SkypeBay?

23 Comments

Another day, another Skype rumor. The Wall Street Journal is reporting that Skype is in talks with eBay, but from the article it seems, these are just talks. Yahoo, Google, NewsCorp… so now eBay. Who’s left? Microsoft? I am not sure what to make of the conversations, because frankly at $2-to-$3 billion, it doesn’t make sense for eBay to get into a whole new business. I can understand giving the consumers ability to click-and-call the seller/buyer.

But it can be done fairly cheaply and easily. When connecting to PSTN, eBay will then have to deal with all that comes with it, including a nosy and notoriously pesky FCC. Are they ready for it? Why not partner with someone – and there are enough desperate companies who will do this – and get the “voice apps” embedded into their products. There is a good reason why Yahoo’s Dialpad service still uses Net2Phone, and Google hasn’t touched the PSTN as yet.

Ari Jacoby, President and CEO of VoiceStar, a pay-per-call company emailed me with his thoughts, “Because 95% of the referral economy or lead generation business is offline (Rent.com), they (eBay) need a technology solution that is custom tailored to the performance-based marketing niche–one that allows merchants to pay for calls.”

A theoretical Ebay Pay per call offering is much more interesting than Ebay
morphing into MCI

Andy is normally right about a lot of things, but not this one. PaulK says, “color me baffled.” Fred Wilson says, “I think Skype is a bargain at $2bn to $3bn.” That’s a VC talking! :-)

Anyway this deal brings up all those issues I have been talking about for the longest time – their looming battle with Google, and the limit of the eBay network. In other words, two issues which hover over future growth like monsoon clouds.

23 Comments

Jake

morris
I had seen in XTen’s 10-Q filing that they had to change their name. They had a name conflict with an existing entity. Not surprised that they would use VON as a venue to announce a partnership. Do you know who it is?

I wish them well in their new model. Seems like with the end user price of most VoIP software clients (Skype, GTalk, GizmoPhone) as $0, that they will have to continue to supply service providers.

Ab

China Telecom said to block Skype

China Telecom has started blocking access to a popular Internet telephone service that is threatening its long-distance revenue, according to local media reports and Internet postings….

They said China Telecom, whose broadband Internet service allows access to Skype, has plans to eventually block the service throughout its coverage area nationwide.

When it is so easy to block Skype from a major country like China, evaluations of 2-3 billion may prove ephermeral. Regulations prohibit bypassing national telecom carriers in many countries. china may be the start but it probably won’t be the end.
If skype is cut off from its largest growing asian market, Ebay’s better off paying 200million for skype and stuffing the rest down the politicians throats if they are so eager to buy out skype. They’ll be more successful.

morris

jake

thanks for your take on XTEN’ future,since the company moving to a per-seat license model with a deliberate focus on annuity revenue I just wonder if this could ad value and potential in long term to Xten networks?BTW company changing name and announcing new partnership at von 05.

Jake

Morris:

This is not my site, it’s Om Malik’s and you’re certainly free to do as you want with no regard to my question. I asked, because this was the second or third I saw this question asked on different threads by you. Just curious.

As far as the hype on Skype being valued at any multiple of $1B or a similar number for Vonage, well I’m floored. Maybe eBay’s shareholders voiced their opinions on the rumor: I think they’d like to see how spending $2B on Skype will make eBay that much more valuable.

On XNWK, that comment you copied from another message board…
First, Skype’s users are Skype customers – nobody elses. They generate (not 50,000,000 of them, but a couple million of them) recurring revenue by buying and consuming Skype’s services. Xten does not have 5,400,000 customers, they state:

“Through deployments with leading service providers, Xten technology is deployed in more than 5,400,000 IP endpoints worldwide.”

Since Xten has delivered TECHNOLOGY under blanket, one time payment, unlimited, unbranded distribution agreements to a number of service providers, their client technology has seen broad distribution. But that revenue is already on the books. Xten is not running a service network with recurring revenue, they are not a subscriber based company. They are a software technology provider. You cannot apply a subscriber multiple a la Skype to them and develop a fantasy market cap.

Perhaps with Xten’s new Cisco management, they’ll convince Cisco-Linksys-Sipura-Komodo to buy them and sell yet another softphone and SDK to the marketplace.

craig

newsflash

MOST (almost all), sellers (who are indiciduals) will NOT want people to have the ability to click and call…not like they’d ever be present to take the call anyway.

They like the flea market appeal of ebay, simple selling. calling equals business. Not whymsical selling fun.

so they could do it, but it isn’t going to be mass adopted by any stretch.

craig

morris

found this message which compare skype/ xten(xnwk.ob)
by bc727610
08 Sep 2005, 09:49 PM EDT
Msg. 341 of 341
Jump to msg. #
SUPER HAPPY….

Guys I just read the news about ebay/skype and by simple math we should be trading north of $10.00, I am buying more….

Skype currently has 40,000,000 registered users and we have 5,400,000 registered users. ebay offered 5B for sky which is @125.00 per registered users.

I understand that skype has other things outside the registered users, but…… help me out!!!

so xnwk has 5.4M users @ 125.00 the ceiling market cap should be 675M.

now with the current market cap at ONLY 17M……. that is giving us a value of ONLY $3.15 per register user.

wow 3.15 vs 125 hmmm……..

I smell a super run once news start to come out and we will be trading north of $5.00 before year end.

somebody is “stealing those shares”……..

Comments welcome…..

morris

Jake

well looks like it’s ok with you hearing rumors about selling skype for 5 bil and vonage for 3 bil then guestion about XTEN(which does codes for yahoo/vonage/yak).
I be glad to hear some negatives about XTEN(will change the name brand next week at VON 05)from you or anyone eles.

jamin

All this rumors reported in the blogosphere are really bad for other VOIP competitors who really try to be disruptive. Take Wengo , there is very few post about this company who GPL his VOIP client and use only standards like SIP. I really hate Skype and the way these guy do business,Just remember how much spyware and virus Kazaa ( Also a Skype founder company) was installed in your PC.

Jake

Morris:

Since you ask this “who will buy xten” question over and over, let me ask, why do you care and why do you think anyone will buy them? Why do you think xten is remotely similar to Skype?

Just curious.

Manu Sharma

Google’s growing size (it recently overtook Ebay as the biggest pure play internet business), its upcoming payment gateway threathen Ebay. Add the attractive VoIP opportunity to the picture and it makes perfect sense. This has nothing to do with Ebay’s auction business!

More here

Damian

If it’s true – it’s a terrible idea. $2-3b for a company doing $70m in revenue (maybe) – talk about destroying shareholder value. What are they smoking over there?

Rick

Skype has got more mainstream press today from every major news agency than I have ever seen. Is it all a hoax?

Alec Saunders

Apparently the talks are off… via Fark:

“Ebay reportedly in talks to buy Skype. Talks fail when at the last second some jerk bids $3,000,000,000.50”

Alec Saunders

Apparently the talks are off… via Fark:

“Ebay reportedly in talks to buy Skype. Talks fail when at the last second some jerk bids $3,000,000,000.50”

Alec Saunders

Apparently the talks are off… via Fark:

“Ebay reportedly in talks to buy Skype. Talks fail when at the last second some jerk bids $3,000,000,000.50”

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