eBays Mobile Madness Has Method

By Guy Kewney  |  Posted 2005-09-13

eBays Mobile Madness Has Method

Why are people making up conspiracy theories about eBay buying Skype? I suppose its the absurd price—but it just may be worth it.

Its all about "presence"—that magic trick of the Web, now reaching into the mobile arena, which allows people to know when to leave you a voice mail, and when to try talking.

And there really isnt anybody better than Skype at this. Except, of course, on mobile phones. Which is exactly where both Skype and eBay want to be.

The tie-in with eBay is on many levels, and, at first sight, presence isnt worth the money.

What we dont have, it seems, is a reliable way of knowing if youre bidding. Its called "sniping" in eBay circles: You start off by bidding $5 for a $50 item, and gradually over the next two days, it creeps up to $30—and then, in the last thirty seconds, people with sniper software pop up and make the winning bid—ping!—just like that, with two seconds to go.

What sniping doesnt do, however, is help the bidding go higher, and thats where Skype presence can come in. If you want to get a feel for how it works, check out Jyve. Its not hard to understand: It takes the Skype API, pulls out the "status" information of a subscriber and shows it somewhere else.

The logical place to put this function is on a Web site. For example, suppose you have sales people online; this lets you accept calls, free, over Skype, simply by putting the little tag on the Web page. Take a call and mark yourself "busy," and nobody else will waste time trying to talk.

Read more here about eBays planned Skype purchase.

Surely, I hear you say, this doesnt justify eBay spending over $2 billion to buy Skype? Actually, I hear a lot of people say it, so you arent alone.

Ive been told its madness on the same scale as the AOL takeover of Time-Warner—and thats another story. Its all too easy to look at AOL-TW financials and say "Cor, blimey, what a cockup!" but unless you can show me that you know what theyd have been without the merger, it doesnt indicate a lot... but thats a digression.

Heres the thing... for the last few weeks, Skype co-founder Niklas Zennström has been un-Skype-able. "Where has he gone?" I ask media contact Kelly Larabee.

"In a different time zone," she replies.

In fact, hes been in Taiwan, and his reason for being there is that he wants to get into mobile phones.

Weve seen part of his ploy with deals like the European tie-in with ISPs like Broadreach Networks—in which if you show up at Paddington railway station in London, you can pull out your Pocket PC and log onto the Wi-Fi hotspot there. Normally, that costs money. But if all youre doing is Skype, its free.

And you may have noticed that there are rival Skype clients for the Pocket PC that Niklas himself was using when I caught up with him there a few months back.

You can now get a soft phone from Cicero (details available here in PDF format), which, reviewers say, is better than the official one that Skype itself will give you.

Click here to read more analysis of eBays motives for the Skype purchase.

The obvious problem with Skype—or any mobile message service—is finding a way to call people. Presence on your desktop is fine, excellent, even. But its not so darned easy when youre walking along with your phone in your pocket.

Ordinary mobile SMS (Short Message Service) texts are simple: They beep. You pull the phone out, say: "Ah, the boss..." and switch the thing off so you can pretend you went out of coverage at that moment.

On a Microsoft smart phone, you find yourself automatically signed in to MSN Messenger as soon as you switch it on, which means you can initiate "texts" to other MSN users. If theyre in front of a PC screen, theyll see the Messenger flash and will click on it. But if theyre buying a hamburger, the screen is likely to flash for ages without their noticing.

Youre impressed, I can tell. But let me guess: You still dont think thats a trick worth over two billion bucks.

Next Page: Whats up eBays sleeve?

Whats up eBays Sleeve


OK, lets admit here that eBay and Skype are both playing this one close to their chests.

Lets admit that yes, its perfectly possible for a rich company to do things with its own stock which wouldnt make much sense if it were spending real dollars.

And lets also admit that, OK, maybe they put a decimal point in the wrong place, and Skype should have been sold for $200 million.

But just for fun, lets assume that Skype and eBay know something we dont. What might that be?

The value of a property, said the real estate agent last time I was buying, is "what someone will pay for it."

My house in North London may well be bigger than a cupboard in South Kensington, but the fact remains that more people are prepared to pay a million pounds for the cupboard, and therefore, thats what its worth.

If you want to buy it, you have to make sure someone else doesnt buy it.

Who else might have been thinking of buying Skype?

Heck, we went through this some weeks back, and nothing has changed: Its all about location-based marketing. To sell you bagels before you reach the bagel shop, the advertiser needs to know when you step out of the train, off the bus or out of the car park. By the time youre at your desk, its too late.

It remains to be seen whether LBS (location-based services) are going to be a commercial success. But if they are, a head start of 45 million PC owners, including an awful lot of early adopters in the comms business, could be worth a lot of revenue.

Heres one possible business plan. Suppose you have a targeted advertising system that senses when people are interested in something by reading their e-mail or watching over their shoulders when they go Web surfing. Suppose you called it Advert Sensing, and charged people a small slice of monetary salami each time someone clicked on their adverts.

And suppose you controlled the only version of Advert Sensing that also knew when people were about to walk past the bagel shop ... would you be able to sell that service to someone like eBay, do you think?

Would eBay be happy to pay you a regular stipend for this service, or would they prefer to buy the only version of Advert Sensing that worked on mobile devices?

Yes, I do think Google was interested in buying Skype, and I do think Skype was worth far more to eBay as a purchase than as a service. And where do we go from there?

Watch this space! Theres an awful lot more going to happen with instant messaging this year, and a lot of it will be on mobile devices, and mobile phones, in Europe.

Contributing columnist Guy Kewney has been irritating the complacent in high tech since 1974. Previously with PC Mag UK and ZDNet UK, Guy helped found InfoWorld, Personal Computer World, MicroScope, PC Dealer, AFAICS Research and NewsWireless. And he only commits one blog—forgiveable, surely? He can be reached at gkewney@yahoo.com.

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