eBay’s Skype Detour

Posted on October 1, 2007
Filed Under web 2.0 |

eBay shareholders can only hope that Skype housecleaning doesn’t stop here. The Skype acquisition never made sense strategically, and one reason Skype has struggled, we think, is that it is just a distraction to eBay (which needs desperately to focus on its core commerce business). eBay should immediately sell what’s left of Skype to Yahoo, Microsoft, or Google, all companies that offer portfolios of communications services that Skype might actually benefit from being a part of.

It might be premature to suggest that Skype is a complete failure, but having said that it does seem a stretch to suggest that it had any of the strategic value that Whitman & Co. sold investors on. I would like to see them take a page out of Amazon’s book and build a services offering around Skype like Amazon did with EC2.

Another alternative would be to consolidate the 3rd party developer community around Skype much like Webex is attempting to do with Connect. The opportunity left open by Webex is the very low end of the market, where Skype is a better fit anyways.

Either option would be a tough rock to push given that eBay seems ill-equipped to deal with developers and outside of their core market eBay has little relevance, but they do have a ton of small business customers and Skype already features a robust 3rd party ISV market.

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