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.'"

Comments

SIP VoIP vs Skype

[bernywork]

I use SIP extensively, it's an open protocol, used by Asterisk and is implemented by a heap of companies, providing a range of services in a range of countries. Skype uses their own protocol, and has low call quality. This isn't what I want to be paying for when buying services such as Skype In or Skype out.

SIP allows me to connect to networks without hassle and without problem. Half of Skype's problems that I see is the fact that they are using a closed protocol, again, the call quality is too low to be considered acceptable as well.

If they managed to fix this, I would be a lot happier to move everything onto one provider. I currently have to subscribe to three different service providers to get what I want, this means three bills, three accounts (In different countries, so different currencies as well) to manage and three times the headaches.

If they started offering a decent solution, and I would be one of the first to jump ship.

Berny

Re:Pretty obvious, wasn't it?

[Jaseoldboss]

I've also used it from Holland, leaving my cellphone in the UK. Nearly every internet cafe has Skype installed and, even including the internet fee, it's cheaper than making an international call.

However, from the article:

"Skype has been focused on user acquisition, and it's done a great job. But we also feel like we can find new ways to monetize those users."

I'm very wary of what 'monetize' might mean. I'm surprised that they didn't plaster ads all over the application soon after eBay bought it to be honest.

Re:Pretty obvious, wasn't it?

[griffjon]

The problem with skype is that their income is in inverse relation to their network size, making it a particularly poor "web 2.0" network-driven company. The more people who have skype (and a connection to support it), the fewer people will use skype(in|out) services. For example, my girlfriend lived in China over the summer. At first I called her using skypeout. When she finally got Internet, tho, we just used skype-to-skype, because of better call quality and video capabilities.

Skype has to find a way to increase their revenue as their network of users increases; probably through an ad-revenue stream to their in-calling services. Doing this the wrong way, though (pre-call audio ads, etc.) will just scare people off to IM services with voice chat capabilities, which is increasingly all of 'em.

Good luck to 'em. I like skype (except for the lack of "quit/exit" in their file menu!)