EBay Admits To Bad Call On Skype 297
MaineCoasts writes "The Times online reports that two years after buying Skype for 2.6 billion, Ebay yesterday warned shareholders that they may have made a mistake. In essence, they vastly overpaid for the company. ZDNet offers analysis of the announcement: 'Clearly, the current business model is not enough to satisfy eBay in light of how much the company spent on Skype. And the reason is simple. Even though Skype has done a very good job of getting users to download its software client, most people who use the service do so to make free Skype-to-Skype phone calls. The only way that Skype makes money from its subscribers is when people use its Skype-In or Skype-Out services. Skype-In allows users to pay to rent a phone number, which people on regular phones can call. Skype-Out allows users to call traditional phones or cell phones for a fee.'"
I've been a skype in/out user for a while (Score:5, Interesting)
To ebay – get your act together or you'll lose most of your current paying skype customers (and forget about growth)
Re:Bubble (Score:1, Interesting)
1. a non paying customer base has little value - base a company value on revenue and operational margins
2. customers change services rapidly on the web
I predict ... (Score:3, Interesting)
Personally, I hope whomever buys it, they open up the protocol as, if it does open, it could be THE voice platform.
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SIP VoIP vs Skype (Score:5, Interesting)
SIP allows me to connect to networks without hassle and without problem. Half of Skype's problems that I see is the fact that they are using a closed protocol, again, the call quality is too low to be considered acceptable as well.
If they managed to fix this, I would be a lot happier to move everything onto one provider. I currently have to subscribe to three different service providers to get what I want, this means three bills, three accounts (In different countries, so different currencies as well) to manage and three times the headaches.
If they started offering a decent solution, and I would be one of the first to jump ship.
Berny
Re:Pretty obvious, wasn't it? (Score:4, Interesting)
Re:Pretty obvious, wasn't it? (Score:5, Interesting)
However, from the article:
I'm very wary of what 'monetize' might mean. I'm surprised that they didn't plaster ads all over the application soon after eBay bought it to be honest.
Skype shot themselves in the foot (Score:2, Interesting)
I SkyeIn and SkypeOut (Score:4, Interesting)
Just wanted to let you know that we saved a ton of money on our phone bills by switching to Skype!
Re:Don't be short-sighted (Score:3, Interesting)
The problem is that nothing has enough momentum for people to be willing to download it. It's like how everyone has 3 different instant-messaging applications. What we need are open standards.
Re:You're Going to See a Lot of Criticism (Score:3, Interesting)
- About a half-billion dollars of the charge is for a payment to Zennström, Friis, and other early Skype investors. Cha-CHING! I've been on the wrong end of a couple of similar (smaller) acquisitions and what typically happens in a well-negotiated deal is ebay (in this case) doesn't pay them whatever they agreed to beyond a token up-front signing payment. Right or wrong, typically the founders don't have enough capital to drag it into court so they take their small pay-out with the original deal and that's the end of it. In this case, ebay negotiated so poorly they couldn't get out of their deal.
- Sure they value deals at Billions(!) but when it comes down to it, normally acquisitions are just not that cash-rich. Except in this case. If they had met their earnings targets, then the payout would have been double the charges they are taking.
- ebay's being very uncharacteristically up-front about the charges. Which suggests to me the damage is far worse that what's being reported. Look at all of the mortgage-backed securities that are still going from billions in valuation to zero overnight.
This suggests there's far more wrong at ebay than right.
Re:You're Going to See a Lot of Criticism (Score:3, Interesting)
A Skype module would also be nice to put into our software. Just click a button and call tech support over the Internet.
Skype has potential but not in it's current form.
Re:You're Going to See a Lot of Criticism (Score:3, Interesting)
Did they? I think Google is just flailing around these days, trying to figure out what to do with all their money. Buying YouTube made no sense to me; basically YouTube is like Napster for videos, except that they have to pay for their own bandwidth. Google bought it because it was cool and popular, not because it made sense financially.
Re:Pretty obvious, wasn't it? (Score:5, Interesting)
Skype has to find a way to increase their revenue as their network of users increases; probably through an ad-revenue stream to their in-calling services. Doing this the wrong way, though (pre-call audio ads, etc.) will just scare people off to IM services with voice chat capabilities, which is increasingly all of 'em.
Good luck to 'em. I like skype (except for the lack of "quit/exit" in their file menu!)
Skype sucks as a regular phone (Score:3, Interesting)
I can't call the IBM pukes that I have working for me. That's because Skype doesn't allow Skype-out service to some area codes, and that includes the IBM conference calling center in Missouri.
And, the Skype client doesn't support DTMF tones properly. That pretty much eliminates Skype for everything except calling your mistress on her home phone. You can't get through any kind of voicemail or call answering touch tone menu without DTMF support.
Re:You're Going to See a Lot of Criticism (Score:3, Interesting)
Skype-in and Skype-out are currently their main revenue sources, and they both have horrible quality. I live in Brazil and have family in the USA and other states in Brazil that do _not_ have internet. I tried skype-out with them and the quality was atrocious. I could have saved about 50% and its just not there yet.
In short, I've bought a skype phone that plugs directly in to my router since I exclusively run linux and their linux client sucks - I already happily spent US $250. I and my wife talks to my family that has internet all the time via skype to skype. Want more money from me? Fix skype-in and skype-out to have universally the same quality as a land line for 50% less money than the outrageous brazil telco's change, and I'll gladly pay you. I doubt they can and that's what I think it would take for skype to have a valid business model. Vonage etc isn't global so its wide open for skype themselves to win or lose.
Re:SIP VoIP vs Skype (Score:2, Interesting)
i'm currently implementing my own voip service - including writing the RTP and SIP libraries for my voip client - and i can tell you voice quality and signalling are mutally exclusive. the former is contigent on the number of channels * sample rate * resolution (how many bits you use to encode), this is then passed to the codec that will compress it for transmission over the network. some codecs (won't go into them here) are good basically some leave a bit to be desired. skype uses a proprietary codec and enables the wide band mode in said codec for superior call quality.
as far as sip is concerned its just a signallying protocol that yes, can be used in a variety of media applications, but whether they use sip or aix or h.225.0 or even an in house one, it won't make much difference. Again, audio quality is contigent on many factors and sometimes due to the network is out of the provider's hands. Its like bringing your car to the mecanic and complaining about the bumpy roads. what you seem to be complaining about is that you want skype to play nice and interoperate with other voip clients. which they don't have to do. if you as a client are unhappy with this you have the ultimate power - don't use it. I for one will aim for interoperability with my voip service, but as with any business they don't have to play nice - its their product.
please let me know if it was missing something in what you were saying so i can correct myself or understand better.
Re:You're Going to See a Lot of Criticism (Score:3, Interesting)
There are no surprises here. Everyone already knew this. Well, hmm, perhaps eBay for once in their corporate life admitting that they are complete fools, is actually surprising -- again, everyone has known that for sometime too.
Can anyone explain to me why that fat worthless saleswoman Meg Whitman is still employed?
Skype service and support is teh pyske (Score:3, Interesting)
At first this really annoyed me. Then I realized that if AT&T (or any regular telco) had done this to me, I could have complained to the public service commission and went several rounds with yet another front line support person who doesn't understand the problem and just replies with an email that says effectively, "AT&T says it didn't happen. Case closed." At least I would have had a reason to vote against an incumbent somewhere.
So, with Skype, the service quality is crap, the customer support is crap, there is no recourse, but it's cheaper than water. With AT&T the service quality is excellent, there appears to be functioning customer support which sometimes results in a problem resolution, there is recourse to a public oversight agency that is a useless pile of crap, but it's frightfully expensive.
Pick your poison. Six of one. *** Your favorite appropriate cliche here ***
Re:You're Going to See a Lot of Criticism (Score:3, Interesting)
I use PC-phone with skype (Score:3, Interesting)
Since I bought into mine last year during the special, I think it was all of $15CAD to subscribe. Given the amount I use the service and the savings I've made on long-distance calling cards, as well as cellphone bills (free incoming, yay) I'd say that it's been a very worthwhile investment. I'm hoping they'll have another special offer around New Years for the same price, but if it were twice that it would still be a deal for me.
In line with other tools for geeks in relationships over distance, those interested might want to check out goodies like SNES9x (you can play old-school SNES games together), and VLC (with a good enough connection/PC, you can broadcast a movie over the 'net so you can watch shows together). It's not quite the same as being together and snuggling, but so far it's helped our relationship keep in touch and thus survive until I can find work and move to Toronto [shameless plug]Hire me[/shameless plug]