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.'"
There's only one solution for Ebay (Score:5, Funny)
Buy It Now: $2,000,000,000
Current Bid: $5.50
Re:There's only one solution for Ebay (Score:5, Funny)
Congratulations, GoogleBuyer, you are the new high bidder!
Current bid: $6.00
Maximum bid: $10.00
Re:There's only one solution for Ebay (Score:5, Funny)
Re:There's only one solution for Ebay (Score:5, Funny)
Re:There's only one solution for Ebay (Score:5, Funny)
Bubble (Score:4, Insightful)
Re:Bubble (Score:4, Funny)
Look! A needle!
Re:Bubble (Score:5, Informative)
There was no point for them to invest so massively in such a service.
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Re:Bubble (Score:5, Insightful)
A bubble is when EVERYONE buys unprofitable assets. That's a pretty important distinction you are overlooking.
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In a bubble, every shmoe
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"Hi, my name is Shelia, and while you wait for your call to 283-582-2482 to go through, I'd just like to tell you I'm *really* hot for you. You make me moist. Why don't we fool around. It's just $2.99 a minute, and 283-582-2482 can wait."
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I was never sure who was paying in Skype. VOIP is not a strongly positioned standalone app (unless they were doing skype to all phones for free and using the app as a advertising platform), so they had no real positioning marketwise other than a bit of first mover branding.
there is, of course, irony in your
Pretty obvious, wasn't it? (Score:3, Informative)
Re:Pretty obvious, wasn't it? (Score:4, Insightful)
That said, there is one thing I have noticed. I get great call quality with Skype when I call my parents in Ottawa, or my friends nearby, but when I call my in-laws (up in the Northwest Territories), I have anywhere from 3-10 seconds lag, and the quality of service is poor. It would seem that the quality of service is limited by the available bandwidth - they just got 768K 'high speed' Internet there a few months ago! After all that, I plan to continue to use Skype Out, and when they finally start offering more Canadian phone numbers, I may even consider using Skype In.
Re:Pretty obvious, wasn't it? (Score:5, Funny)
Re:Pretty obvious, wasn't it? (Score:5, Insightful)
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.
Re:Pretty obvious, wasn't it? (Score:4, Interesting)
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Now what I don't get is how/why ebay is in the mix, this doesn't seem to have anything to do with what ebay does.
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!
Skype service and support is teh pyske (Score:3, Interesting)
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!)
I use PC-phone with skype (Score:3, Interesting)
Since I bought into mine last y
You're Going to See a Lot of Criticism (Score:5, Insightful)
- Just because a company has a huge and growing audience doesn't mean it can find a huge revenue source. Skype's appeal is that it offers services free or very cheap. That limits its ability to raise prices. And it turns out that there are limited opportunities for advertising or add-on services.
- It's almost impossible to pay for a deal through "synergies." EBay executives talked about how Skype would be useful to connect buyers and sellers in its marketplace. This always seemed to be hooey. The eBay market is already full of chatter, mainly by e-mail, and sometimes by phone. Sure, some of that might well be handled by Internet phone, but how much and what value was created by eBay owning its own voice chat system? Not much, it turns out.
I think the second point is the most important. This deal was easy to criticize because they didn't know what the hell they were going to do with it. They had no forward plan. Where were they taking Skype? What were they going to do with it? How was it going to make money? Nobody knew. And, most importantly, eBay didn't either.So why did they make the deal? Maybe they felt pressure. Maybe it looked like easy cash. One thing is for sure, it never came to fruition whatever they saw in the company. I personally liked the tool but once you start asking for cash, you can expect to see your user base taper off. You're competing with something that is already incredibly cheap in the states. If it ain't free, you're going to have problems operating in the black. If it is free, you better have some mad advertising revenue or market data stuff to sell
Google knew where they were going with the YouTube purchase. It's now pretty clear eBay didn't know exactly what they were going to do. But, hey, they could treat it like Microsoft's original Xbox venture, "We lost a lot of money but fsck it, we've got a ton to lose and I'm bored with being the top dog in a single market!"
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Shades of AOL/Time Warner, no? A little different, in that AOL was actually a money-making proposition, but I don't think Time-Warner knew exactly what it was going to do with AOL, save hook its star to it, place some of their content on the site, and watch the money roll in. Flash forward and now TIme-Warner looks pretty stupid.
Re:You're Going to See a Lot of Criticism (Score:4, Informative)
They later changed the name and refocused as the dot-com bubble collapsed and the 'AOL' part approached worthlessness in evaluation, and the company didnt exactly need the loadstone of a posterboy for the bubble as a name.
As to the flash-forward, the merger structure and name changes makes it fairly difficult to figure out exactly who the most stupid party was, but anyone left holding stock in the joint company probably had more left than if they'd been holding only AOL stock. Which doesn't exactly make them less stupid for touching AOL stock at all.
It's sortof sad how the high-flying corporate execs appear to have learned very little about how to avoid getting brainslugged by clever marketers.
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Re:You're Going to See a Lot of Criticism (Score:5, Insightful)
Re:You're Going to See a Lot of Criticism (Score:5, Insightful)
However Skype has certain stability problems. In my own usage, I've noticed that it can sometimes be a bit flaky. Moreover, the entire Skype network went offline [slashdot.org] for many days. As a result, businesses stopped thinking of Skype as a serious, reliable option.
My point is that things could have turned out differently if the Skype technology had become mature and stable enough to be a viable option for reliable international calling. They could certainly have gathered a large, paying customer base if the system was bullet-proof. But, as is, many people are (rightly) dubious of the reliability. I think Skype's business model has merit, and the program is very useful. But, eBay certainly overpaid in as much as they paid as if they were buying a mature technology/solution, when in reality there are still many growing pains left in that technology sector.
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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.
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Skype blew quite a few opportunities (Score:3, Insightful)
Skype blew quite a few opportunities.
Due to technical glitches (contact list lost, etc), it did not build customer confidence nearly as well as it could have. I am on my second Skype ID (the first one had its contact list erased twice), and as such, not willing to put up money up front on skype in/out.
Also, they did not go at all after corporate customers. I'd love my university to have Skype officialy, and just be able to type the name of the person I want and boom, I talk to them. But no, there ha
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- 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
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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.
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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
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Yes, this is true. However, in this particular case there were a whole host of critical articles before, during and after the buy-out of Skype. All decent analysts pretty much said eBay were fools, and overpaid for hot air. I do not recall seeing any, any at all, serious article that said this was a good deal. As (unfortunately) someone who holds (worthless) eBay stock I follo
Who would have thought? (Score:3, Insightful)
Imagine that. You offer a free service to people and they use it. Seems a bit odd to now say you're not making money because people aren't willing to pay for one of your other services.
To top it off, a technology company now claims they paid too much for you.
Those who cannot remember the past and all that comes to mind.
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Well, let's face it: your average eBay user probably does not know what Skype is, let alone that eBay bought it. Since eBay did little to integrate it into their offerings, this should not come as a shock. Also, eBay doesn't have the most sterling reputation, so you had to be wary that they'd poison the Skype pool somehow trying to make money out of it.
Shades of 2000 (Score:4, Insightful)
None of these businesses that provided expensive service for free and whose selling point was that it was free have ever managed to become profitable. eBay should've known better when buying a business in 2005.
Shades? (Score:5, Insightful)
the problem, as i see it (Score:2, Insightful)
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And thus the second dotcom bubble bursts (Score:5, Insightful)
3 years ago, it seemed like everyone and their mom was getting into VoIP. I remember asking someone writing one, how are they going to make any money? He answered, get bought out by a big corporation.
Well, it worked for Skype, I guess.
Everything fails until it works (Score:2)
The rate of return on an investment is always determined by its risk. That's because the rate of return is the "price" those who want the capital must pay for the right to borrow your money. Obviously if the investment is quite safe, borrowers can pay a low price for your money. That's why the US Treasury can pay a measly 4 to 5% interest on the money it borrows. It's a v
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But you don't invest in something just because it is a big
risk, and therefore might well be a large return.
You have to be bought into the dream of what it is
going to be, you have to believe and act on that belief.
I don't, in my heart, believe that EBay saw anything except
the possibility of money.
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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)
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After a couple of months, the quality of the calls was awful, calls kept dropping or not connecting. So when it was time to renew, I didn't even consider it.
Now I just use SkypeOut occasionally and mostly Skype-to-Skype.
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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Don't be short-sighted (Score:5, Insightful)
Don't be too hasty. There are two avenues that open up huge potential for revenue:
In short, there is a HUGE untapped market out there. If EBay would stop trying to milk their investment and would start investing more into it, they could really get some substantial returns.
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Opening up some of the "secrets" to potential customers and supporting intranet-only implementations of the software open up a revenue stream.
Bingo. As long as Skype remains closed, only eBay gets to play "for real".
Somewhere between the lazy super-geeky hardware marketing done by Asterisk, and the ultra-mainstream consumerist approach taken by Skype, lies the whole freekin' revolution in voice communications that we've been waiting for since the late 90s.
How much does an enterprise pay for a new phone system? What if the front-end to that phone system was Skype and backend was Asterisk? I'm not an operator, but I suspect that IT managers could
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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.
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Skype-based SIP servers (Score:3, Informative)
I almost put this exact recommendation in my post. Then I found it already exists:
Not competitive (Score:2)
If you target a price consious market, you need to be competitive ;-}
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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
Ah but you wouldn't. (Score:3, Insightful)
Skype doesn't open everything up because they have MUCH more to lose than to gain. They have the userbase, and they have the lock-in, all they have to work out is how to "monetize" that (ugh, ha
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In my experience, the voice quality of Skype has been pretty high. Better than a cell phone, not as good as a land line. What sold me, though, was the incredibly cheap rate. For unlimited Skype-in and Skype-out in the US and Canada, the price is $30/year. That comes out to $2.50/month for unlimited calls, which is an INCREDIBLE deal.
I spent time searching for a cheap SIP plan, but there's nothing even remotely that cheap. About the cheapest rates you can find are 1.2 cents/minute for the 48 continguous
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As you use SIP, I was wondering if you had any advice towards getting a decent wireless SIP phone and a good provider. I don't want to run a PC with Asterisk on it at home if I don't have to, but there -is- one that's always on that I could use, if necessary. (I'd kind of l
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Wait a year. Or go with whatever the US equivalent of a DECT base with SIP is, like the Siemens Gigaset 450. Don't be fooled into getting a WiFi phone -- the hardware is crap in most cases, and in the rest of the cases the software is crap.
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"Some dude said that some dude said that someone heard
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As for Gi
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We use Skype a lot where I work. We've also experimented with Asterisk. The call quality with SIP is significantly lower than Skype, at least over low-bandwidth Internet connections (which we deal wit
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Any decent VoIP provider will offer you a quality which can never be matched by PS
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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
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They fail to mention a couple of things ... (Score:2)
And they don't mention whatever benefit they manage to gain by stealing users passwords and other data, as referenced here: http://yro.slashdot.org/article.pl?sid=07/08/26/1312256 [slashdot.org]
Pipes are a commodity (and a miserable business) (Score:3, Insightful)
Can't compete with free (Score:2)
Also, the Skype linux client SUCKS, they're really letting it lag behind the Windows version.
bubbles and such (Score:5, Insightful)
Business people have trouble with this kind of thing because they don't understand the technology. As in this case, they thought 'skype will be super-popular' which may be true, but they didn't see that once everyone has Skype no one will need Skype out.
Tech people and engineers tend to have trouble with it because they tend not to understand marketing, business prospects, or what people want. They say things like, "Less space than a nomad, no wifi. Lame" or "This is the year of linux on the desktop" and don't understand why most people aren't interested in open-moko or the gimp.
If you DO happen to understand both of them, it will be a competitive advantage that can make you a killing in the stock market. As anyone who invested in nintendo a year ago knows.
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I take it most business make more money out of technology than you and I combined. On business level, businesses understand technology quite well.
Surprisingly, you are wrong: most businesses fail. Venture capitalists know this; look at a VC portfolio and you will see they have invested in several dozen companies, most of which will never make a product. But it is worth it for that one company that does do well.
The fact that the dot com bubble existed is in itself evidence that investors/business people don't understand the technology. I mentioned Nintendo earlier, and indeed it is a perfect example. By November last year, many people here on
Who cares about Skype? (Score:3, Informative)
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In fact, I'd settle for having an n800 client, like Skype and GizmoProject do.
Skype-Out great for International Calls (Score:3, Informative)
Now in comparison, I spend somewhere between £50-£90 per month on my mobile phone. The amount largely depends on whether I've traveled out of the UK that month. With wider adoption of VoIP services on mobile devices, for sure my cell phone bill would drop and a portion of the money would siphon across to my Skype account.
The final thing holding me back from spending more on Skype is the expense and poor quality of the "phone" devices available. I spent £100 about a year ago on a Skype Wi-Fi phone. No need to have anything connected to my computer, the phone's base unit was supposed to connect directly to my wireless router and behold, I have Skype calls very easily. Unfortunately, after waiting almost a month for my order to be fulfilled, within 3 weeks the phone unit died. I gave up trying to get a refund from Skype and trashed the thing. So far I've been reluctant to spend a similar amount on a device that may die again quickly and have to deal with Skype customer service.
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I am obviously in the minority of users who pay for Skype services. I live in the UK and my family is in Australia. Using Skype-Out at a rate of around £0.1/minute is significantly cheaper than any comparable Telecom or other "cheap calls" organisation. I know quite a few other people who use Skype in the same manner. I spend around £5 per month on Skype.
Why not check out http://www.telesave.co.uk/ [telesave.co.uk] who offer 2.5 pence/minute for Australia. I've used them for ages - cheap as skype but more convenient.
There are paying Skype users out there... (Score:2)
No shit!? (Score:2)
Ebay are whining (Score:2)
Of course Zennström & co wanted to push up the price, but in the end the buyer is at fault by doing an insufficient market analysis.
Skype shot themselves in the foot (Score:2, Interesting)
What's the prob? (Score:2)
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"division also recorded its second quarterly profit in a row on July 18 on revenue of $90 million."
The $90 million is revenue, not profit. There is no indication of what the profis is.
UNASS YOUR PROCESSES! (Score:2)
Of course, in Murders and Executions, it is up to the buying company to decide before getting heavily invested. They might have an excellent product but ass for business processes. Companies are not only buying-out shareholders but they're also payin
Why you paid for it? (Score:2)
They got what they bought. They have nothing to complain. If they paid the price, then they clearly thought it was worth it. There's no point now in releasing sad, sad statements in the public that they feel cheated or were wrong.
Wait, I forgot what we're talking about..
One thing that puts people off Skype (Score:2)
They didn't follow my plan (Score:2)
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.
Resurrect skype for ebay?! (Score:2, Informative)
After all, it is not impossible for ebay to use skype effectively even if skype is not profitable independently. Just imagine,
1) assign a free skype account for each buyer or seller (match skype id to ebay id?)
2) add a voice message feature to My Ebay (maybe, record conversations as well?)
3) associate voice messages/conversations to transactions
4) resolve disputes with voice messages/conversations
5) how about a little fee for such a convenient service in order to safe-guard the interests of both
Do you hear that sound? (Score:2)
Re:Call Me....No Skype Needed!!! (Score:4, Funny)
Clearly it's the version number. (Score:3, Informative)