Acquisition opens door for

By Chris Preimesberger  |  Posted 2005-09-12 Print this article Print

better service and new offerings."> S&Ps Scott Kessler wrote in BusinessWeek Online that eBay believes the acquisition of Skype will "enhance its existing businesses by enabling greater and better communications among its current users. It also foresees new Skype offerings. We see such benefits aiding growth, particularly in emerging markets where telecommunications services are more expensive and less accessible. But, given Skypes 2004 revenues of only $7 million, we believe the price is too high. We expect the planned deal to close in the fourth quarter, pending necessary approvals." Forresters Michael Goulde said that "there are open source attempts to duplicate the Skype service. It will be worth watching to see what the net value is of what eBay acquires."
Skypes user base has grown from 4.1 million users to 44.1 million users since the first quarter of 2004, while the companys user base has increasingly used the service, from 300 million minutes to 3.9 billion minutes during the same period—an increase from 73 minutes per user to over 88 minutes per user during the period.
Skype will continue to offer its for-fee services, such as the services program, which would offer the merged eBay-Skype a cut from both the content provider as well as the user. Estonia-based Skype chief executive Niklas ZennstrÖm will report to eBay CEO Whitman and join eBays senior executive team, the two companies said in an early morning press conference. Vonage reaches a million subscribers. Click here to read more. Although it has grown quickly in two years, Skype hasnt been without some setbacks. Only last week, the government of China moved to ban the use of Skype software—in fact, all VOIP software—because it undercuts the two state-sanctioned phone companies. According to Shanghai Daily, China Telecom is collecting the identities of those who attempt to use SkypeOut to call regular phone numbers from their PCs. "Under the current relevant laws and regulations of China, PC-to-phone services are strictly regulated and only China Telecom and (the nations other fixed-line carrier) China Netcom are permitted to carry out some trials on a very limited basis," said a China Telecom official, quoted by Reuters. Skype already has announced a partnership with Tom Online in China and in Germany with E-Plus. "China is a very important market for us," Skype co-founder Janus Friis told Forbes recently. "Broadband [penetration] in China is growing very quickly. Weve had extremely good growth there, and we plan to launch many additional products in China. Tom has been a partner of ours for quite a long time—and a very good partner. So we are just continuing in pursuing that successful partnership." Check out eWEEK.coms for the latest news, views and analysis on voice over IP and telephony.

Chris Preimesberger Chris Preimesberger was named Editor-in-Chief of Features & Analysis at eWEEK in November 2011. Previously he served eWEEK as Senior Writer, covering a range of IT sectors that include data center systems, cloud computing, storage, virtualization, green IT, e-discovery and IT governance. His blog, Storage Station, is considered a go-to information source. Chris won a national Folio Award for magazine writing in November 2011 for a cover story on and CEO-founder Marc Benioff, and he has served as a judge for the SIIA Codie Awards since 2005. In previous IT journalism, Chris was a founding editor of both IT Manager's Journal and and was managing editor of Software Development magazine. His diverse resume also includes: sportswriter for the Los Angeles Daily News, covering NCAA and NBA basketball, television critic for the Palo Alto Times Tribune, and Sports Information Director at Stanford University. He has served as a correspondent for The Associated Press, covering Stanford and NCAA tournament basketball, since 1983. He has covered a number of major events, including the 1984 Democratic National Convention, a Presidential press conference at the White House in 1993, the Emmy Awards (three times), two Rose Bowls, the Fiesta Bowl, several NCAA men's and women's basketball tournaments, a Formula One Grand Prix auto race, a heavyweight boxing championship bout (Ali vs. Spinks, 1978), and the 1985 Super Bowl. A 1975 graduate of Pepperdine University in Malibu, Calif., Chris has won more than a dozen regional and national awards for his work. He and his wife, Rebecca, have four children and reside in Redwood City, Calif.Follow on Twitter: editingwhiz

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