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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 in for a little surprise if eBay pays with Paypal. Whoops, your account is locked, sorry.
A+++++!1111111 would tlak with agin
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.
Great, so now instead of people emailing me about my Ebay auctions, they can call me at any time and ask, "How does that there Tivo thing work anyway? Can I watch HBO if I don't have cable? Can you explain it to me?"
What's your damage, Heather?
How are they going to earn that back from a "free" VoIP service?
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.
Maybe not...
You are not alone. This is not normal. None of this is normal.
Except for the obligatory dupe of this one, of course! ;-)
:%s/Open Source/Free Software/g
YTARY!
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.
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.
Clearly eBay should be made to bid for it ;-)
I can just imagine it: Hundreds of toffs winking and waving hankies at microphones as they try to bid on a piece of art they can't see.
I thought we'd got over the dotcom madness?
Hal Spacejock: Science Fiction with Nuts
Here's the link to their announcement
Summation 2
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...
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
... 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.
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.
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 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."
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.
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?
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.
For things worth actual money?
I bid grgle-snrt I bid zzzzffff No, I bid kkkppp No first f-f-f-f-first! twenty eeeehooonnnggg but wait a wawawa twenty-eight pork
Great idea, boys.
Never attribute to malice that which can be explained by mere idiocy.
Yeah, but Skype has a client base... they are buying the customers as much as they are buying the infrastructure
LOL! I love it when the same post gets modded "insightful "and "troll" within five minutes!
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
Also, remember that Skype is not an open protocol. You cannot write your own client should support for your platform be discontinued.
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).
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
This is not about integrating VOIP into eBay's auction business. It's about large tech companies scrambling to get a share of the predicted-to-boom VOIP market.
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Just recently, Microsoft purchased Teleo, which will allow MSN messenger users to make PC-to-Phone calls. Yahoo purchased Dialpad, which has similar capabilities to Skype (PC-to-PC and PC-to-Phone). And of course Google introduced Google talk, which is the first step in the process. eBay just doesn't want to be left out.
This is not really my insight. See for example:
http://news.ft.com/cms/s/d1218d8c-2097-11da-81ef-
Imposing Libertarian views on everyone online since 1992.
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.
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...
WorldPay, FirePay, NETeller, ProtX, BidPay, NoChex, Verisign, SecPay, FastPay, NetBanx, ChronoPay, PPPay, MoneyBookers, ACT eCash, 900Pay, Citadel, etc. etc.
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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Skype works behind firewalls because it can relay calls off another node that is *not* behind a firewall. If corporate goon A calls corporate goon B where both are behind a firewall, the call is going to be routed through a *random* box on the internet. It could be a PC in a college residential network or some dude's box in kerplexistan. While this solution does work it has a number of problems:
1) If the number of machines without firewalls starts to fall dramatically skype users are SOL. This could happen if most PC's have an automatic firewall enabled or broadband providers start shipping modems with built in firewalls.
2) I don't know about you but it's a bit odd routing my voice traffic through non authenticated computers - encryption be damned.
3) Routing around firewalls provides a *good* calling experience but not reliable. Skype calls can drop on you randomly. You also can have trouble connecting when you want to call. While skype is great for people who want high quality calls that work most of the time, it isn't really great when you try on rely on it.
I use skype and think it is a great product... but I don't quite understand how it people think it is worth so much money as a company.
I wonder what category the auction for Skype was under. I couldn't find the Overbloated Corporate Buyout category.
But E-bay got in at the last second.