The managers of eBay, the world’s largest online auctioneer, had something else in mind in September 2005 when they decided to pay at least $2.6 billion to buy Skype, the pioneer in Internet telephone service then based in Luxembourg.
Back then, eBay’s chief executive, Meg Whitman, predicted that the 55 million people who had downloaded Skype’s free Internet telephone software would bolster eBay’s online auction and PayPal payment businesses, driving sales and profit.
Today, eBay sellers can place a “Skype Me” button next to their items on eBay so that buyers can call and discuss possible sales. EBay is also experimenting with using Skype software to transfer money between PayPal accounts, expanding the payment system to Skype.
But more than a year after the purchase, eBay, one of the world’s largest publicly traded Internet companies, is fighting to convince skeptics that the deal, whose final price tag could reach $4.1 billion if bonuses are paid, was indeed a smart move.
Jeff Pulver, a U.S. entrepreneur who organizes conferences on Internet telephony, said Skype’s business was taking shape and had improved under eBay. “Whether they figure out a way to make money out of it, I don’t know,” said Pulver…”Whoever ends up on top, though, VOIP is here to stay.”
“Skype is in danger of becoming the Netscape of voice over Internet protocol phone companies,” said Martin Geddes, a former consultant to an online help service for Skype users called Skype Journal, which is not affiliated with Skype. Netscape developed the first commercial Web browser but lost out to Microsoft.
“Skype may prove that you can be the first to innovate a piece of software but the last to find a way to make money from it,” said Geddes, the chief analyst at STL Partners, a London research firm specializing in Internet telephone industry. EBay has not disclosed the exact amount of losses generated by Skype.
Kazim, the Skype president, said eBay expected Skype to generate its first operating profit by the end of 2007.
Excepting a consistent inability to wander through a PBX, I love Skype. Most of my family have dropped their land lines for Skype — and the quality of communications, even when using a cheapo headset, makes POTS sound like tin cans and string.
I love Skype. And use it on daily basis.
I also like warm, fresh bread, but I wouldn’t pay 50 bucks for one.
“At least $2.6 billion to buy Skype” baffled me.
Added value for ebay? Yeah, right. Everybody will use Skype now when they buy vintage DOS games and old shoes, and the money will roll in….
This was a ‘we need to buy another company to show we’re serious’ move when it happened, and it still appears to be the same now. The two businesses don’t align well, and I dobut the E-Bay crowd really wants to talk with each other via any method other than E-Mail.
Best move for E-Bay shareholders? Sell the company.
You have to pay for skype i didnt know that, until i tried it and then uninstalled it.
#3
Depends where you are, and what service you use.
Calls from US to phones in US and Canada is for the time (at least for the rest of the year) free.
Calling a phone elsewhere costs. You have to use their prepaid Skype Out. The rates are very good if not (among?) the best.
Their other services, like the line in and voice mail cost.
Of course the Skype to Skype is totally free. Free worldwide talk works for me.
There are lots of third party hardware enabling the use of handsets, like cordless phones.
The only downer for me is the local broadband service. Broadband/high speed? My A$$. But I can’t blame Skype for that one.
I only pay .02 / min. for long distance. Why bother with Scype? Aren’t the free calls restricted to other people who also use Scype? When I shop on Ebay and want to talk to the seller it costs me 10 cents. It’s the friggen other charges I worry about. The $100 guitar I recently bought cost $215 after delivery, customs fees and Canadian taxes.
#5
A call from US to United Kingdom:
Net2Phone : 8 cents
Skype : 2.1 cents
Net2Phone has a $1.49 monthly service charge.
Skype doesn’t.
Net2Phone: Minimum $25 purchase of calling card with credit or debit card required.
Skype: I can buy for $ 10 if I want.
These are just “randomly” picked rates/services. Please tell me what’s so good about Net2Phone. For what I know, you might be right. I’m just curious. Is something keeping you from using both?
eBay and PayPal give me a little more bitter taste, so I I can see your point there. But that shouldn’t have any influence in making phone calls….
“eBay and PayPal give me a little more bitter taste, so I I can see your point there. But that shouldn’t have any influence in making phone calls….
Roder, I guess I was making a comment on the usefulness of the Skype button on Ebay. For me it doesn’t seem worth the trouble.
OOPS. Sorry about that Roger, unless of course you have a souped up T-Bird 34 coupe.
JimR
I wouldn’t mind a T-Bird ’56 😀
I suddenly realize I haven’t used eBay since they bid on and won Skype..
As for the free calls, it is from Skype to any ordinary phone, I think even cellphones, within USA and Canada. Until 2007 at least.
Skype to Skype will probably stay free “forever”, and is a sweet way of keeping in touch with folks overseas.
Anyway, I wouldn’t be very surprised if the good, free “Skype to phone stuff” changes into “bad, expensive stuff” in a not too far future. Just too good to last 😐
Pedro
Thanks for the info. I’ll look more into it if/when I need an alternative to Skype.
It’s certainly worth looking into the “low end” services rather than jumping on the $ 15-20/month services like Vonage and the likes. I haven’t looked into their service as it’s pretty much the same as for an ordinary land line service IMHO. They make some funny commercials tho…
So, was Skype steal for eBay?
It was a steal alright, but I don’t think it was eBay’s.
Skype has a serius problem offering their services for potential markets.
Here in Brazil we have 80 million cellphones and 40 million landlines, but Skype doesn’t offer the SkypeOut Global Rate here. Instead, we have to pay the regular SkypeOut fee that is more expensive than regular calls.
One big problem with Skype is it’s proprietary protocol. It will never be considered serious until it opens up and uses standard SIP or similar as well as being able to use Skype with an IP-PBX system like Asterisk.
Hi,We’re priveleged to be working with the folks who made an amazing application called “Adondo PAL”, an extremely forward-looking program that turns your PC into a gateway for information, and allows you to do pretty much anything a Blackberry can do, except by by speech, or, by TouchTones you can do with a Blackberry..And do this from any phone!This program gives your PC a VoIP phone number, or SkypeIn number.. ! (Yes there’s a new Skype version releasing).. And you can call, from anywhere to get information you’d have to get three other devices to work together to emulate.In addition to managing Outlook, remotely by voice, it allows you to dictate new e-mails and replies to e-mails, as well as call you with notifications of appointment reminders, message from “hot” Outlook contacts, and/or wake-ups.With PAL you can call Your PC for Email, Podcasts, Real-time Traffic, Real-time weather, Real-time stock quotes and more…by speech, or by touch tone.Try that with a Blackberry!
#16
Oh shit, how I hate spam……