Skype, PayPal and eBay

There’s quite a bit that’s interesting in all this Skype/eBay business. I know others have raked over all this before, but now it’s official I’ll weigh in too.

The release is quite informative. It says “Skype, eBay and PayPal will create an unparalleled ecommerce and communications engine for buyers and sellers around the world.” How, exactly?

Well, “Skype will streamline and improve communications between buyers and sellers as it is integrated into the eBay marketplace. Buyers will gain an easy way to talk to sellers quickly and get the information they need to buy, and sellers can more easily build relationships with customers and close sales. As a result, Skype can increase the velocity of trade on eBay, especially in categories that require more involved communications such as used cars, business and industrial equipment, and high-end collectibles.”

That’s straightforward enough. Buyers and sellers can hook up via a SkypeMe button which lets them instant message, or talk to one another, presumably for free. Or does it?

“The acquisition also enables eBay and Skype to pursue entirely new lines of business. For example, in addition to eBay’s current transaction-based fees, ecommerce communications could be monetized on a pay-per-call basis through Skype. Pay-per-call communications opens up new categories of ecommerce, especially for those sectors that depend on a lead-generation model such as personal and business services, travel, new cars, and real estate.” This, I take it, means that beyond merely providing a market-place of sellers and buyers of goods, eBay hopes to become a market-place of services, whether they’re pure consulting, travel agencies, or selling things that require a degree of expertise (cars and real estate are mentioned, but they could as easily be careers.

Then there’s paying for Skype’s services. “PayPal and Skype also make a powerful combination. For example, a PayPal wallet associated with each Skype account could make it much easier for users to pay for Skype fee-based services, adding to the number of PayPal accounts and increasing payment volume.” True: Skype’s payment system is awkward, if not disastrous for many folk living off the beaten track. But PayPal’s isn’t much better. Both services need to get with the program on that, or face the growing wrath of people in the world’s more interesting regions.

I won’t get into the extraordinary cost of buying a company that made only $7 million last year. There’s no question there’s wonderful synergy to be had here. But there’s also the caveat that eBay should not underestimate the other lesson that the Skype revolution has taught us. People were willing to overcome all sorts of technophobia when they realised the enormous cost and social benefits of installing Skype. Now they’ve done so, they will more easily than ever before switch elsewhere if the appeal of Skype diminishes, either because of sneaky advertising, sneaky fees or if the remaining drawbacks of Skype — most particularly, but not exclusively, its payments system — are not tackled quickly.

12. September 2005 by jeremy
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