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Old 09-08-2005, 11:49 AM   #1
Larwee

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Default eBay in talks to buy Skype

The Wall Street Journal reports that eBay is willing to pay between 2 billion and 3 billion dollars for Skype. But it also reports that the talks could fall apart.

The reason eBay is interested in Skype is reported to be because eBay is interested in adding services that make it easier to buy and sell online.

Skype has had talks with others previously which fell apart.

http://www.pcworld.com/news/article/0,aid,122453,00.asp
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Old 09-10-2005, 04:00 AM   #2
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Skypes a great service, and hopefully eBay won't do any injustices to its userbase if it's bought.
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Old 09-10-2005, 12:14 PM   #3
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It seems amazing that Google, Yahoo, Microsoft Corp. and AOL have all recently moved to expand their Internet-based voice services and now eBay...

Last edited by etechsupport; 09-10-2005 at 12:16 PM.
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Old 09-11-2005, 07:57 AM   #4
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It doesn't surprise me. They're all dynamic and hyper-competitive companies who realise that by snagging a first-mover advantage, they'll be able to beat the telcos at their own game.

Skype's been in an enviable position for a while for this very reason. They were the first provider of VoIP services to really gain traction, so Google and others have been eyeing them off for months. eBay seems like the most unusual suitor yet, but they may be able to build the service up and then spin it off for a profit after a few years have passed.
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Old 09-12-2005, 11:34 AM   #5
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eBay has made it official that they are buying Skype. But the thing I find most interesting is the actual purchase price.

A figure of 2.6 billion dollar is the one that is most often mentioned. But it turns out it could go as high as 4.1 billion dollars depending on future Skype performance targets.

The next thing of interest is the number of registered users involved between the two. Skype has 53 million registered users and eBay has 157 million registered users. That is a lot of people. With that many there is going to be some overlap. But still it is a lot of people that eBay will be able to use to their advantage.

It is going to be interesting to see exactly what possible new and unusual ideas eBay will come up with this Skype purchase, in addition to the obvious of making it possible for buyer and seller to talk to each other.

I'm also curious to see what this does to eBay stock prices over a longer period of time. When the possibility of the purchase first became known the stock prices dropped. Many investors and stock watchers couldn't believe that eBay would make such a purchase and some didn't think it was a good idea.

There are more details about all of eBay deciding to make the purchase in this link http://www.networkingpipeline.com/sh...leID=170702166

Last edited by Larwee; 09-12-2005 at 12:00 PM.
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Old 09-13-2005, 11:52 AM   #6
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Few analysist think they've paid hefty price and overpaid perhaps eBay could quite easily have developed its own voice service.
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Old 09-13-2005, 01:50 PM   #7
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It's not just analysts, several companies I work with doing several million a year on eBay were commenting about the purchase.

#1, they have no desire to use VoiP on eBay as most items they sell are done in volume will little markup, the point of selling online is to limit how much you touch the product and interact with the customer in order to make your margin. If you have to hire reps to answer VoiP calls and handle extra support for customers on a $5 item, you could easily end up $5 negative. $5000 item? sure take the call, otherwise it ain't worth it.

There's also the question of where's that 2.6billion going to come from with a voip service that barely has a revenue stream, and even if eBay integrates it and sells minutes or a service plan it still won't be that huge... Most likely it'll mean increased overall costs in doing business on eBay or Paypal over the next five years, which at the rate they've been going, sellers aren't that happy.

Overall I think it was a poor move just purely on cost, 2.6b for VoiP technology? Sure.. they bought an installed base, but how much crossover was there already with eBay's massive share of internet users that they could have converted with their own private label voip software in a couple years.

I think they just got scared of ******** up again like they did trying to compete with PayPal before buying it out, and threw dot com style money at the problem.
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Old 09-13-2005, 11:10 PM   #8
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As I mentioned in an earlier post in this thread, that 2.6 billion dollars could end up being 4.1 billion dollars.

But, here is a new twist to all of this and it could be some very bad news for eBay. A majority of Skype users aren't pleased with the sale. It was mostly word-of-mouth advertising by happy Skype users who made it such a success.

When people who made it a success aren't happy, that could mean an end to growth and also might mean some of those people will leave Skype for another service. This is something that is worth watching very closely.

Here is an article about this http://www.eweek.com/article2/0,1895,1858664,00.asp
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Old 09-14-2005, 08:39 AM   #9
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Overall it's appreciable that within only two years skype has achieved spectacular growth which is quite amazing which is the result of the hard work and contribution of their motivated staff. Perhaps their staff was not interested to take over it by eBay.

However it wonder me, does eBay really want all its customers calling each other?
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Old 09-14-2005, 03:19 PM   #10
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Quote:
Originally posted by etechsupport
Overall it's appreciable that within only two years skype has achieved spectacular growth which is quite amazing which is the result of the hard work and contribution of their motivated staff. Perhaps their staff was not interested to take over it by eBay.
Skype's primary method of growth was their deal with Kazaa leveraging the P2P software's 300 million users to gain their installed base with tech savvy and early adopters - not to mention users looking for cheap/free services.

Quote:
However it wonder me, does eBay really want all its customers calling each other?
That had me confused as well, eBay has always went for a walled garden approach keeping buyer/seller within the eBay site for sales and communication, detering users from directly contacting each other as they were concerned about users bypassing eBay to purchase/sell direct thus cutting eBay out of their fees.
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Old 09-15-2005, 06:33 AM   #11
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Well, I think perhaps the large customer community and skype's technology has attracted ebay although if you consider their value it is not in the annual sales as their paying customers numbers are less in consideration to total community.
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Old 09-15-2005, 11:22 AM   #12
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Here is an interesting article about why eBay thinks Skype is worth so much.

You will notice that Skype was called a 60 million dollar company being sold for 2.6 billion and possibly up to 4.1 billion depending on performance.

eBay management has some interesting things to say, and it sounds as if their chief financial officer has some doubts about it.

http://www.time.com/time/business/ar...105103,00.html

Last edited by Larwee; 09-15-2005 at 12:46 PM.
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Old 09-15-2005, 12:32 PM   #13
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I still think their CEO Meg Whitman is nut to have done that deal. That was a pretty good article but I still can't see how they justify that kind of money.. Even if you value every user (even the free and inactive) at $300 (the typical amount ISP customers use to be sold at), that's about 1 billion. Tho' I still think that's wrong as I'd never count free users at the same value.

Just can't make sense of it as the acquisition cost of customers and software development cost cannot be that high per user based on their 2.6b > 4b deal. Insane.

Either they luck out and this is some brilliant idea somewhere vaulting eBay sales and bringing down fraud, or Meg Whitman will be joining Carly Fiorina along with the other ex-CEO's.
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Old 10-17-2005, 03:15 AM   #14
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Niklas Zennstroem, chief executive and co-founder of Skype is making some public comments about the sale of Skype to eBay.

Zennstroem said he had talks with Rupert Murdoch's News Corp as well as several other companies and also considered an initial public offering.

He believes the day will come when people will not be paying for telephone calls. That is a nice thought, but that remains to be seen.

http://today.reuters.com/investing/f...TECH-SKYPE.XML
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Old 10-05-2007, 10:27 PM   #15
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Default eBay admits paying too much for Skype

It has been about 2 years since eBay bought Skype for 2.6 billion dollars. Now eBay admits they paid too much.

Ebay announced a few days ago that they are taking a 1.43 billion dollar charge related to the acquisition of Skype.

Skype's membership has grown since the purchase by eBay but it hasn't been making the kind of money eBay was wanting.

Skype earned 90 million dollars during the second quarter of this year (2007). That is way below what eBay had predicted.

Here is a link to an article with more details about this http://www.iht.com/articles/2007/10/...ness/skype.php
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