The Market

by Carlo Longino




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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  1. identicon
    randdickson, 20 Oct 2005 @ 11:05am

    Wait 2 - 5 years

    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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