Skype brought by eBay
Published September 12th, 2005
At first glance, auction giant eBay and net phone firm Skype seem to have little in common apart from the fact that both do almost all of their business online.
eBay is a giant marketplace used by more than 100 million people to buy and sell all manner of things to each other.
In comparison, Skype has about 53 million users who make cheap phone calls via the service that relies on the net to carry the conversations.
Certainly, many analysts have questioned why eBay splashed out $2.6bn (£1.4bn) to buy Skype.
n Friday 9 September, and before the deal was made public, Goldman Sachs analyst Anthony Noto circulated a memo to clients saying that a purchase would do nothing that a licensing agreement could not accomplish.
He reasoned that by paying to use Skype’s net communication technology, eBay could just as easily exploit the reach of the phone firm’s core audience.
Mr Noto wrote that he struggled to see the benefits eBay would gain from buying Skype.
What eBay does get for its money is access to an audience in places that it, so far, has not reached very well.
Almost half of the users of Skype live in Europe and a further quarter live in Asia. Only an eighth of them are in North America where eBay has its biggest chunk of users.
For its part, eBay said it was buying Skype for the same reasons that it bought Paypal and it saw the same kind of opportunity as with that company.
But the purchase of Paypal back in 2002 made more sense because many of the deals done with the net payment system were between eBay traders.
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