Slashdot Mirror
EBay Admits To Bad Call On Skype
MaineCoasts writes "The Times online reports that two years after buying Skype for 2.6 billion, Ebay yesterday warned shareholders that they may have made a mistake. In essence, they vastly overpaid for the company. ZDNet offers analysis of the announcement: 'Clearly, the current business model is not enough to satisfy eBay in light of how much the company spent on Skype. And the reason is simple. Even though Skype has done a very good job of getting users to download its software client, most people who use the service do so to make free Skype-to-Skype phone calls. The only way that Skype makes money from its subscribers is when people use its Skype-In or Skype-Out services. Skype-In allows users to pay to rent a phone number, which people on regular phones can call. Skype-Out allows users to call traditional phones or cell phones for a fee.'"
Just out of interest: Of everybody you've ever hear talking about Skype, how many mentioned the free Skype-Skype calls and how many mentioned you can pay to call others, too? (It's about 50:1 with quite a lot of non-techies in the 50 and an ex-coworker in the 1 group...)
I still remember that Ebay had difficulties to explain how Skype could integrate their core business.
There was no point for them to invest so massively in such a service.
Eh, well, except it was actually AOL buying Time-Warner. Merger, wherein AOL owners got 55% of the new merged company stock.
They later changed the name and refocused as the dot-com bubble collapsed and the 'AOL' part approached worthlessness in evaluation, and the company didnt exactly need the loadstone of a posterboy for the bubble as a name.
As to the flash-forward, the merger structure and name changes makes it fairly difficult to figure out exactly who the most stupid party was, but anyone left holding stock in the joint company probably had more left than if they'd been holding only AOL stock. Which doesn't exactly make them less stupid for touching AOL stock at all.
It's sortof sad how the high-flying corporate execs appear to have learned very little about how to avoid getting brainslugged by clever marketers.
Flaky is the word. I got Skype (and have used Skype-In and Skype-Out for around a year) simply because I didn't have a land line and rinsed £30 on a mobile to mobile (cross network) call in 1 night to my girlfriend. Skype has saved me money on such calls but just tonight Skype crashed twice in a 1 hour call. This is totally unacceptable for a "phone" service. I do quite like the Skype-Pro in that it allows free calls to landlines (this is in the Uk by the way) but when the calls get dropped on such a frequent basis it's almost embarrassing to call people with it. I like voip but will be changing providers the second my current Skype-In number expires... Also, getting charged £1.50 for every £10 worth of Skype-Out credit because I'm in the Uk is painful. Worth Billions? You're fucking joking.