September 18, 2005

VoIP is Not Just Another Application

No, I am not saying that; but many of the fellow bloggers’ analysis of the recent eBay/Skype deal seem to suggest that. I am sure that by now you have read the original news item and many of the subsequent analysis. eBay itself suggested one of the ways it will benefit from the acquisition – lead generation – with a iwdespread chrous of agreement. I, on the other hand, fail to see how eBay will make it happen.

Currently, eBay allows for email communication between their customers. I do not think they charge extra for this service. If they charge extra for real-time voice communication, aren’t they suggesting that voice is not just another application, but somehow it is more valuable? Apart from that, it is not clear to me how will they enforce it? Since any link in a browser can be turned into a lauchpad for Skype (and any other IM client), they have to maintain uniform charging scheme for all the applications. Since it is zero for email, it has to be the same for Skype connection.

I tried to raise this point at different times. Since I have not received any further explanation, I have to assume that my reasoning is transparently faulty. Probably this point will come up during Bloggers’ session on Tuesday in NON Fall 2005 in Boston. I hope you have made plans on being there.

PS: As a comment in one of Jeff’s posts suggest that a division of eBay in Netherlands already allows a free “Skype me” link (my translation based on the word “gratis” appearing in their blurb on Skype).

Posted by aswath at September 18, 2005 07:46 PM
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Comments

I do not think eBay will charge for voice communication between their clients. What eBay/Skype and Paypal have in mind is to create the possibility to call value-added numbers (0900 numbers in bell-head speak). This was not possible up to now on IP. But now you colud provide a Skype-me button for say MS Hotline or Sex-lines where you may see a pop-up window during the call: If you want to have more info or so (e.g. if I take this off too) you have to pay 2 bucks, do you agree. And this is now deducted from you Skyoe prepaid account.

Posted by: Richard Stastny at September 19, 2005 12:15 AM

I agree that this was one of the application of voice services that Skype announced recently. But eBay has been talking about "lead generation" for sellers like auto and real estate where immediate voice interaction will be desirable. THat is what many of the other posters are also referring. I can only imagine the negative reaction from eBay investors if they also think eBay is thinking of selling $2 per minute service. Their reaction has been pretty negative as it is.

Posted by: Aswath at September 19, 2005 05:20 AM

Aswath,

What Skype and EBay are talking about is not $2 per minute voice services, but rather $2 per lead generated. It's simply click-through advertising that resolves to a click-to-voice call. It wouldn't be charged to the customer that the advertising is directed at, but rather to the advertiser.

This is a model that already works well with text advertisements, and could work very well with voice added. And, just as you can create your own text advertisement today, and post it on your own website, and in other places, you could do the same with click-to-call voice. However, the advantage of plugging into an advertisement syndicator (like Google, or in this case EBay) would justify the extra expense of doing so.

Posted by: Alec Saunders at September 19, 2005 08:11 AM

Alec,

Your point makes sense, but what doesn't make sense is why buy Skype (Hype?) for $3 billion when you can get better or equivalent technology for far cheaper.


John Yau

Posted by: John Yau at September 19, 2005 09:59 AM

Alec:

How much does eBay charge for posting a web link currently? I submit that eBay can not charge no more than that for a "Skype me" link as well. As the Netherlands subsidiary is doing, it may even be free.

Posted by: Aswath at September 19, 2005 08:39 PM

Remember that eBay is in the transaction business. They provide the means for commerce to take place and take their cut. Skype will provide new and different avenues for this to occur.

Posted by: PhoneBoy at September 20, 2005 02:00 PM



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