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Businesses Communications The Almighty Buck The Internet

eBay To Buy Skype For $2.6 Billion 298

Posted by Zonk
from the that's-a-lot-of-voice-communicating dept.
rfunches writes "It's not a rumour anymore. BBC News online reports that eBay will pay 'half the amount in cash and the other half in stocks to create an unparalleled e-commerce and communications engine'." The $2.6 billion purchase would give eBay access to the VoIP market, of which Skype claims it has 2 million users online at any given time. BBC speculates that eBay will use Skype to allow sellers and bidders to communicate via voice; I have also heard that live auctions a la Sothebys might also be a possibility. Also reported at Wall Street Journal (registration), New York Times."
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eBay To Buy Skype For $2.6 Billion

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  • Paypal (Score:5, Funny)

    by Anonymous Coward on Monday September 12, 2005 @07:14AM (#13536756)
    Skype is in for a little surprise if eBay pays with Paypal. Whoops, your account is locked, sorry.
    • Re:Paypal (Score:5, Interesting)

      by DenDave (700621) * on Monday September 12, 2005 @07:45AM (#13536954)
      Hrrmm. would they transfer my skypeout balance to my paypal?

      LOL!

      It's good to see that hot air still sells, dang this is almost like the heady days 97-98!!

      2.6 Billion dollars for what? A client list? A gateway to copper lines?

      Sheesh!
      • Re:Paypal (Score:2, Insightful)

        by junklight (183583)
        this isn't the dot com bubble though we aren't going to make that mistake again. No - this is a new thing - this is the telecommunications bubble.
      • Re:Paypal (Score:3, Interesting)

        by Ravatar (891374)
        A user count of 52 million (+150,000 per day), and more voice minutes than any other Internet voice communications provider? If you were buying into the industry, why would you compete with Skype when you could buy it?
        • oh i'm sure it makes sense to somebody...just not to me.
        • Re:Paypal (Score:5, Insightful)

          by flyingsquid (813711) on Monday September 12, 2005 @10:22AM (#13538076)
          If you were buying into the industry, why would you compete with Skype when you could buy it?

          But why buy into it at all? Skype isn't a natural extension of eBay's business strategy; it's not even related to what they do. It's sorta like Pizza Hut coming out and announcing they're going to buy Lockheed Martin and build fighter jets. The general tone of the NY Times article is bafflement. Generally speaking, businesses do best when they stick to their core business- when they stick to one thing that they know how to do.

    • by Anonymous Coward
      Paypal and eBay tend towards M$ lock-in. A large concern in throwing their hat in with those two would be the risk of marginalizing non-MS platforms.

      Also, remember that Skype is not an open protocol. You cannot write your own client should support for your platform be discontinued.

      • MSN Messenger isn't an open protocol either (The recent matter [slashdot.org] of MS opening up some API's for it and some other of their goodies is good, but doesn't count). This hasn't stopped FOSS implementations [miranda-im.org] of the protocol based on reverse engineering.

        At the moment Skype is a good product with a geek (& Joe Noob) friendly image so there's no incentive to want to create an alternative client. Should Skype drop a platform though, i'm sure atleast some of this enthusiasm for the service would be sucked into open
        • There's lots of incentive.. there's even a bounty to producing an asterisk plugin for it, but because it's end->end encrypted it's just nowhere near as easy as doing it for MSN messenger.. you first have to extract the keys.

          OTOH there's no need for an open skype when SIP is the standard VOIP protocol that works anywhere.
        • Skype works best on Linux, amazingly enough.

          For some reason, Skype on Windows cuts out a lot. On Linux, it's as clear and smooth as if I'm in the same room as the person I'm conversing with.

          Too bad it's proprietary/closed source. At least it's free as in gratis.
  • comments (Score:5, Funny)

    by Anonymous Coward on Monday September 12, 2005 @07:15AM (#13536768)
    A+++++!1111111 would tlak with agin
  • by Seth Finklestein (582901) on Monday September 12, 2005 @07:15AM (#13536770) Journal
    Skype is not built on open standards like SIP and remains isolated to its own so-called "Peer to Peer" network. It is to the Gizmo Project [google.com] as AIM is to Jabber.

    Furthermore, eBay has a history of poor human rights concerns [internalmemos.com] and owns PayPal, probably the worst on-line payment site ever created [paypalsucks.com].

    I predict more consumer-hostile behavior from eBay and will continue to boycott all of its products.
    • by Catcher80 (639611) * <catcher80&gmail,com> on Monday September 12, 2005 @07:33AM (#13536881) Journal
      PayPal, probably the worst on-line payment site ever created.

      As opposed to what? How can you justify this opinion? Worst on-line payment site created, but most used. I can't think of any alternatives, please list some?
      • by airjrdn (681898) on Monday September 12, 2005 @07:38AM (#13536917) Homepage
        BidPay is one. I'm not saying it's better or worse, I'm just saying it's an alternative. There are others as well. I've used a few of them when purchasing things via Ebay, but I don't remember what most of them were.
      • by Anonymous Coward
        You can't think of alternatives? Then it obviously is the worst one ever created. Ok... the same logic suggests it is also the best one ever created.
      • by jdfox (74524) on Monday September 12, 2005 @09:05AM (#13537531)
        WorldPay, FirePay, NETeller, ProtX, BidPay, NoChex, Verisign, SecPay, FastPay, NetBanx, ChronoPay, PPPay, MoneyBookers, ACT eCash, 900Pay, Citadel, etc. etc. [google.com]

        • by alexo (9335)

          > WorldPay, FirePay, NETeller, ProtX, BidPay, NoChex, Verisign, SecPay,
          > FastPay, NetBanx, ChronoPay, PPPay, MoneyBookers, ACT eCash, 900Pay,
          > Citadel, etc. etc.


          But which ones:

          * Work internationally without major headaches.
          (e.g., a transfer of funds between, say, Australia and Canada when both the sender and the receiver work in their native funds)?

          * Allow flexibility in sending and receiving the funds
          (by credit card, debit card, direct link to bank account, etc.)?

          * Have low fees and reasonable con
      • Paypal (Score:4, Interesting)

        by hlh_nospam (178327) <concealedhandgun@nOSPAM.gmail.com> on Monday September 12, 2005 @09:15AM (#13537578) Homepage Journal
        There is nothing wrong with Paypal and eBay that wouldn't be cured in a heartbeat by some credible competition, but I don't see any credible competition at the moment. Auction sites (and similar listing sites) come and go, as do online payment systems. I have a few such sites that I like (e.g., Blujay.com and TheHighBidder.com) from the standpoint of user-friendliness and lower cost, but they can't deliver the traffic like eBay. One alternative for online payments that should definitely be avoided is the latest Ponzi scheme from Damon Westmoreland, called GreenZap. I have some hope for either GooglePay or AliPay (from the B2B site Alibaba.com). I would not mind seeing both competing head-to-head with PayPal. Unfortunately, in the Internet world, there is a tendency for only one company to completely dominate any particular niche -- and #2 is usually way down in the noise.
    • by Itchy Rich (818896) on Monday September 12, 2005 @07:35AM (#13536894)

      Skype is not built on open standards like SIP and remains isolated to its own so-called "Peer to Peer" network. It is to the Gizmo Project as AIM is to Jabber.

      Just because it's proprietary doesn't make it a dead-end. You may as well say that every 'open' project will be huge.

    • by Oscaro (153645)
      It is to the Gizmo Project as AIM is to Jabber.

      BTW, Gizmo uses open standards, but is not open itself (see ahref=http://www.gizmoproject.com/gizmo-end-user.h tmlrel=url2html-22255 [slashdot.org]http://www.gizmoproject.com/g izmo-end-user.html>).

      SIP will (probably) be incorporated into the next gnomeMeeting release.
    • You don't honestly believe that 'internal memo' from ebay is real do you? Seems rather incredible to me - no company is so idiotic as to ban talking at desks at work, and the way it is written is so ridiculous as if the writer was trying to make obvious that its a joke.

      In any case, I don't see what it has to do with 'human rights concerns'.

      Other posters have sufficiently rebutted your claim that PayPal is the 'worst on-line payment site ever created', and your Gizmo plug, so I'll resist from arguing those p
    • by birge (866103) on Monday September 12, 2005 @08:35AM (#13537282) Homepage
      Skype is not built on open standards like SIP and remains isolated to its own so-called "Peer to Peer" network. It is to the Gizmo Project as AIM is to Jabber.

      I don't understand your logic. Why is it the automatic death of something to not be based on an open standard? An open standard is nice in some obvious ways, but I'd take something closed that works well over anything else, open or no.

      Isn't the POTS system closed? Pretty successful, though, no? And AIM, for that matter, is still doing pretty well. Windows? Closed, sucks, AND very successful.

      I think your reports of Skype's imminent demise are premature, given that it's already well recieved and actually quite well designed. I think you may be getting a bit religious-minded about open standards. I probably agree with you that it would be The Right Thing if everything were, but I think you've let the dogma get to you if you think something's going to die just because it isn't based on an open standard. Would that it were the case, though...

      • by fatboy (6851) on Monday September 12, 2005 @09:30AM (#13537672)
        Isn't the POTS system closed?

        No, it is an open standard, regulated by the FCC, 47 CFR 68.3.

        See the FAQ [fcc.gov]

      • Isn't the POTS system closed?
        Is it? I don't think it's a problem to get the specs for it and start manufacturing your own phones, for example. But you can't do it with Skype.
      • Isn't the POTS system closed?
        Nope, International standard.

        AIM
        Anyone still use it? Its been replaced by jabber and Windows Messenger, and I think messenger will die from neglect eventually.

        Windows
        Maybe closed, but has clearly documented APIs like DirectX and evens publishes developer kits.

        If you want to see what openness gets you, look at TCP/IP, SMTP, HTTP and HTML. These are bigger than any closed standard and often started as a lesser competitor to proprietry protocols (DecNet, SNA, X400, Gopher, PDF, D
  • Grrrrreat (Score:5, Funny)

    by Brento (26177) <brento@bre[ ]zar.com ['nto' in gap]> on Monday September 12, 2005 @07:16AM (#13536781) Homepage
    Great, so now instead of people emailing me about my Ebay auctions, they can call me at any time and ask, "How does that there Tivo thing work anyway? Can I watch HBO if I don't have cable? Can you explain it to me?"
  • over $1000/user (Score:5, Interesting)

    by El_Muerte_TDS (592157) <elmuerte AT drunksnipers DOT com> on Monday September 12, 2005 @07:17AM (#13536782) Homepage
    How are they going to earn that back from a "free" VoIP service?
    • by MarkRose (820682) on Monday September 12, 2005 @07:19AM (#13536803) Homepage
      You must be new to the Internet -- that doesn't matter.
      • And you must be new to ebay if you think it isn't profit-oriented. They're greedy suckers.

        The question isn't whether ebay will try to make a profit from Skype, but whether Skype will still be worth anything to users when ebay is done with it.

    • Re:over $1000/user (Score:5, Informative)

      by antiaktiv (848995) on Monday September 12, 2005 @07:26AM (#13536841)
      they haven't bought the users, they've bought the name skype. how many times in the past year have you heard (not read) people using that name, and how great it is? i don't spend a lot of time with computer people, and everywhere it's skype-this, skype-that. 2.6 billion isn't that much for the kind of growth this business will see. last year skype made 7 million dollars. next two years it's projected at 60 and 200 million. 150000 new users daily.
    • by Anonymous Coward on Monday September 12, 2005 @07:27AM (#13536852)
      It's quite simple:

      1 ringy-dingy
      2 ringy-dingy
      "Hello, this is eBay calling to tell you about some fantastic purchasing opportunities available exclusively to our Skype customers.

      "Yes, sir, I understand that you're eating dinner. No, sir, we do not have a no-call list, as we are not governed by-

      "Now, sir, there's no need to be rude. I'll let you get back to dinner.

      "... and call you back in five minutes. Every five minutes. Until you die."
    • How are they going to earn that back from a "free" VoIP service?

      Especially when Microsoft decides to beef up their voice chat in MSN. I fear that Skype will go the way of ICQ when that happens...
      • Re:over $1000/user (Score:4, Insightful)

        by trezor (555230) on Monday September 12, 2005 @07:38AM (#13536920) Homepage

        I fear that Skype will go the way of ICQ when that happens...

        To be honest ICQ went the way of ICQ when ICQ decided to become a big, fat bloated pig that took half a minute to boot.

        And MSN (until recent versions anyway) remained quick and functional. ICQ went down because ICQ went the way of WinAmp 3. No need to blame MS on this.

        • Re:over $1000/user (Score:2, Interesting)

          by bheer (633842)
          MSN (after a round with the Preferences dialog) _remains_ quick and functional, and the latest version (7.5) has kickass PC-to-PC voice, so much so that Skype is actually catching up with it's 1.4 Beta. Now factor in PC-to-phone voice from MS' Teleo acquisition, and it's easy to figure out why Skype, after months of "we're in this for the long haul, not to sell out" is finally selling out -- to an _auctions_ company.

          Skype is toast. You heard it here first.
          • MSN still lacks one important feature: offline messaging. I've introduced a few people to Jabber who used MSN exclusively before that, and they were quite surprised that such a thing even exists, and then learnt to use and love it soon afterwards.
        • And MSN (until recent versions anyway) remained quick and functional. ICQ went down because ICQ went the way of WinAmp 3. No need to blame MS on this.

          That sounds reasonable, and I'll gladly admit that ICQ made things easier for the competition, but I remain sceptical. ICQ had the network effect on their side, yet people still switched to MSN (back then still Windows Messenger IIRC). Besides, MSN is now just as bloated as ICQ was, yet people still stick to it, even though there are plenty of quick and functi
    • Re:over $1000/user (Score:5, Informative)

      by 42sd (557362) on Monday September 12, 2005 @07:32AM (#13536877)
      It's only free if you do Skype to Skype calling or call 800 numbers.

      It's about 2 cents a minute for outbound calls in the US. This is called SkypeOut.

      And in order to get an real phone number, you have to pay for SkypeIn, which looks like it is going to cost about $60 a year, though its still in beta.

      So, if you make 500 minutes of calls, its slightly more expensive than the Vonage SoftPhone.

      If they made it a flat rate for unlimited calls, I'd buy it in a second.

    • That's what I thought at first, but they claimed they have 2 million users online in any given time, not total. The total is 50-60 million, so that kind of explains things.
    • Re:over $1000/user (Score:2, Informative)

      by ScuxxletButt (758085)
      How are they going to earn that back from a "free" VoIP service?

      By charging for extras.

      I have a number in the US, one in Finland, and one in Sweden. Plus I use it to call out to people with cell phones and land lines all over the US, Asia, and Europe.

      I pay for these extras, but it is so worth it.

      Maybe next time you should educate youself on a company's business model before you trash it.
  • More spam calls (Score:5, Insightful)

    by zrq (794138) on Monday September 12, 2005 @07:17AM (#13536787) Journal

    From the article :
    .... eBay is also attracted by the idea of letting its buyers and sellers talk to each other via their computers ...

    Personally, I'm not sure that I would want eBay buyers and sellers to contact me by voice. For a start, it means that to buy or sell effectively, you would need to be online a lot of the time.
    Plus, once they have your Skype address, it would open up the system to SPAM voice calls pestering you to buy more things that you don't want or need.

    • Re:More spam calls (Score:5, Insightful)

      by Brento (26177) <brento@bre[ ]zar.com ['nto' in gap]> on Monday September 12, 2005 @07:21AM (#13536813) Homepage
      For a start, it means that to buy or sell effectively, you would need to be online a lot of the time.

      I've only done around a hundred auctions, but my experience has been that the questions come 18-24 hours before the auction ends. People looking much earlier than that tend to know exactly what they're looking for and don't ask many questions. People looking later than that are grabbing the first thing they see. People in that 18-24 hour time range, though, seem to ask lots of questions trying to figure out whether or not they should bid.

      And of course, these people don't even end up winning the auctions. They're the ones who are new to Ebay, don't understand the concept of sniping, think that they're really going to get a Tivo for the $1 opening bid, and even still, they want to ask questions first about the item.
    • Re:More spam calls (Score:2, Interesting)

      by Sasquatchtree (626022)
      From the article : .... eBay is also attracted by the idea of letting its buyers and sellers talk to each other via their computers ... This whole time I was really hoping to see what google was going to do with this technology with the rumors around the buyout. http://slashdot.org/article.pl?sid=05/08/24/121625 8&from=rss [slashdot.org]
  • Wow (Score:5, Funny)

    by squiggleslash (241428) * on Monday September 12, 2005 @07:17AM (#13536789) Homepage Journal
    Does this mean you'll be able to communicate with eBay and PayPal "customer service" [blazemonger.com] by phone?

    Maybe not...

    • by grazzy (56382)
      I actually called Paypal support from Sweden. It was quite a experience.

      I quickly learnt why you guys over there are so anti everything-support. If that is what is to come even here I'm sure swedes will start having office-shootings soon too.
  • Here we go again (Score:4, Insightful)

    by pcgamez (40751) on Monday September 12, 2005 @07:18AM (#13536793)
    Yet another company purchasing another completely unrelated company simply because they feel the need to dump their cash somewhere. In te end, one company always ends up dragging the other down.
    • but at least they're paying with a telephone number(2-600-000-000)!
    • by caffeinex36 (608768)
      Not sure why this is modded insightful when it is a totally brainless comment with no backing.

      give us some examples? I'm sure there are some, but what is the reasoning behind it?

      in business this is whats called venturing into vertical markets. It's sometimes GOOD for business. Ebay is a good example. Although people may disagree because its cool to hate paypal, but look at ebay and paypal? completely vertical markets, and it works.

      • Re:Here we go again (Score:4, Interesting)

        by TobascoKid (82629) on Monday September 12, 2005 @08:01AM (#13537068) Homepage
        Although people may disagree because its cool to hate paypal, but look at ebay and paypal? completely vertical markets,

        Not really, as paypal's main reason for existence is paying for online auctions (ie eBay). Sure, paypal has some use beyond that, but you could at least see a link between paypal and ebay.

        It's a lot harder to see what Skype has to do with online auctions. What's next, eBay search?
        eBay mail(especially as they already have an email like function in my ebay)? ebay news & weather? Maybe it is like others have said and that the link is with PayPal's micropayment system than eBay.
      • Re:Here we go again (Score:5, Interesting)

        by afabbro (33948) on Monday September 12, 2005 @09:24AM (#13537634) Homepage
        He's right - this is a pretty sketchy idea. I polled my MBA classmates and every one of them was saying WTF.

        You want examples? The whole "diworsification" trend of the 70s and 80s. GM bought a satellite company (Hughes) and a data processing firm (EDS), for instance. See how well that worked out for them. The idea was that they'd use these businesses to ride out the slumps in the economic cycle...in reality, all it did was divert management's attention from their core business.

        All of the derived wisdom in business is that you find what your company is great at and put everything behind it. Read Good to Great.

        eBay buying Paypal makes sense because there are obvious synergies - you buy something on eBay and pay for it with Paypal (and Paypal was also profitable). Sometimes big acquisitions make sense - Oracle buying Peoplesoft and Seibel, or Ford buying Hertz (though after 15+ years they're now ditching it). Sometimes the deals are more of a stretch...e.g., FedEx/Kinko's and UPS/Mailboxes are both based on a very specific strategy and set of assumptions.

        eBay buying Skype makes zero sense to me. If eBay had bought Christie's or Sotheby's, I might understand...but buying Skype is (a) reaching waaaay over to a completely different market where the synergies are very speculative, and (b) investing in an unproven, unprofitable venture with a LOT of cash, reminiscent of the dot-com days.

    • That's how companies grow. Well, no, they can expand their core business, but ebay has the online auction market pretty much sewn up. For some reason it's not good enough for shareholders for the company to be turning a profit, they have to be seen to be expanding.
    • I agree. Skype worked well and was reasonable it it's terms. I can only see ebay screwing it up. Time to start looking for another VOIP provider. Fortunately, I (and other users) are not locked in and it will be easy to switch when they start messing it up.
  • by laurensv (601085) on Monday September 12, 2005 @07:18AM (#13536796) Homepage
    One of the reasons eBay has is that they can use Skype to let buyers and sellers talk to each other; but my eBay name and Skype name aren't the same. If some contacts buyer/seller through Skype with eBay screenname as Skype name, they're is going to be some potential for social engineering.
  • Skype (Score:2, Funny)

    by Trick Kid (894724)
    Clearly eBay should be made to bid for it ;-)
  • by Rik Sweeney (471717) on Monday September 12, 2005 @07:19AM (#13536804) Homepage
  • what a stretch (Score:4, Insightful)

    by idlake (850372) on Monday September 12, 2005 @07:21AM (#13536810)
    BBC speculates that eBay will use Skype to allow sellers and bidders to communicate via voice;

    They can do that already, for free, using any of the IM and VoIP solutions that are out there. eBay didn't have to buy Skype for that. I suspect most sellers just don't want to be bothered, otherwise they'd list an IM address and phone number.

    I'm not even sure why Skype is considered so valuable; the technology is commonplace, and VoIP-to-POTS gateways are offered by many companies. And between the Telcos and Microsoft, any competitor is going to be squashed.
    • Re:what a stretch (Score:5, Insightful)

      by DingerX (847589) on Monday September 12, 2005 @07:32AM (#13536874) Journal
      Alright -- first off, Ebay's gotta be out of their mind if they think Skype can somehow help as a "Convergent" technology. It probably can't. Just glance through this -- VoIP auctions combine the best of all worlds: the incomprehensibility of people who don't share a native tongue, the time constraints of a live auction, and the anonymity and uncertainty of the internet.

      So why buy skype? Why shell out 1.3 billion bucks for a piece of software, especially one so commonplace as Skype?

      Skype is a great piece of software, but no doubt better can be made. But Skype has other things going for it: A) It's got reasonably secure encryption -- unlike practically every other chat and VoIP client out there. B) It's great at getting around firewalls C) As decentralized as it is, it requires minimal resources -- it hits one IP in Denmark and it's on its way. D) It has 40+ million users, of which 3 million are online at any given time, and the numbers are growing.

      So skype delivers a lot of regular users at minimal cost. Heck, you don't even need to run adds on the Skype client itself, if you control the help, community and download pages. Controlling the #1 PC-to-PC VoIP client out there gives access to all kinds of non-obvious revenue streams, very few of which have anything to do with auctions.
      • How do we know? Has anyone done a serious test of it? They claim AES-256, but how do we know?

        As to the decentralization, if that one sever in Denmark goes down, so does the entire network (since no one will be able to log on.)

        It is the best solution if you have to be able to get through firewalls and NAT.

  • by pkboy (864629) on Monday September 12, 2005 @07:21AM (#13536811)
    Paypal's Micropayments [shareholder.com] and Skype? Probably convenient for quick overseas calls to POTS lines...
  • Yet another up-and-coming technology bought out by corporate mammoths.

    I remember when even eBay was a fledgling company, trying to find it's market.
  • by TA (14109) on Monday September 12, 2005 @07:29AM (#13536864)
    With a large US company owning Skype I think we can take for granted that getting SkypeIn sorted out with the telecomm authorities of smaller, European countries will simply not happen. I expect Skype will now grow much more US-oriented than before - I simply can't imagine why Ebay would bother with, or even understand those Euro-centric problems.

    Time to start looking seriously at the existing competition, small as it is.
    • I simply can't imagine why Ebay would bother with, or even understand those Euro-centric problems.

      I don't know in what tiny European country you live, but mine has its own ebay [www.ebay.nl]. If they think that that particular market is lucrative enough for them, even though there is plenty [marktplaats.nl] of [autoscout24.nl] competition [speurders.nl], then I'm sure that they consider the telecom market lucrative enough too.

      In short: I wouldn't start worrying just yet :-)
      • Marktplaats is no competition for them anymore as they also bought that one..
        probably because it was too popular and some things are sold on marktplaats and are hardly offered on ebay.nl
    • by peterzen (8588)
      I've been flirting for a while with switching to Gizmo Project [gizmoproject.com]. Now there's a good reason to do it even if one has to persuade their contacts to make the switch too.

      http://www.gizmoproject.com/ [gizmoproject.com])
  • Great, another useful tool brought down to its knees by a company with a need to buy something 'sexy' without an intelligent business plan. Thank you eBay! Ugh....
  • by Anonymous Coward
    "EBay plans initially to pay $1.3 billion in cash and $1.3 billion in stock and to make a further payout of up to $1.5 billion by 2008 or 2009 if financial targets are met, giving the deal a total value of up to $4.1 billion, the source said."

    Here, check this out:
    http://today.reuters.com/news/newsarticle.aspx?typ e=technologyNews&summit=&storyid=2005-09-12T081656 Z_01_HO227963_RTRIDST_0_TECH-SKYPE-EBAY-DC.XML [reuters.com]
  • ... as it is does not use the accepted SIP VOIP standard, nor does it interoperate with other VOIP providers.

    Get yourself a real VOIP provider that uses SIP.
  • by Anonymous Coward
    What a bizarre combination, auctions and VoIP telephony. I can't but help think that this is part of the current fad of big net companies buying up the small-but-cool app stuff?

    I mean you can see where Google's going with their purchases, but Yahoo with Konfabulator and eBay with Skype seem to be pointing in a new direction of desktop application acquisition.
  • For that kind of cash, eBay could have developed an in-house solution at a fraction of the price. Oh well, time to raise the Buyer's and Seller's rates on eBay, again...
    • It's Skype's customer base that eBay is after, not it's software.
      • Perhaps, but eBay could have simply integrated a new Skype-like eBay product on eBay/PayPayl and drawn some of Skype's customers and created new customers. Ideally the simplicity of the integrated product would have drawn Skype's existing customers at a fraction of the cost. Either way, being a cash/stock deal, the out-of-pocket cash price to purchase the customers is only about half of what other /. posters suggest [~$650/user] and reasonable to purchase an existing customer base and eliminate the compet
  • by jcr (53032) <jcr.mac@com> on Monday September 12, 2005 @07:43AM (#13536943) Journal
    I think I need to buy some puts on E-Bay.

    -jcr

  • by CousinLarry (640750) on Monday September 12, 2005 @07:51AM (#13536993)
    I think the main parallel to find in comparing the recent tech acquisition spree to that of 1999/2000 is that companies are applying the "buy now figure it out later" synergy strategy again. I think a lot of these companies are seeing a vague future for themselves as desktop application providers in Web X.0 -- but they are scrambling in a land grab on search, voip, mobile...I mean, when Google buys something as fad-ish as dodgeball.com [dodgeball.com] and ebay gets into voip, to me it signals speculation and hedging on these companies' parts. They have no clue what will work and what will not -- and eBay shareholders should be upset that eBay is gambling billions on speculative technologies.

  • by RyoShin (610051) <tukaro.gmail@com> on Monday September 12, 2005 @07:54AM (#13537019) Homepage Journal
    Google has been known lately for snatching up many things that have become rather popular.

    eBay, for the most part, has stayed under the radar (at least, as far as corporate purchases are concerned.) However, even before they started buying things, they already had their hand in every consumer goods market with the U.S. and every other country (though not directly.)

    Then they bought PayPal (what, a year ago?). This transaction made plenty of sense, as PayPal was used to pay for many of the auctions on eBay.

    But now that eBay is getting Skype, are we seeing a clever purchase or the beginning of a buy-frenzy? This layman cannot see an overall connection between Skype and eBay/PayPal (aside from being general commerace tools); but that doesn't mean they can't buy Skype. And if they purchase Skype, what might they put their grubby mitts on next?
  • Yeah, because when i think communications that don't suck I think of e-Bay. This from the company that isn't a bank, isn't an auction company, and now isn't a phone company ... or at least that's what the regulators will be told.

    E-Bay's use of communications suck all of their products and services are closed products, Skype is no different in that respect, but I see no way that this will improve their buisness. I really can't wait to get back to the closed days of compuserve 195782,1124!
  • what currency? (Score:3, Insightful)

    by Anonymous Coward on Monday September 12, 2005 @08:28AM (#13537228)
    2.6 billion..

    thats in Yen right?

    seriously why dont ebay hire some people to make a SIP compliant client + service...

    the only reason why skype is doing well at the moment is because SIP hasn't taken of yet...
  • by OpenYourEyes (563714) on Monday September 12, 2005 @08:28AM (#13537231)
    I suspect that part of the confusion is that we think of ebay as an acution company, just like we used to think of google as a search company or Microsoft as a PC OS company.

    It sounds to me like ebay is trying to transform itself into a "business solutions provider" company. Starting a small business? Sell your stuff using ebay with "buy it now". Want to accept credit cards and do other business banking? We can do that. Want to offer a toll-free (or non-toll-free) number to your customers? We can do that, too.

    I would not be overly surprised if they went after Quicken or a competitor next. Possibly even a shipping or storage company, too (but less likely since those aren't virtual).

  • by tabdelgawad (590061) on Monday September 12, 2005 @08:29AM (#13537237)
    This is not about integrating VOIP into eBay's auction business. It's about large tech companies scrambling to get a share of the predicted-to-boom VOIP market.

    Just recently, Microsoft purchased Teleo, which will allow MSN messenger users to make PC-to-Phone calls. Yahoo purchased Dialpad, which has similar capabilities to Skype (PC-to-PC and PC-to-Phone). And of course Google introduced Google talk, which is the first step in the process. eBay just doesn't want to be left out.

    This is not really my insight. See for example:

    http://news.ft.com/cms/s/d1218d8c-2097-11da-81ef-0 0000e2511c8.html [ft.com]
  • by donnacha (161610) on Monday September 12, 2005 @08:37AM (#13537312) Homepage

    Ebay's interest in Skype has nothing to do with augmenting their auctions with calls between buyers and sellers. This is about taking those (alleged) 50 million non-paying Skypers and giving them an easy, more attractive way of paying for individual calls rather then stumping up $5. Pretty much everyone has a Paypal account and this sort of tie-up would get them using both Paypal and Skype more, with people more willing to leave cash sitting in their Paypal accounts because "I might need it for calls". This would consolidate Paypal's dominant position, something Ebay are probably anxious to do in the wake of rumours of a Google e-payment service - most people will only really bother with one payment service and, if it covers their phone calls too, sticking with Paypal will be a no-brainer.

    The real killer argument for the Paypal/Skype tie-up is, however, the possibilities it opens up for a whole new generation of premium phone services and the recent repositioning of PayPal, missed by many, strongly suggests that Whitman et al realize this - after years of holding back the whole idea of micro-payments, they finally decided to granularize Paypal's fee scale, making smaller transactions viable. Before, you had to pay 30c + 3% of every transaction, leaving you with 67c from a dollar sale. Now, they are willing to take 5c + 5% instead, leaving you with 90c.

    This is huge news because it makes viable a whole new layer of services. I don't think the timing of that introduction is a coincidence. I believe that Paypal are preparing the ground so that anyone who wants to set up a premium number can do so via Skype - if someone fancies themselves as a fortune teller, a Windows guru, a phone psychologist, a language translator, anything at all that can be conveyed over the phone, Skype will allow them to receive calls for which they can charge whatever they want per minute, taken directly from the customers Paypal account.

    The rakes that the traditional telcos cream from premium calls are obscene, resulting in unattractive overall rates, crippling a potentially huge homebrew industry before it even began. Seriously, how many of you regularly turn to premium phone-lines when you have a problem? I can definitely understand how talking to another human being, one expert at tackling my particular problem, could be useful - the current cost, however, takes that option right out of contention. Generally, too, a premium service can only serve one country, barely giving it room to breathe market-wise.

    A Skype/Paypal solution would be international, meaning a techie in Bombay could build a reputation for solving computer problems for customers in Baltimore, more easily than getting the kid down the road to drop by and certainly more cheaply than phoning Compuworld or Apple. It would also allow that kid in Bombay to keep a meaningful percentage of his per-minute fee, allowing him to keep it low. You would soon have a massive market of providers, ranging from amateurs to highly experienced professionals, all promoting their services via websites and forums, all adapting their charges and services to market conditions. By building the charging mechanism right into Skype, Paypal would find itself sitting happily in the middle of a new explosion of cash transactions.

    Just like Ebay did.


    • A Skype/Paypal solution would be international, [...]

      I don't know about that - here in Germany, premium phone services are heavily regulated (why? I don't really know; I guess just too many crooks abused them and found too many fools to pay them).

      I assume Germany is not the only country in the world where this is the case.

      But for the US and other less regulated economies, your idea sounds feasible.
    • I think you have the most insightful comment I have read so far, and the most plausible explanation for this purchase. That really does sound like a completely untapped market possibility. Who wouldn't want to be known as an expert in their niche field? Combine all the user ratings and feedback that eBay uses so that callers can rate these experts ..... well the more I think about it, the more sense it makes! It will be interesting to see what actually shakes out in the next few months, and to see if an
  • And yet another useful, cheap, user-friendly technology is ripped away by a corporate Godzilla. eBay is as bad as they come when it comes to your rights and convenience (they jump through hoops to avoid any responsibility and liability), and are among the more notorious spammers out there. Can unsolicited cold calling via Skype be far behind? Still waiting for Google's PayPal alternative...
  • If eBay requires Paypal to pay for my Skype service, I'll be finding another VOIP provider. I've done everything I can to avoid the nastyness that Paypal is.

    Chip H.
  • These guys sure know how to create something, make it successful, and then sell it. They've done it before. [slashdot.org]

    Let's hope Skype doesn't go the way of Kazaa :)

  • by harshaw (3140) on Monday September 12, 2005 @10:07AM (#13537951)
    Skype works behind firewalls because it can relay calls off another node that is *not* behind a firewall. If corporate goon A calls corporate goon B where both are behind a firewall, the call is going to be routed through a *random* box on the internet. It could be a PC in a college residential network or some dude's box in kerplexistan. While this solution does work it has a number of problems:

    1) If the number of machines without firewalls starts to fall dramatically skype users are SOL. This could happen if most PC's have an automatic firewall enabled or broadband providers start shipping modems with built in firewalls.
    2) I don't know about you but it's a bit odd routing my voice traffic through non authenticated computers - encryption be damned.
    3) Routing around firewalls provides a *good* calling experience but not reliable. Skype calls can drop on you randomly. You also can have trouble connecting when you want to call. While skype is great for people who want high quality calls that work most of the time, it isn't really great when you try on rely on it.

    I use skype and think it is a great product... but I don't quite understand how it people think it is worth so much money as a company.

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