| | eBay-Skype: The blogosphere speaks
"The acquisition turns the entire telecom industry picture on its head"
By Jennifer Guevin
Published: Tuesday 13 September 2005
On news of eBay's acquisition of VoIP provider Skype on Monday, "Skype" and "eBay Skype" shot onto Technorati's list of the 10 most searched-for subjects - as bloggers speculated on what was behind the move, and how the ecommerce giant plans to use Skype's communications technology.
But while everyone seemed to have something to say about the buy, opinions about why eBay chose Skype and whether it was a good move ranged far and wide.
In his blog on tech and telecommunications, Mark Evans wrote, "Part of it has to be defensive. It has become increasingly obvious the web will be dominated by a handful of large companies. The key consideration is traffic...
"Today, the strong growth of the advertising and ecommerce markets means traffic is big business. Skype brings more than 52 million registered users to eBay and two million paying customers. With this database, eBay can cross-sell its other services and, at the same time, generate new revenue from voice services as Skype moves into the mainstream."
Only a few days before the announcement, Oliver Starr doubted the soundness of the then-rumoured buy. "eBay is an auction company; a transactional specialist to be sure but a telco? This is a very different and highly competitive business; and not the one the company essentially invented," Starr wrote. "[There is] a huge amount of uncertainty as to whether... users that are so happy with the free services that Skype provides are willing to pony up hard earned cash to let a company like eBay monetise them."
But as news developed on Monday and bloggers found the acquisition was a done deal, talk moved from "why?" to "what now?".
Some view the acquisition as a groundbreaking deal that will have far-reaching implications for the telecommunications industry. In his blog, Jeff Pulver wrote, "I suspect that historians might come to recognise today's announced acquisition of Skype by eBay, as one of the great indicators of the historic transformation in communications...
"The acquisition turns the entire telecom industry picture on its head, and demonstrates that voice, presence, text messaging and other IP-based applications will be essential for the company of the future."
Ian Fogg of Jupiter Research agreed that telecommunications giants will take note of the acquisition but he said they'll have an entirely different reaction. In Jupiter's Analyst Weblogs, he wrote: "Telecom firms may breathe a sigh of relief that this deal is final confirmation that Skype is not a telephony business and therefore not a threat.
"The thinking would go as follows: the eBay acquisition will deflect Skype from a straight voice communication and telephony play. Skype's road-map focus will change to value added features that support eBay's model rather than a feature set evolution that impinges on traditional telephony."
The deal also has the blogging community's mental wheels turning as to what the joined company will mean for the consumer. Bringing Skype's communications technology to eBay creates the potential for new services and could fundamentally change the way people use the auction site.
The Social Customer Manifesto said, "It's an opportunity to extend eBay communities to the desktop... Integration of eBay Groups with Skype makes these communities much easier to join, and greatly increases the possibility of interactions between the group members [all of which eBay can monetise]."
The Skype Journal, a blog devoted entirely to the company, predicts the acquisition could invert the eBay model, with Skype technology allowing eBay to match up auctioneers with interested buyers: "Skype down the road will enable eBay to aggregate consumer demand and auction it in the same way they currently auction consumer goods."
Over at TMCnet, Greg Galatzine was sceptical about the merits of the deal but he related the argument a former colleague made to him: "He reminded me that '... eBay also owns 25 per cent of craigslist; imagine the social-networking prospects if every posting on craigslist had a VoIP call button!'"
But not everyone sees the benefits of eBay's acquisition. In a podcast with Erik Lagerway, ex-TechTVer and Lockergnome creator Chris Pirillo argued that any new communications technology that eBay - or any other major online giant - may spearhead is only going to make a significant change to the industry if it is open and standardised. One more proprietary communications tool to add to the increasing pile is nothing to celebrate, according to Pirillo.
Whatever the fallout of this acquisition, the blogging community will be watching, analysing and writing, with an eye to what the move will mean for consumers and telecommunications giants and how it will affect the way communication happens online.
Jennifer Guevin writes for CNET News.com
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