eBay & Skype, Redux

23 Sep ’05

Here’s the text of a post I left as a comment on a post at Fred Wilson’s blog about the eBay – Skype deal:

I think the value of the asset is seriously exaggerated. At the first sign of fees for Skype to Skype, the userbase will evaporate and flee to the next entrant to the market. This userbase is distinctively monetization-resistant, almost as a matter of pride. It’s a useless userbase unless it can be monetized, and it can’t be – not really.

And it makes no sense to acquire the userbase to acquire new eBay customers – everyone on the planet who wants to be an eBay customer now is already a customer. And the brand is strong enough to attract all the new customers it needs without the likes of a Skype.

And (as Tom [Evslin] quite rightly points out), as a technology buy it’s simply insanity [OK, a little hyperbole never hurt anyone]. If eBay wanted to be a VoIP play it could have invested one tenth the price, 6-12 months, and it would have had as good an asset. Or whatever. But not this – never this.

This deal makes no sense, IMHO.

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