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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Comment by BusinessModelInnovation BusinessModelDesign on 13 September 2005:
Well, some reasons are emerging and are discussed eagerly.
Have a look at e.g. this post:
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 char…
Comment by Anonymous on 13 September 2005:
Hi. I'm a Digg user and I appreciate the article. I immediately figured out what eBay would want with Skype and thought it would be a good idea. My mind didn't make the jump to having sellers pay to use it though. That part is terrible. It's already cost prohibitive for the average user to use eBay to unload items from around that house and now it may be even more so. Especially if this Skype thing catches on with Ebay. I wonder how it will affect the way Skype is used outside of Ebay?
Comment by Anonymous on 13 September 2005:
Skype is really cool, but when is ebay going to realize that most of their users can't program a VCR let alone install software from the internet!
Comment by Anonymous on 13 September 2005:
I think that Google and eBay are in bed with each other, the only reason that eBay bought Skype was because the Skype program was better at doing everything than the Google one, and instead of being seen as Google taking out the competition they decided to just have eBay do it and then make Skype seem like it's not very good anymore so that people will move to Google Talk (Which is crap to say the least).
Comment by Anonymous on 13 September 2005:
I live in China and use Skype without problems to talk to friends and relatives back home.
Comment by Anonymous on 13 September 2005:
I just heard this rumor. Wal*Mart + eBay.
Merging.
Comment by Anonymous on 14 September 2005:
Ebay is trying to position itself to compete with Google and Yahoo. Google may be purchasing a PayPal like service, so this acquisition of Skype is a keeping up with the Jones' move.
And YES, they paid way too much.
Comment by Anonymous on 14 September 2005:
Why pay 4.1 billion for just a basic Voip feature on eBay? Unless they think that Skype itself is about to make a hell of a lot of money…