eBay's Skype Plan: Make Money From Free Calls
from the jedi-mind-trick dept
eBay CEO Meg Whitman defended the company's purchase of Skype to analysts yesterday -- or tried to, anyway. She first said that voice calls will eventually be free, which really isn't anything new, but will make it a little difficult to make back that $4 billion. The plan, then, is to make money from the "ecosystem" around it. BusinessWeek says there's a five-fold strategy: "integrate" Skype with all of eBay's various brands and properties, give every Skype user a PayPal account, charge businesses for ads users can click to make inbound Skype calls, use Skype to make inroads into China and Japan, and finally, sell add-on Skype services. It's really hard to see how any combination of those is worth $4 billion. It's totally unclear how "integrating" Skype into eBay will generate any revenues, and it's also not clear why businesses would pay for special Skype-able ads when users could just Skype them for free. And it's great that eBay hopes to use Skype to expand in China, but some Skype services have already been blocked there, so it's not the most stable environment. Whitman's plan doesn't evoke much confidence that eBay has a viable plan to make money from Skype, and it's really hard to understand why they couldn't have offered most of these services through a partnership rather than an overpriced acquisition.
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Trying to buy customers by Anonymous Coward on Oct 20th, 2005 @ 10:16am
for $4 billion they could offer $5 to 800 million non-ebay users rewarding them for signing on to ebay and succesfully selling or buying something. I don't know if they'd make all the money back, but I think they'd make more than they'll get from skype.
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Wait 2 - 5 years by randdickson on Oct 20th, 2005 @ 11:05am
While there's no obvious revenue from this, if done properly it will continue to spread the ebay brand while creating a community that could be exploited for other purposes. You gotta admit, their PayPal purchase has paid off very well. Also, the 4 billion is based on incentives, not a given. It may be a mere 2.6 billion.
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No Subject Given by Alex on Oct 20th, 2005 @ 11:29am
They will make it by volume, is the short message, I understand.
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eBay's Skype Plan: Make Money From Free Calls by flattener on Oct 20th, 2005 @ 12:49pm
Well, the answer is that this is, most likely, just a financial transaction where Skype investors will make money. This is the old trick. Try to trace down the connection between eBay and Skype investors; there must be some connection there, maybe somebody returning the old favor. Haven’t you seen such transaction before? Remember the Internet bubble! This has nothing to do with VoIP and eBay business, unless we collectively admit that we are crazy.
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Why aren't EBay shareholders furious, where's the by Anonymous on Oct 20th, 2005 @ 1:47pm
I realize there is no law against corporate stupidity, but I believe executives in a company have certain responsibilities to their shareholders.
When a business transaction doesn't pass the "sniff" test, you have to wonder why the shareholders aren't raising holy hell, and similarly, why the SEC isn't involved to make sure there isn't something more sinister going on.
I honestly don't understand why any investor would have confidence in the American financial markets these days.
Vaguely accurate valuations of companies? Nope.
All investors on a reasonably even field information wise? Nope.
Transparency for external investigation of misconduct? Nope; trust the SEC!
Etc.
Don't expect to see much press on how corrupt the markets are. Those same reporters have investments to protect.
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Re: Why aren't EBay shareholders furious, where's by Anonymous Coward on Oct 21st, 2005 @ 6:18am
Any Ebay shareholders who are furious have sold. Those that aren't haven't. Just becuase YOU are pissed about the transaction doesn't mean everyone thinks that way. You don't have a monopoly on the "right" opinon, you know. In a free country people can put their money where they want, and that includes business you think make stupid decisions.
And if valuations are "correct" in your opinon, that isn't a sign of some vast conspiracy. It's probably a sign that you're wrong.
I, for one, think this was a stupid decision. But I don't own Ebay. So I really don't care what they do. If their shareholders get burned, so what? There is not such thing as a guaranteed investment.
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