So the rumors turned out to be true, eBay is acquiring Skype, the VOIP service for a price of at least $2.6 Billion! There'll be a lot of commentary on this one throughout the day from various pundits, so check back, as I'll keep updating this entry with interesting links and quotes. Let me just stick my neck out now and repeat that I like the deal. Ebay is, fundamentally, in the communication business. Their customers will be rapid adopters of the Skype service, and it will complement their business.
Update: This is from a couple of days ago, when the deal was still in rumor phase, but Jeff Matthews was callind this deal Meg Whitman's Carly Fiorina Moment, referencing, of course, the regrettable purchase of Compaq. I don't see the analogy on this one at all. This isn't two old mature companies with ailing models selling commodities merging.
And if you want to get a sense for how powerful this Skype-thing is, and how potentially disruptive it will be to global telecom, consider the fact that there's a move afoot by China Telecom to ban it in China. These two sentences say it all:
It costs subscribers in
China as little as 2.5 US cents per minute to dial to major Western markets in the United States and Europe.
The rate of the same service from China Telecom is closer to 1 US dollar per minute.
One more thing to thing about is the importance of an established customer base. Network tools, like this, as well as p2p, Myspace, and IM, are only powerful if they have a significant customer base. People will say "Well, this software is easy to replicate, why didn't eBay just build it in house?" but the base is everything, and the Skype base happens to be both large, as well as inclusive of many of influentials in technology. That's where the value comes from.
Update 2: Here's Ross Mayfield:
Pierre Omidyar once explained to me that one of the smartest things he did when starting eBay was to not constrain communication around his market -- by publishing email addresses. He was suggesting to me that we open the Socialtext Customer Exchange, but the core insight is more valuable. Back when I was running a B2B exchange, this was considered a contrarian move. After all, it let buyers and sellers circumvent your transaction fees in some cases. But letting go of control fosters liquidity. Especially when you couldn't possibly structure communications to fit all transactions. Today I would venture that most of the communication on eBay's transactions are out-of-band. Other communities with emergent liquidity such as Craigslist succeed by enabling even further out-of-band communication.
Skype will provide eBay a communications platform for the other half of it's market -- the conversations. eBay will enhance the liquidity of it's spot market, gains a business with great fundamentals, positioning for yellow pages business, further infrastructure for billing, payment and -- identity.
Interesting, another company that practices this is Google, as they post the URL of the advertiser within each ad, theoretically allowing a user to circumvent "the click". Seems to be working well for them.