eBay to Buy FedEx and Verizon?

So eBay has finally begun integrating Skype into its U.S. business, thus demonstrating the "synergy" used to justify the $4 billion acquisition.  The revelatory 1+1=>2 application?  eBay sellers can now add a "SkypeMe" button to their auctions!  Next week, perhaps, eBay will announce that it is buying Verizon and FedEx so sellers can add "Call Me!" and "Mail Me!" buttons, too.

Make no mistake: I love Skype, and I think eBay's stock is worth more because of it.  I just wish Yahoo had bought the company instead of eBay--because a tight integration with Yahoo Mail and Messenger would actually have created some real synergy.  I also don't necessarily think eBay will screw Skype up.  But I wish eBay would stop hurting its cred by trumpeting "synergy" that would have been just as easy to implement had the company not shelled out $4 billion. 

Comments

[chircu.com]

Yes, I agree with the tone of your message, Henry. In fact, obstacles to integration/synergy notwithstanding, here's how I saw the deal at its time:
http://chircu.blogspot.com/2005/09/e-bay-skype-part-i-ii.html

[billy]

SECOND BITCH!

But Bottom line is KT cant do no better than third.

King Troll you failed bigtime.

[victor]

third. nup he can't even get third

[victor]

third. nup he can't even get third

[KING TROLL]

I WAS AT THE HOSPITAL BITCHES.

[RT]

Microsoft should buy Ebay, use Paypal with it's new Windows CardSpace, then sell MSN and Skype to Yahoo (or merge them off).

Google's move into banking (Gbuy and/or Google Checkout) is a serious threat to Paypal/Mastercard/Visa online - and could replace a lot of the soon to be falling ad revenue quite quickly.

[Still Inside]

It's easy to believe that EBAY stock is move valuable with Skype than without. It's nearly impossible to believe that it's $4B more valuable. Note even $1B or $.1B for that matter. EBAY has never fully made a case for that purchase, and perhaps they never will because there isn't one.

As for GBUY cutting into PayPal's dominance, good luck. Perhaps EBAY had to make up for what was clearly a brilliant move in PayPal by making a boneheaded move like paying $4B for a napster-come-lately product like Skype.

SI

[ndame]

I attended EBAYs road show to explain the Skype acquisition. The synergies expected were so ridiculous that I refuse to believe that management was serious. Skype was a bootstrap growth purchase.

[RT]

Traffic from auctions has reached its summit, Ebay can and will find more ways to generate revenue from the auctions, but it's very finite.

Skype and PayPal are just starting their ascent.

There is critical mass in corporate VoIP and consumer VoIP now, companies converging VoIP are going to see massive growth 06/07/08 - sales of Skype handsets are going off the chart at the moment.

Payment and credential systems are going to be the one of the highest margin growth area in 07. Retailers are sick of Mastercard/Visa and the merchant providers they have to go through to access them. Consumers are sick of having to type card details into to ecommerce sites. This is going to be massive - as Microsoft (Windows CardSpace) and Google (GBuy) know.

Whilst I argue that Microsoft is damaging itself because they compete in too many markets - I don't agree Ebay is overstretching itself (yet). Rather than try and show the market the synergies - Ebay should play up the strength of the component parts in isolation.

[Steve Buck]

ok, i have quite a different view of this issue and i think henry looked very naive in the financial times interview on this last week. But given his history, not suprising. ebay did not buy skype so that "ebay sellers could talk to ebay buyers" in the current model, as henry says. Seems to me that ebay is a transaction processing company, a transaction facilitator if you will. Ebay owns no product remember, its a platform for commmerce. I see skype, with paypal having the ability to process payments for products no sitting on the ebay platform. If i have a phone, linked to a financial platform, i should be able to complete a financial transaction with a 3rd party with an account on the system as well. The key for the future is how many people have accounts on the platform and how does ebay create seamless ease of use for the service to create and expand "non-web" based transaction revenue.

The yahoo discussions are old school web thoughts.

Steve

[Simon L Kelly]

Henry How long till Skype have a $20 Annual Account Keeping Fee think what extra revenue it brings to eBay & then 12months later a $3.95 a month phone access fee if only 25m Subscribers stay on to the current 100m subscribers thats a extra $1.6b a yr to eBay inc with Europe & Asia making up most subscribers.

[Richard Monté]

I'm not too sure if Skype will help grow eBay's transaction revenues in a significant way - but I do think that it could goes the other way around: eBay could help Skype grow beyond their wildest dreams. The United States, for example, seems to be a market where Skype doesn't have a foothold yet - different is the case in Europe - so the cross selling of Skype services is more likely to help Skype grow and potentially increase it's value.

Maybe the acquisition was a purely financial play?? That is... buy Skype for a few billion; help it grow several times by marketing it to the global eBay community; and then, once it's certain that Skype is *the* global VoIP platform of choice, potentially sell it to a telco for $10-15B (or more!) a few years down the line.

That wouldn't be too bad, wouldn't it?

[Neale]

Great article thank you.