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eBay to buy telephony group Skype
dillonstars




msg:620886
 12:43 pm on Sep 9, 2005 (gmt 0)

[news.independent.co.uk...]

EBay, the online auction company, is in talks to acquire Skype in a deal that could value the internet telephone service at as much as $5bn.
...
There have been a flurry of moves into the VoIP sector recently. Google has launched its Google Talk service, while Microsoft bought Teleo last week. Yahoo! has bought Dialpad to offer a similar service.

Apologies if this is already being discussed... I couldn't find it anywhere yet.

Rob

 

dillonstars




msg:620887
 12:24 pm on Sep 12, 2005 (gmt 0)

[news.bbc.co.uk...]

OK so the final figure wasn't anywhere near the £5bn mentioned above, but it's still an interesting development...

also this thread - [webmasterworld.com...]

trillianjedi




msg:620888
 12:47 pm on Sep 12, 2005 (gmt 0)

but it's still an interesting development...

43 times annual revenue? You bet that's interesting.

Official eBay press release (.pdf):-

[investor.ebay.com...]

Online shopping depends on a number of factors to function well. Communications, like payments and
shipping, is a critical part of this process. Skype will streamline and improve communications between
buyers and sellers as it is integrated into the eBay marketplace.

dillonstars




msg:620889
 1:08 pm on Sep 12, 2005 (gmt 0)

Will ebay integrate Skype into their main site in some way? I can see paypal options being added to SkypeOut very soon...

Visit Thailand




msg:620890
 1:20 pm on Sep 12, 2005 (gmt 0)

perhaps someone can merger these two threads.
[webmasterworld.com...]

Import Export




msg:620891
 1:56 pm on Sep 12, 2005 (gmt 0)


And also merge: [webmasterworld.com...]

decaff




msg:620892
 2:34 pm on Sep 12, 2005 (gmt 0)

The current value of the deal is in the 4.1B range over several years depending on how well Skype "performs" ...

Bloomberg's take [bloomberg.com]

iblaine




msg:620893
 4:49 pm on Sep 12, 2005 (gmt 0)

It's now official that eBay will pay $2.6B for Skype, half in cash, half in eBay shares. Another $1.5B will be payed out in 2008 or 2009 if performance goals are reached.

walkman




msg:620894
 5:04 pm on Sep 12, 2005 (gmt 0)

Google is next to buy things to grow. Unless they figure a way to make $$ with Froogle, they're in trouble. Wall Street wants 50% increases for a $300 stock.

gopi




msg:620895
 6:07 pm on Sep 12, 2005 (gmt 0)

Someone in a popular blog comments ...

So at 50m downloads, that’s $52/download, or $26 In CASH per download.” Downloads, are the new “Pageviews it seems

Mind Blowing is all i can say :) . I liked the concept of skype from the begining but think this valuation is really really absurd .Think the days of broadcast.com are slowly returning!

gopi




msg:620896
 6:51 pm on Sep 12, 2005 (gmt 0)

<Added to the previous post>

Said all these ,I still think eBay is not that stupid and they see something which most of us miss!

walkman




msg:620897
 7:27 pm on Sep 12, 2005 (gmt 0)

>> I still think eBay is not that stupid and they see something which most of us miss

was Yahoo stupid for buying Geocities, broadcast.com (as theo ther poster mentioned), AOL with Time Warner etc? Mistakes and bad calls happen. A lot of times, companies just buy to show that they're active and that so they have the technology just in case. Remember when a companies stock would go up 50%, just becuase they added auctions to their site, or purchased a start-up with i or e as their first letter?

if they bought it just so some merchants on ebay can accept calls, I think it's a huge and expensive mistake. Now if they full steam VOIP, in addition to any ebay link, that's totally different.

philaweb




msg:620898
 7:53 pm on Sep 12, 2005 (gmt 0)

eBay buying Skype is a really smart move.

I'm sure that after some time it will only be possible to Skype for free P2P if you're an eBay seller or buyer.

Brings a completely new dimension to auctioning via eBay and will probably kill spoof eBay phishing.

arbitrary




msg:620899
 8:26 pm on Sep 12, 2005 (gmt 0)

Does anyone know if Skype has assets beyond its internet business?

davidandrews




msg:620900
 9:47 pm on Sep 12, 2005 (gmt 0)


As I usually lurk instead of comment, I have decided to become more active. The beauty in the eBay-Skype play is that eBay also caters to more than just the casual garage sale seller. The skype transaction:

1. Reduces friction in auction markets. A free P2P service cuts down communication time and allows both professional buyers and sellers to transact much more quickly. As the world's largest auto-dealer eBayMotors would provide a great deal of value by allowing the consumer to get the salesperson on the phone. As a revenue stream, eBay/Skype could mark up their termination costs per minute at the termination points.

2. eBay also caters to the SOHO market as an outlet for many retail GOODS, but not yet SERVICES in the truest sense of the word. Many firms use it to unload excess inventory or even get better prices for their stock. Other people professionally import and sell products. It wouldn't be that big of a stretch to provide the ability for people to auction of pure services as well or to become a resource for goods and services either on a pay per call model for services such as Lawyers, Doctors, Contractors, and so forth. The SOHO market of people who don't want to deal with a website, don't have a website, or can convert a sale over the phone is the whol advantage of pay per call technology.

3. Facilitation of cross-border trading. This could help simplify cross-border trade. I'm not sure if eBay has any import/export technology integrated in it.

I believe this greatly enhances eBay's strategic potential.

Just my two cents and probably worth a little less. :)

--DA

Garfieldt




msg:620901
 11:21 pm on Sep 12, 2005 (gmt 0)

very interesting, I bet buying cars or houses or anything expensive via ebay will become much safer and easier when you can call with the seller.

HawaiianArt




msg:620902
 12:02 am on Sep 13, 2005 (gmt 0)

You really wont spend the dime to buy a car or house just because you cant "skype" them for .02 per minute? Tell me what I am missing.

Personally, I can not stand downloading software to accomplish something I can do with either my regular telephone or email. If I have to "skype" merchants to talk to them, well guess what, I would rather take my business elsewhere.

This is not to say that skype is not useful for ebay. It just seems that sometimes technology becomes the "thing to do" for its own sake and not because of its usefulness. Just because something is a new way to do it, does not mean it is a better way to do it! Remember fellow tech geeks, you are not normal humans. Normal humans prefer a push button phone.

Please respond and tell me how Skype will improve my life for the exception of saving me the $1 of phone call time. Maybe not that much even... ever heard of calling cards?

If things were reversed and a device was coming out that allowed you to not boot up your computer to make a clear telephone call by simply entering a number, people would be on here talking about how it was going to replace Skype even at 5 cents more per minute! Heck, maybe even eBay would buy it? EBell? I digress.

MoneyMan




msg:620903
 1:00 am on Sep 13, 2005 (gmt 0)

pay per call model for services such as Lawyers, Doctors, Contractors, and so forth

Agreed. I think this is the biggest potential gain with this acquisition. The service-based SME's are very big spenders in marketing (just ask any yellow page company). This is a group their current model doesn't capture.

davidandrews




msg:620904
 2:02 am on Sep 13, 2005 (gmt 0)

" You really wont spend the dime to buy a car or house just because you cant "skype" them for .02 per minute? Tell me what I am missing. "

What you are missing is that to the SOHO, small, and mid-sized business it is worth the ability to get in touch with the consumer in a way that is convenient to the consumer at the moment he or she is making the decision. i.e. Enter your phone number and the seller will call you - and you can remain anonymous. It is a hugely valuable asset. In all likelihood eBay would probably either:

a) Give away the service for physical goods that are being auctioned in order to increase overall transaction volume.
b) Charge a service fee for physical goods that are being auctioned.
c) Do a Pay Per Call model for service where the merchant bids for a call. i.e. Contractor, Attorney, Doctor, Florist.

Of course there are other ways.

--DA

P.S. Ever use Skype?

universetoday




msg:620905
 2:11 am on Sep 13, 2005 (gmt 0)

I've been wracking my brain, and I can't see how Ebay is going to recoup their investment in this venture. Skype is great, and they've had millions of downloads, but it's happened in the last year or so. That means that it's the concept that's really hot (free phone calls from your computer) and not necessarily the platform. Google has come out with Gtalk, which is just a few features shy of what Skype can do, and it's using open protocols.

I think free Internet telephony is in the same kind of space as P2P software applications. The herd will move via word of mouth to the application which offers the best service/cheapest price in a heartbeat. Napster -> Morpheus -> Kazaa -> eDonkey -> Bittorrent. Each one of those applications has had millions of downloads and consumed great portions of the Internet's bandwidth at their height, and then fell to the wayside; sometimes in a matter of months.

In the Internet telephony market, the herd will move, probably overnight if some competitor can come out of nowhere and offer something to beat Skype - free computer-to-phone calls (or vice versa) would do the trick. Oh... like Google.

So, except for getting 52 million email addresses, purchasing Skype is mostly worthless when some competitor scoops their entire market. And unless they're willing to drop everything and focus on being a phone company to beat Google, AT&T, Vonage, etc, they're going to be left behind while they focused on their auction business.

If they keep a totally hands off approach, and just treat it like an investment, funneling cash and staying out of its way, then they stand a good chance of recouping their investment. But Skype is going to have to be a tremendously innovative company once the telcoms get rolling.

I just don't see it. If I was an Ebay investor, I'd be furious.

nativenewyorker




msg:620906
 7:30 am on Sep 13, 2005 (gmt 0)

davidandrews hypothesized:

It wouldn't be that big of a stretch to provide the ability for people to auction of pure services as well or to become a resource for goods and services either on a pay per call model for services such as Lawyers, Doctors, Contractors, and so forth.

Professional services are much different than commodity type items that you buy on eBay. People want someone who is qualified and with whom they have a rapport. Getting a better price is a bonus.

If you are arrested for murder, are you going to look for the cheapest lawyer available or are you going to choose the best qualified one?

If you are seriously injured in an accident, are you going to bid for the cheapest doctor or eBay or call the one that is going to save your life?

bloke in a box




msg:620907
 8:58 am on Sep 13, 2005 (gmt 0)

To continue using your analogy - that's all very well taking it to extremes, but what about when you want to query some minor point on the law? or wonder what's the best treatment to put on the bunion on your toe? etc.

Personally I find it a very exciting acquisition. :)

TravelSite




msg:620908
 9:07 am on Sep 13, 2005 (gmt 0)

Perhaps they are just betting that Skype will continue to be the main VoIP software and have huge a huge internatinal following. Revenue could come further down the line just as it did with search engines. This would be a dangerous bet though - with other companies producing their own software and the future possibility of open standards to allow anyones VoIP technology to communicate with each other.

On another note if Skype continues to increase its user base rapidly then eBay could introduce Paypal to many more people - on an international level, encouraging more people to use PayPal.

davidandrews




msg:620909
 2:11 pm on Sep 13, 2005 (gmt 0)

Native New Yorker:

"Professional services are much different than commodity type items that you buy on eBay. People want someone who is qualified and with whom they have a rapport. Getting a better price is a bonus.

If you are arrested for murder, are you going to look for the cheapest lawyer available or are you going to choose the best qualified one?

If you are seriously injured in an accident, are you going to bid for the cheapest doctor or eBay or call the one that is going to save your life?"

Yes, you are 100% right in establishing a rapport which at least for some industries such as law is helpful. If you are looking for a criminal defense attorney you may or may not want to find them on eBay. Also in a service scenario, eBay would be able to define an eBay system. While professional services are harder to do (although you've seen the class action lawsuit guys on the net), other services could be a florist, fast food delivery, massage, etc.

David

Harry




msg:620910
 6:25 pm on Sep 13, 2005 (gmt 0)

Bah, Skype doesn't work half the time and I got annoyed about the sudden drop of communications so I went back to a real phone. The only reason Skype is still on my computer is because I forgot to uninstall it.

Good thing I'm not a Ebay shareholder...

nativenewyorker




msg:620911
 6:50 pm on Sep 13, 2005 (gmt 0)

The blackout yesterday in L.A. reminds me of the summer of 2003 when the Northeast got hit with a major blackout. Despite the blackout, my landline continued to work. Cell phones and VOIP will not work during crisis situations when there is no electricity.

MoneyMan




msg:620912
 10:44 pm on Sep 13, 2005 (gmt 0)

Professional services are much different than commodity type items that you buy on eBay. People want someone who is qualified and with whom they have a rapport. Getting a better price is a bonus.

The rapport is with Ebay, and the user ratings. Davidandrews is correct in that ebay could create a different system. Who says it even has to be an auction model. The angle they have is that ebay as an enormous base of users which trust the ebay experience.

Let us not forget that Ebay also owns portions of craigslist. There are social networking/pay per call plays that could happen here beyond just ebay proper.

davidandrews




msg:620913
 11:25 pm on Sep 13, 2005 (gmt 0)


I forgot about Craigslist, but that is a great insight - along with rent.com. People get to post for free and pay for results. That should be a natural for eBay.

figment88




msg:620914
 10:05 pm on Sep 15, 2005 (gmt 0)

Here's an interesting article about privacy concerns with theeBay Skype
http://bayosphere.com/blog/dan_gillmor/20050912/ebay_buying_skype_the_privacy_question_grows

Another interesting thing I read the other day is that Skype uses it users' computers to route other users' calls. Guess that flows from the founder's experience with Kazaa. I really don't like that model, though. I wonder if eBay will add dedicated routing machines.

[edited by: lorax at 12:34 pm (utc) on Sep. 16, 2005]
[edit reason] delinked [/edit]

reli




msg:620915
 6:36 pm on Sep 17, 2005 (gmt 0)

It's a good buy:

* Skype computer-to-computer calls between countries are clearer than landline, so .02c beats .10c in price and clarity.

* Perhaps we don't fully see where things are going. We're evolving into a "always-on" "always-with-me" communications model. I predict one day soon my wireless provider will give me a device that uses always-on hi-speed internet, combined with an instant messenger "PUSH TO TALK" feature for crystal-clear world-wide communication, with an IM-voicemail feature. Teenagers and others will make this type of device the most popular in history, although it will be expensive. eBay wants to be a part, somehow.

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