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December 01, 2005

Comments

Dave Evans

Nice article, thanks Henry. I'm not familiar with the revenue model for Skype. Is it primarily call out costs? In which case, at first glance this seems self defeating as the more people who use skype, the more calls will be free. I imagine there will also be additional revenue from sale of headsets etc.

Thanks

Dave

Travis Reeder

Dave, they also have SkypeIn which allows you to purchase a phone number (with voicemail) that allows people to call your computer like it's your home phone. Very cool. And the best part is, you can buy a number in any city that they have numbers for.

That's an interesting point Henry makes about it being a name akin to Kleenex for tissue. There is a lot of value in that. I already use it, "I'll skype you.".

Brad

No way this has ever been a binary bet...I just don't believe it. It was smart of Bessemer and others to exit when they did. http://gigaom.com/2005/12/07/for-skype-one-more-headache-called-yahoo/
Ebay just needed into the game...the game being social networks, but I don't think this was the right way. The scary thing about it all is that big business doesn't get how its really going to effect everything. Even more frightening, the only real big business mind who really really gets it is Rupert Murdoch... that gives me the gibblies!

theloniousspheremonk

skype will be a huge dud. it is another commodity with a cool name. my grandma setting up voip company called bubbi phone. hb: being a moral relativist i could care less that you lied to public for your own gain. but more central to your current cicumstance, why should i listen to anything youve to say if you lost 90% of your money. i should be listening to people who make money. perhaps is time for you to find another topic. do you fish?

Steve D

Let’s speculate a little bit about how Skype and PayPal can be integrated. It’s recent news that two manufactures (Netgear and Accton) announced WiFi Skype phones. Now let’s also recall that the future of credit cards is moving towards tight integration into cell phones or more generally into handheld mobile devices. Skype phones are one class of such devices. It’s not too stretched to foresee that in 2-3 years, many more very cool gadgets will hit the market like more advanced WiFi/WiMax phones and dual CDMA/WiFi or GSM/WiFi phones (already selling in Europe) and it’s reasonable to assume that Skype will be installed on at least some of them to enable WiFi calling. Now, if PayPal is integrated into Skype, it’s likely that any device that has embedded Skype will also feature PayPal. Do you see where it’s going? Skype might be PayPal’s ticket to reach mobile payments –huge enormous market.

The size of this opportunity along can make the purchase price Ebay paid for Skype negligible. Add the potential of paid-per-call classifieds:
http://www.internetoutsider.com/2005/12/reader_bob_estr.html#comments ,
royalties from hardware makers, benefits to the core Ebay marketplace and it seems that the decision to buy Skype can propel Ebay into new growth.

The future of Internet is mobile – there are already 2 billion phones on this planet and only 1 billion computers. Many of the current phones are not based on Internet, but on closed proprietary networks with Internet access added as an afterthought add-on function. This is changing – slowly, but surely. Every device – be it mobile or not – will be built around Internet as its core and not as add-on afterthought feature. PayPal will, no doubt, want to be there and it’s so much easier to achieve with having the most widely used telephony client which enjoys the widest support from device makers. Mobile payments might even add competitive advantage to Skype as compared to Y!Messenger or MSN Messenger.

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