In the past we’ve written about eBay’s Skype conundrum, or the trouble the former has had to successfully integrate the latter’s communication capabilities into the e-commerce giant’s web services. In the recent press release announcing that eBay plans to spin off Skype as a separate company and file for an IPO in 2010, eBay President & CEO John Donahoe admitted as much when he was quoting stating that it’s “clear that Skype has limited synergies with eBay and PayPal.”
And now Skype is being downright disintegrated from eBay’s services, starting with the UK website. This is what the dry announcement message reads (emphasis ours):
eBay is discontinuing Skype voice and chat buttons in listings as of 10th June 2009 in an effort to remove features with limited buyer and seller usage.
This change does not require any action on your part. We are just notifying you that as of June 10, you will no longer see the Skype voice and chat options when you list new items, they will not be included on the new item page, and they will no longer appear in your existing listings.
We appreciate your continued commitment to good communications with your customers.
Regards,
The eBay Team
This comes as little of a surprise now, but I couldn’t help looking up former eBay CEO Meg Whitman’s words when the acquisition news – the company acquired Skype for roughly $2.6 billion ($1.3 billion in cash and the value of 32.4 million shares of eBay stock) back in September 2005 – hit the wire:
“Communications is at the heart of e-commerce and community. By combining the two leading e-commerce franchises, eBay and PayPal, with the leader in internet voice communications, we will create an extraordinarily powerful environment for business on the net.”
Could have happened, hasn’t happened. It’s just the way things go.
(Thanks to Daryl Griffiths for the tip)
*WHY* didn’t it happen? Did they just expect it to sort of “work” spontaneously/virally? Should they have done more of a consumer education blitz or marketing campaign? Outside of the tech world, I never heard of Ebay promoting this capability. Especially going up against Craigslist, this would have been a big differentiating factor, but I’m not sure how many people knew about it.
From what I can gather, adoption rate was low from the get-go and never really picked up.
http://www.auct...y07/m11/i01/s04
I guess what I’m getting at is, what did Ebay do to try to get the adoption rate up? Could they have done more? It always seemed like they bought it without knowing how they’d use it (obvious) but then never seemed to make much of an effort. TV commercials make the most sense to me, to get the word out to the general population. Showing people being able to talk to sellers for free before making a purchase would have made a huge impact, I think, but it was never sold to people that way.
It was sold in that exact way, hence the “skype me” button in auctions.
Duuh.
Could also be a fraud/trust issue-
If a bidder uses skype to ask a seller “does the item come with a power cord” and the seller says yes and the bidder buys it but ships without it, what can one do?
There is no record of this conversation and the seller can ‘con’ a user. All the seller has to do is sell what is shown on the item description
I’ve never understood why skype doesn’t offer some sort of voice recording hosted at the server. I’d pay for that service in a heartbeat, and it would have avoided many of those types of situations.
there’s 3rd-party solution for this, G-Recorder – Skype plugin (Extra) that records skype calls and stores them along with chats in your gmail account, so they looks natively just like gtalk “past chats” look. what can be better than combining two great services using their better capabilities
This is similar to the issue of voicemail death that t4chcrunch talked about a while ago.
Why call someone when you can just leave a message that gets it done?
I thought Ebay was gonna integrate Skype as another revenue model: each seller can enable the Skype feature that calls to a telephone number (a remake of Skype out) and have a button on his auction page for people to click on and inquire. This would work great in Asia since almost no one wants to pay “fees” on transaction and frequently find ways to get around it by meeting face to face for the actual transaction after meeting on an auction sight. This would have work GREAT in China when Ebay was still competing with Taobao, and I thought that was what Ebay purchased Skype for…I was wrong I guess or Ebay was incompetent in its handling of Skype. I never thought Skype would be pushed on US users who are willing to pay fees on their transactions because it would amount to canniablization…
The synergy between Ebay and Skype never existed in the first place.
Internet sellers and buyers don’t want inter-personal audio or video chat. They just want reliable (but) faceless transactions.
On the other hand, Skype and Craigslist personal services … *that* could have been some synergy.
C.
I agree with your statement and dare to push it a bit further: part of the draw is the easy purchase coupled with the ability to play like you’re haggling fiercely for a good deal without any real confrontation (vs/ going to the bazaar and yelling back and forth with the live chicken vendor).
A big percentage of eBay’s success, imo, is that psychology – like it or not – eBay users don’t want, or like, voice. And the more outgoing crowd (targeted by this Skype/eBay combo) is already at the store…not eBay.
I think part of the lure of eBay was that you could sell stuff and/or rip people off while keeping your identity undercover for the most part.
Ebay’s purchase of Skype was nothing but a blatant handout to the same VCs that funded Ebay (Sequoia). It was obvious there was never going to be any synergy from the get-go.
This is the same with Google’s YouTube purchase… another Sequoia backed company buying another Sequoia backed company for incredulous sums not justifiable by any reasonable valuation method.
This my friends is one reason to be backed by “blue chip” VCs. You get to benefit from their shuffling of money, to fleece the public investors just like in Wall Street.
Really bz? Really? Remove your tinfoil hat and think through what you’re suggesting. Did eBay really need to give Sequoia a handout, really? Haven’t then made Sequoia hundreds of millions of dollars just by being, um, eBay? Did Google really need to give a handout to Sequoia for YouTube? Really? What would you have paid for one of the most popular, Internet-changing sites (YouTube)? 10 bucks? I think Google got a bargain.
Oh, YouTube was also started and funded by ex-PayPal people. OMG the controversy!
Sequoia didn’t fund Skype. Sequoia wasn’t involved in Skype in any way. BZ doesn’t know what he/she is talking about.
Sequoia didn’t fund eBay either (that was Benchmark). And Benchmark had nothing to do with Skype either. Does BZ just make this stuff up?
I see this as a bad move. In fact if a buyer can hear the seller’s voice it will make him feel secure. It makes online shopping a bit more personal.
It just seems that Ebay is a big idiot. I mean they could have tried harder, tried new and different things. It just seems like a case of big companies fumbling around, not being agile, and generally sucking.
I think you’re right. eBay didn’t have a clue what to do with Skype and it was never a good fit with the eBay or PayPal business models, especially taking into consideration that eBay and PayPal are so last decade.
Simply a matter of no “value added”. Those small eBay sellers (and buyers) are quick to adapt new technology in an effort to increase sales (re: $$). If Skype had had a value added compontent – even a hidden one – it would have been discovered and used by now. Nothing there – so it is gone….
Very interesting. Nice Article.
I have bought THOUSANDS of Items from Ebay, But Never sold one. The SELLING Price of Items I buy has dropped Dramatically in the past 16 months or so. Many sellers I prefer to buy from have given up due to the DRAMATICALLY increased fees for posting items that will sell for under twenty dollars. NOW Ebay has Declining Sales so they believe that by increasing seller fees and reducing features will help increase sales? How can I complain though? If the Ebay Execs were doing their jobs, I’d be shelling out twice as much money for the items I need for my business.
So why would eBay pull these links just before selling Skype? What was so urgent that they would risk hurting Skype’s value?
I’ve been trading on eBay since 1998. The last thing I want or need is to contact the seller via voice, or have the buyer contact me (for the occasional item I sell).
In fact, I thought the acquisition was a bad idea from the get-go. Adding Skype to eBay’s site is an afterthought, not a huge step forward for eBay’s core service. Based on the price eBay paid, this was a ridiculous decision.
Not at all surprised that it blew up.
I think this is great. eBay is going back to their core business, an online auction company, THE LEADING online auction company.
StubleUpon, Skype and others were a bad buy from a previously crazed CEO, although I can see where PayPal fits in so I have no problem there.
The streamlining of this business and the new CEO focussing eBay on their core business along with excellent financials since the companies inception has lead me to put my money where my mouth is.
Andy
I think the reasoning behind the Skype purchase is sound, just not for a consumer based company like eBay. For websites that concentrate on B2B commerce and partnerships where deals are larger and longer term, Skype or DimDim would be a perfect partner or acquisition but not for a consumer driven site…in my humble opinion.
The idea that adding Skype to eBay was going to generate over $2.6B in additional revenue doesn’t make much sense. While I have come to greatly appreciate “Contact Us” buttons on commercial web-sites, that is because there is generally someone that on the other end to talk to. With individuals selling things in Cyberspace, there is no reason to expect to be able to talk to a seller expect during the 6PM-9PM time slot. The point, made in another comment, about Skype not adding a “voicemail” capability is well taken. This is not a particularly difficult thing to do (Yahoo Messenger provides this feature).
Give that the core business of eBay is providing a platform for individuals to sell “stuff”, and the business of Skype is to provide telecommunications service that is very tied to Internet/voice technology–the marriage between these two entities seemed very problematic, from the beginning. The comment about VCs being “paid off” via this purchase seems like the most compelling explanation as to why eBay purchased Skype for that large sum of money.
Furthermore, I sent this to eBay:
—-
“Thanks eBay. Way to go! Alienate one of the most successful eBay mediums ever by forcing Auctiva to charge their customers. You forgot one tiny morsel. Personally, the only reason why I use Ebay is because of Auctiva. The eBay fees keep getting higher and higher because you “lost” direction and are more focused on pleasing your shareholders instead of your sellers, which “made” eBay to begin with. The additional fees Auctiva are forced to charge have completely squeezed me. I’m sorry, but the level of stupidity (Skype, higher fees, the buy-it-now failure, etc..) from eBay management is astonishing. Auctiva has tools that make SELLING really EASY and CONVENIENT. You get that? That’s what you want eBay. It’s about the SELLERS. Now that Auctiva has to charge fees, It’s not worth it anymore.”
you are wright, the ebay ecommerce model is dead, google is the leader to follow… i think…
This new “chat” between sellers and costumers was implemented by muncom http://www.muncom.com a year ago, with no fees. so…, muncom register 10000 stores the last moth..as I see in the Internet.
I move my cel phone store to muncom, I am happy and cost: nothing, zero… Why you have to pay to “show” your products, this is ridiculous.
I think is a copy of muncom.com
check http://www.muncom.com offers the same tools that ebay, free.