By John Oates for The
Register
This article has been reproduced from The Register, with
permission.
Whitman, on a conference call today, made it clear that the
company is not interested in widening its appeal by becoming some
kind of portal. She said eBay had succeeded by being focused and
that was not changing.
But she does see future growth for Skype in three separate
areas.
Firstly, and most obviously, this will be from integrating Skype
onto eBay's auction site. Buyers and sellers send each other five
million emails a day. Anything that can speed up and improve this
communication should have big benefits for eBay. Additionally, most
of the real action on auctions happens in the last few minutes so
getting instant answers from sellers should keep more buyers
interested and keep the bids going up. The only possible downside
to this is that buyer and seller get on so well while chatting on
Skype that they make a sale outwith eBay.
Secondly, eBay wants to cement Skype's premier position in the
Voice over Internet Protocol market. Skype claims 54m registered
users and hopes for 57m by the end of the third quarter. Because it
is a virtual peer-to-peer network this growth costs Skype very
little while simultaneously making the network more
attractive when one person signs up they are likely to bring
friends and family with them to take advantage of free calls. With
Google and others getting into the market and continued pressure
from telcos it makes sense for Skype to find a friend with deep
pockets.
Thirdly, eBay hopes the acquistion of Skype will allow it to do
a better job of making money from some existing markets and move
into different areas. Whitman explained that eBay currently runs on
a transaction fee basis sellers pay a variety of charges on
selling items. But Skype will enable eBay to get into the lead
generation business where sellers of products or services pay a fee
to receive a phone call from an interested punter. According to
Whitman, US firms pay between $2 and $12 for such leads. Sales of
new cars, travel, business services and real estate could all be
helped by lead generation, a market she valued at $3.5bn a
year.
Whitman said Skype would also help in emerging markets such as
India where there may be less faith in ecommerce and more of a
culture of haggling. It could also help cross border trade where
lack of trust is also an issue.
Mark Main, senior researcher at Ovum, told The Reg: "It's a
great deal for Skype but a big gamble for eBay and quite
startling." Main said the price seemed excessive and that it is
unlikely that Skype users will start selling their possessions on
eBay. He also questioned whether real-time voice communication
between buyers and sellers would really be welcome merchants
and power sellers are likely to be too busy for trivial enquiries
and prefer email communications.
More details on eBay here and Skype
here.
© The Register
2005
