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Failures

by Mike Masnick

Fri, Jun 5th 2009 6:00am




Filed Under:
auction, synergies, voice

Companies:
ebay, skype


eBay Finally Realizes That No One Is Interested In Voice Communication With Others During An Online Auction

from the about-time dept

When eBay first bought Skype we were among the many, many, many people left scratching their heads wondering where the supposed "synergies" were. We were told two things. First, that Skype had many users in China who would now suddenly start using eBay for auctions. Why? No one knows. In reality it had almost no effect. Just because you make calls via a software program it doesn't make you any more interested in doing online auctions through its parent company, apparently. Second, it would now allow buyers and sellers to communicate by voice. But why would they want to? Sure, maybe in a very rare case it might be helpful, but one of the advantages of an online auction system like eBay is that you don't need to actually talk to the other party. And if it was that important to talk, the buyer and seller could just agree to use Skype on their own without eBay spending billions. And, in fact, studies showed that this "feature" wasn't wanted by most eBay users.

But, still, in an effort to show that there really (no, really, really!) were some synergies, eBay integrated Skype into online auctions. Of course, now that eBay has finally admitted that there really were no synergies, taken a huge writedown on the investment and is looking to spin off Skype, the company is finally removing the integrated Skype buttons on auctions, and are even admitting that the company is involved "in an effort to remove features with limited buyer and seller usage." Was it really that hard to recognize how little synergies there were before spending multiple billions of dollars?

16 Comments | Leave a Comment

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  1.  
    icon
    Tgeigs (profile), Jun 5th, 2009 @ 6:45am

    Question

    Are the guys that sold Skype to Ebay invested in the integration as well, or was it a sell and run situation? I can see the old Skype boys sipping martinis poolside at the Luxor, talking about the time they sold a ketchup popsicle to a woman in white gloves.

     

    [ reply to this | link to this | view in thread ]

  2.  
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    Ima Fish (profile), Jun 5th, 2009 @ 6:59am

    "studies showed that this "feature" wasn't wanted by most eBay users"

    I'd guess that most eBay sellers despised it.

     

    [ reply to this | link to this | view in thread ]

  3.  
    identicon
    Anonymous Coward, Jun 5th, 2009 @ 7:14am

    Ebay has been working overtime to screw up their interface and desireability. Originally they had a nice simple system - ala Craigslist...Google but they couldn't leave it alone. Now their Motors search engine is half as useful as it used to be - cluttered with ads - if search doesn't fins what you want it pops up pages of things you have no interest in from other categories because...well..I have no I idea why...forcing the use of PayPal...

    Large numbers of us are imploring the gods for a competitor to Ebay.

     

    [ reply to this | link to this | view in thread ]

  4.  
    icon
    zaven (profile), Jun 5th, 2009 @ 7:19am

    Re: Question

    Sell and run was I believe how it worked. There are currently rumors that the original developers are in talks to buy it back at a significantly lower price.

     

    [ reply to this | link to this | view in thread ]

  5.  
    icon
    Tgeigs (profile), Jun 5th, 2009 @ 7:42am

    Re: Re: Question

    So the woman wasn't happy that her gloves got red popsicle on them, so she's going to give it back to the sellers at a loss? In other words, they got free money? I don't see anything indicating that the Skype brand name took a hit. What an epic sale!

     

    [ reply to this | link to this | view in thread ]

  6.  
    identicon
    Anonymous Coward, Jun 5th, 2009 @ 7:57am

    Skype got more than it's 15 minutes already. It won't be long before they spin it off into another company and sell it off for peanuts. That has got to be a drain on the bottom line to operate.

     

    [ reply to this | link to this | view in thread ]

  7.  
    icon
    Ima Fish (profile), Jun 5th, 2009 @ 8:02am

    Re:

    Skype is useful. My immediate and extended family lives all over the country. We never call each other with land lines or cell phones. Skype is all we need and it's free. It's saved us a fortune.

    The problem with Skype is monetizing it. But that's not my problem.

     

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  8.  
    identicon
    Anonymous Coward, Jun 5th, 2009 @ 8:32am

    Re: Re:

    It isn't free! Skype is no cost to you, but it isn't free. Someone is paying for the bandwidth to make it go, you just aren't seeing the bill directly (but those people who's phone you subsidize by leaving your internet connection on thank you).

     

    [ reply to this | link to this | view in thread ]

  9.  
    identicon
    Anonymous Coward, Jun 5th, 2009 @ 9:35am

    This idea was stupid to begin with. The beauty of an online auction site is the ability of both buyers and sellers to interact at their leisure and then walk away. What seller in their right mind would sit in front of their computer all day, waiting for somebody to chat in real time about the seller's auction listings? The two concepts simply do not mix.

     

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  10.  
    identicon
    Anonymous Coward, Jun 5th, 2009 @ 10:01am

    Re: Re:

    No one said Skype wasn't useful, just not for online auctions.

    One of the consultants we use, parent has mandated all of them use skype when communicating with anyone at the home office. They can only use cell phones when their not connected to their VPN.

     

    [ reply to this | link to this | view in thread ]

  11.  
    identicon
    cram, Jun 5th, 2009 @ 11:43am

    Re: Re:

    "The problem with Skype is monetizing it. But that's not my problem."

    The guys now running Skype probably don't read Techdirt. Don't they know that they should give away the infinite goods and charge for scarcities?

    Perhaps they should try selling T-shirts.

    Youtube faces a similar problem. Everyone loves it, no one cares how Google monetizes it.

     

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  12.  
    identicon
    Anonymous Coward, Jun 5th, 2009 @ 3:05pm

    Re: Re: Re:

    "my other t-shirt is for sale on ebay"

     

    [ reply to this | link to this | view in thread ]

  13.  
    identicon
    Lawrence D'Oliveiro, Jun 5th, 2009 @ 4:26pm

    Skype In Trouble

    You know the company is heading for the wall when, after years of going its own proprietary way, it suddenly gets interoperability religion. When it was dominant, it didn’t have to care about interoperating with others. But now that open-standard SIP providers are proliferating—and interoperating with each other—Skype is starting to feel a little outnumbered.

     

    [ reply to this | link to this | view in thread ]

  14.  
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    Derek Kerton (profile), Jun 5th, 2009 @ 4:54pm

    Re: Re: Re:

    Why do you think this guy doesn't pay for his bandwidth?

    What do you mean he doesn't see the bill directly? I'm pretty sure Verizon, or ATT, or Cox, or whichever ISP he uses sends him a bill every single month.

     

    [ reply to this | link to this | view in thread ]

  15.  
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    Derek Kerton (profile), Jun 5th, 2009 @ 4:57pm

    Re: Re:

    Nobody said Skype wasn't useful. Not now, nor back when eBay bought it. But we at Techdirt said it was way overvalued, and that it was not useful on eBay auctions.

    Skype on its own is very useful to people.

    And Skype may have monetization problems, but not as big as many other companies (Twitter, Facebook, MySpace, etc). Skype upsells premium services, SkypeOut, Voicemail, etc. They DO make revenues and those revenues are growing. It is a very successful business...so long as you didn't spend $4 Billion to buy it. That kinda makes it hard to be profitable.

     

    [ reply to this | link to this | view in thread ]

  16.  
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    Scot Trodick (profile), Jun 17th, 2009 @ 9:21am

    eBay decisions and Skype

    eBay needs to make some smart decisions. Yes, they will presevere, but who knows for how long. Is the current business model appropriate. Buying Skype seemed like a mad dash for recognition of a current business model in hopes that it will integrate seamlessly with their current needs or so believed needs. IMHO, Instead of achieving this, they have darkened the water. It's similar to when they started selling new items on ebay. eBay started as being known for used items. How do you break the branding of "old" and start selling "new". If eBay is going to branch out its business in this manner they should do it as separate branches of the business. It's true, they have done this by leaving Skype as Skype. But what was the goal? Buy a company because they "think" the service it provides is needed for their current business? Who do they buy next? A credit card company? Oh, wait, they did that with Paypal. That was definitely a smart move although I've read a lot of interesting stories about Paypal transactions.

     

    [ reply to this | link to this | view in thread ]


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