Friday, September 16, 2005

Ebay buys Skype

A buddy of mine actually works in the finance group at eBay, so I called him up and asked him why (oh why) they bought Skype. He's new there and referred me to the webcast, which I have not bothered watching, and mentioned something about VoIP being helpful in complicated transactions like buying cars.

I am unconvinced. Firstly, while Skype is assuredly useful in complicated transactions, so is the telephone and I don't see eBay buying AT&T. Moreover, when one thinks of all the potential things VoIP can do, assisting auctions falls near the bottom of the list. And if eBay just wants to be a telco that's fine, but I can't see why someone else couldn't do that better. I have not heard any reason why eBay can wring more value from Skype than anyone else.

If you ask me, I think eBay is spooked by Google's IM service (which includes VoIP, like all other IM clients) so wanted to buy some VoIP too. Both firms seems to be violating the iron law of strategy: profits dissappear as differences vanish. If Google wants to run ads along IM that's fine, but VoIP IM actually reduces this ability. eBay following Google's folly is even more foolish.


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