Why eBay bought Skype

I’m finally starting to understand a bit better why eBay bought Skype. It seems that eBay isn’t buying Skype to get into the long distance business. eBay intends to use Skype to help facilitate transactions by allowing buyers to speak directly to sellers, as well as introducing new sources of income by charging sellers for the privilege of having buyers call them.eBay believes that pay-to-call, where current fees range between $2-12, will be attractive to sellers and buyers in high-value categories such as cars and real estate where potential transactions require more communication.

I think eBay are also hoping that there isn’t a lot of crossover between the two userbases and that getting access to Skype’s userbase will help them break into new markets. However, the biggest market that eBay wants to break into is the Chinese market and I don’t think Skype is going to be the catalyst for eBay gaining a foothold as China Telecom is reportedly blocking Skype.

I can see the logic in offering pay-to-call services on eBay, but surely eBay have over-paid to add this functionality? I’m certain that for a fraction of the $4.1 billion they paid for Skype, a company that will only generate $60m in revenues this year, they could have developed the features themselves or bought a cheaper company.

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