Tom Raftery's Musings

There were rumours all last week that ebay were going to buy Skype – but it didn’t seem to make much sense as a deal.

Now today comes the news that the deal has gone through for approximately $2.6 billion in up-front cash and eBay stock, plus potential performance-based consideration.

Meg Whitman of eBay said today:

Over time, we intend to make voice communications a part of the eBay marketplace – a huge step forward in making transactions faster and easier, as well as bringing even more interactivity and humanity to the eBay Community

In the official news release a little of the thinking behind the deal became clear:

Online shopping depends on a number of factors to function well. Communications, like payments and
shipping, is a critical part of this process. Skype will streamline and improve communications between
buyers and sellers as it is integrated into the eBay marketplace. Buyers will gain an easy way to talk to
sellers quickly and get the information they need to buy, and sellers can more easily build relationships A Powerful Ecommerce and Communications Engine

Online shopping depends on a number of factors to function well. Communications, like payments and
shipping, is a critical part of this process. Skype will streamline and improve communications between
buyers and sellers as it is integrated into the eBay marketplace. Buyers will gain an easy way to talk to
sellers quickly and get the information they need to buy, and sellers can more easily build relationships
with customers and close sales. As a result, Skype can increase the velocity of trade on eBay, especially
in categories that require more involved communications such as used cars, business and industrial
equipment, and high-end collectibles.

The acquisition also enables eBay and Skype to pursue entirely new lines of business. For example, in
addition to eBay’s current transaction-based fees, ecommerce communications could be monetized on a
pay-per-call basis through Skype. Pay-per-call communications opens up new categories of ecommerce,
especially for those sectors that depend on a lead-generation model such as personal and business services,
travel, new cars, and real estate. eBay’s other shopping websites — Shopping.com, Rent.com,
Marktplaats.nl and Kijiji – can also benefit from the integration of Skype.

PayPal and Skype also make a powerful combination. For example, a PayPal wallet associated with each
Skype account could make it much easier for users to pay for Skype fee-based services, adding to the
number of PayPal accounts and increasing payment volume.

In addition, Skype can help expand the eBay and PayPal global footprint by providing buyers and sellers
in emerging ecommerce markets, such as China, India, and Russia, with a more personal way to
communicate online. And consumers in markets where eBay currently has a limited presence, such as
Japan and Scandinavia, can learn about eBay and PayPal through Skype. Skype can also help streamline
cross-border trading and communications.

Excellent, so you will now be able to communicate directly with your buyers/sellers using Skype technology in eBay – I always say you buy from people you trust – this will go a long way towards helping buyers and sellers to come closer together thereby growing sales for eBay.