway to copper lines?
Sheesh!
-if at first you don't succeed, stay the heck away from paragliding.
From the article : .... eBay is also attracted by the idea of letting its buyers and sellers talk to each other via their computers ...
This whole time I was really hoping to see what google was going to do with this technology with the rumors around the buyout. http://slashdot.org/article.pl?sid=05/08/24/121625 8&from=rss
hm, correct link is
this.
Google has been known lately for snatching up many things that have become rather popular.
eBay, for the most part, has stayed under the radar (at least, as far as corporate purchases are concerned.) However, even before they started buying things, they already had their hand in every consumer goods market with the U.S. and every other country (though not directly.)
Then they bought PayPal (what, a year ago?). This transaction made plenty of sense, as PayPal was used to pay for many of the auctions on eBay.
But now that eBay is getting Skype, are we seeing a clever purchase or the beginning of a buy-frenzy? This layman cannot see an overall connection between Skype and eBay/PayPal (aside from being general commerace tools); but that doesn't mean they can't buy Skype. And if they purchase Skype, what might they put their grubby mitts on next?
Yeah, but Skype has a client base... they are buying the customers as much as they are buying the infrastructure
Although people may disagree because its cool to hate paypal, but look at ebay and paypal? completely vertical markets,
Not really, as paypal's main reason for existence is paying for online auctions (ie eBay). Sure, paypal has some use beyond that, but you could at least see a link between paypal and ebay.
It's a lot harder to see what Skype has to do with online auctions. What's next, eBay search?
eBay mail(especially as they already have an email like function in my ebay)? ebay news & weather? Maybe it is like others have said and that the link is with PayPal's micropayment system than eBay.
At some point, somewhere, the entire internet will be found to be illegal.
Also, remember that Skype is not an open protocol. You cannot write your own client should support for your platform be discontinued.
Perhaps, but eBay could have simply integrated a new Skype-like eBay product on eBay/PayPayl and drawn some of Skype's customers and created new customers. Ideally the simplicity of the integrated product would have drawn Skype's existing customers at a fraction of the cost. Either way, being a cash/stock deal, the out-of-pocket cash price to purchase the customers is only about half of what other /. posters suggest [~$650/user] and reasonable to purchase an existing customer base and eliminate the competition at the same time.
Oh well, if you can't join 'em, buy 'em.
Seriously, what good is a closed software-only "telephony" application when VoIP is the latest craze? With SIP, I can use an adapter to connect any common phone. With Asterisk I have a complete PBX that I can program to do anything, from call routing to voicemail to menus to different behaviour based on callerid and whatnot.
Sitting in front of a PC and being able to talk to someone is so 1999.
Of course it runs NetBSD. BTC: 1NT7QvbetmANwaMzhpVL6
And yet another useful, cheap, user-friendly technology is ripped away by a corporate Godzilla. eBay is as bad as they come when it comes to your rights and convenience (they jump through hoops to avoid any responsibility and liability), and are among the more notorious spammers out there. Can unsolicited cold calling via Skype be far behind? Still waiting for Google's PayPal alternative...
There is nothing wrong with Paypal and eBay that wouldn't be cured in a heartbeat by some credible competition, but I don't see any credible competition at the moment. Auction sites (and similar listing sites) come and go, as do online payment systems. I have a few such sites that I like (e.g., Blujay.com and TheHighBidder.com) from the standpoint of user-friendliness and lower cost, but they can't deliver the traffic like eBay. One alternative for online payments that should definitely be avoided is the latest Ponzi scheme from Damon Westmoreland, called GreenZap. I have some hope for either GooglePay or AliPay (from the B2B site Alibaba.com). I would not mind seeing both competing head-to-head with PayPal. Unfortunately, in the Internet world, there is a tendency for only one company to completely dominate any particular niche -- and #2 is usually way down in the noise.
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You want examples? The whole "diworsification" trend of the 70s and 80s. GM bought a satellite company (Hughes) and a data processing firm (EDS), for instance. See how well that worked out for them. The idea was that they'd use these businesses to ride out the slumps in the economic cycle...in reality, all it did was divert management's attention from their core business.
All of the derived wisdom in business is that you find what your company is great at and put everything behind it. Read Good to Great.
eBay buying Paypal makes sense because there are obvious synergies - you buy something on eBay and pay for it with Paypal (and Paypal was also profitable). Sometimes big acquisitions make sense - Oracle buying Peoplesoft and Seibel, or Ford buying Hertz (though after 15+ years they're now ditching it). Sometimes the deals are more of a stretch...e.g., FedEx/Kinko's and UPS/Mailboxes are both based on a very specific strategy and set of assumptions.
eBay buying Skype makes zero sense to me. If eBay had bought Christie's or Sotheby's, I might understand...but buying Skype is (a) reaching waaaay over to a completely different market where the synergies are very speculative, and (b) investing in an unproven, unprofitable venture with a LOT of cash, reminiscent of the dot-com days.
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A Skype/Paypal solution would be international, [...]
I don't know about that - here in Germany, premium phone services are heavily regulated (why? I don't really know; I guess just too many crooks abused them and found too many fools to pay them).
I assume Germany is not the only country in the world where this is the case.
But for the US and other less regulated economies, your idea sounds feasible.
"Oh, a lesson in not changing history from Mr I'm-my-own-Grandpa." - Dr Hubert Farnsworth
A user count of 52 million (+150,000 per day), and more voice minutes than any other Internet voice communications provider? If you were buying into the industry, why would you compete with Skype when you could buy it?
I'm not saying that the German government can't throw a spanner in the works, I'm saying that they won't.
Politically, no Western government is going to engage in a drawn-out witch-hunt, mandating the involvement of banks and credit cards companies.
To draw a relevant comparison, European companies have still not managed to universally enforce VAT collection despite threatening to sue American service providers selling to European customers. They are willing to chase that because it's huge money, potentially 15-20% of transatlantic commerce, but it hasn't been easy or very successful.
Notice that they have chosen not to pursue the simpler path of accessing their citizen's bank account and adding a VAT charge to every online service transaction. This is because there are very real blocks, both cultural and legal, that, for the most part, render bank accounts sacred - such access would force to rich to shoulder their fair share of the tax burden and that will never be allowed to happen.
In the case of pursuing the much smaller fish of premium phone services, the only electorate that actually like to see their government flying in the face of the advances that the Internet allows are the French. Every other government knows that stopping their people from benefiting from better services and lower prices is a vote loser and, at the end of the day, that's what it's all about.
BTW, Paypal/Ebay will, absolutely, collect VAT on behalf of European governments, Skype already adds it to your top-ups if you don't have the foresight to say you don't live in Europe. All I'm saying is that the premium phoneline providers are going to lose their monopolies and, with their passing, the market will bloom.