Tuesday, September 13, 2005

Shaky rationale for Skype offer from eBay

EBay buying Skype doesn't convince me. Especially the main part: there may be a role for voice communications in the buying/selling process, but I don't see that as a huge opportunity (unlike PayPal: there's always a payment to be done). From the Skype point of view, this is an entirely new line of business, and it remains to be seen how this can be monetized.

Moreover, the existing business, which will be maintained by eBay, is essentially a free business. VoIP is an application, it is supposed to be free; customers pay a flat monthly fee for their always-on broadband connection. Paid services are secondary and carry small margins, especially SkypeOut. Hopefully eBay realises this and respects this culture, unlike its own that it harassed early in 2005 with a relatively steep price rise.

The PayPal part of the rationale looks OK: Skype users will be easily persuaded into using PayPal.

And then the emerging markets side: there is a number of countries, lastly China, that looks at blocking SkypeOut traffic or VoIP in general.

Finally, there is the competition from other VoIP providers, ranging from cable companies and telcos to softphone competitors and adapter competitors (Vonage). But most of all IM providers (MSN, Yahoo!, AOL). They are adding voice and video. Interoperabilty will some day take care of the current walled garden limitations. There may even be a regular phonebook. So who needs Skype?

No comments: