dave

It’s almost like Jason (kottke.org) buying and releasing a Tax program. What’s the point?

Ebay dosn’t want another Google in its hands.

Robert, we are in the testing stage for something similar to what you may be describing. If you want an invite email me.

excellent comments.

I wanted to pose this as a question more than anything else. I think it is interesting that stock initially popped up, maybe because of the Christmas expectations but has been sinking. I did a look at the daily revenues of Skype, which are actually not growing as fast - though the “downloads” are.

i often wonder about the schism in the usage of Skype overseas and in the US, and how this translates into opportunities for eBay in the non-US markets.

thoughts?

Yes, such a service could be developed using AJAX and Javascript in general…

Does anyone recall the days of Yahoo Chat which allowed voice communication within the chatbox using only Java? I am on the bandwagon that 85% of people don’t want to download software, and the majority don’t want to do voice communication - even though that should always be an option.

Surely Google is developing this.

BTW, Skype is pathetic. I refuse to install it on my computer anymore. Everytime I install it, my CPU usage goes nuts. This happens when I just turn on the computer and don’t even use the sorry program over their sorry network.

for a rough sense of Skype traffic (which has been going up, more than 100% growth in the past year), see here:
(link)

while there’s a legitimate contention that eBay overpaid for Skype traffic / users, a more detailed what-if analysis would probably entail looking at a) where eBay stock price would be if they hadn’t bought Skype, and b) where else could they have spent the money / what else could they have bought, and lastly c) what if they had simply issues a $1-2B dividend to shareholders…

i’d have to say that doing Skype was probably better than doing nothing, and if all they were buying were 30-70M Skype users internationally that were synergistic to eBay and PayPal non-US business, it probably wasn’t such a bad deal.

however, you could argue they might have been more creative with acquisition activity, or that they should simply have returned the excess cash to shareholders in the form of a dividend — other companies with slowing growth (notably Microsoft) have made this call lately. however, i’m guessing had they done so they would have immediately signaled to the market a much lower implied multiple.

a completely different strategy might also be to setup a corporate venture unit, and take $100-250M to invest in eBay-focused startup ventures… guessing that if you invested in 50-100 startups at around $1-2M each, you might end up with 3-4 Skypes in the mix after a few years. certainly with everyone focused on Google, Yahoo, and Microsoft this strategy could be helpful in other ways for eBay. witness Cisco’s successful efforts in spinning out / later acquiring related technology startups. probably a less immediate strategy, but perhaps also less speculative bet than the $2-4B Skype deal.

in summary i’d still grade the Skype deal as a ‘B/B-’ with an option on moving to a ‘B /A’ if the growth turns into the revenue they’re looking for in ‘06/’07 and beyond.

Regards,
n

As relates to the eBay stock price, the question is still whether or not the competitive advantage gained is worth $2.6B minus whatever value the core Skype business had/has.

Nonetheless, classified sites that don’t respond with a similar or better solution will lose traffic fast IMO.