September 28, 2005

eBay and Skype

Meg Whitman, CEO, eBay, states that eBay's acquisition of Skype will help it to leverage Skype’s technology to further the growth of PayPal and eBay. However, according to some business analysts, the manner in which eBay and PayPal operate does not justify the purchase of Skype. This is because VoIP will probably not add much to the already established online trading system that eBay has perfected.

Also, eBay and PayPal target the consumer to consumer and business to consumer market; if the company wishes to move into business to business as well then Skype may not be the right choice as Skype too does not spring readily to mind when discussing business to business VoIP. Moreover, even though eBay has acquired Skype and its base of over 50 million users, it will still have to face serious competition from Google and Microsoft.

Google has introduced Google Talk Beta, which has the advantage of running on the open SIP and will allow Google greater interoperability. Google may team up with Earthlink and SIPphone. LCS 2005 is Microsoft’s venture into providing VoIP services to businesses. Microsoft has also purchased Teleo, which is a VoIP provider. Yahoo was already providing PC to PC and PSTN call facility to the users of its IM, its purchase of Dialpad Communications will allow it to add VoIP calls facility to its IM service.

One advantageous manner in which eBay can leverage its purchase of Skype is to employ its knowledge of the preferences of its customers and target them accordingly using VoIP.

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