Google: Say Yes to Skype, No to Expedia
Two interesting rumors about possible Google acquisitions have me rooting for one to happen and the other to vanish like an unwanted stepchild.
First, TechCrunch is talking to people who claim Google is huddling with Skype over a possible acquisition or partnership. This makes perfect sense.
The second is that Google is considering buying travel site Expedia. This, despite investors' calls for Google to diversify revenue streams, just does not seem like a good fit to me.
Circle back: I believe if Google's VOIP and unified communications ambitions were more than just a glimmer in its eye in 2005, the company might well have moved on Skype instead of eBay.
When it became clear in the last couple years that that deal was just not a good idea, I was rooting for Google to make a run for Skype even though eBay CEO Meg Whitman assured us last October at Web 2.0 that Skype remained a valued property for eBay.
Well, we know investors valued it, but eBay has done nothing but show perturbation about how much it paid for the property, which ended up being a sweet deal for the Skype execs. eBay, if you can't run with the big dogs, stay on the porch and sell stuff. But I digress.
Google's communications ambitions, as Arrington notes, include VOIP service through Gtalk, a free 411 service and GrandCentral.
Skype would be a superior replacement for Gtalk, which you know is just not working when mild-mannered Bill Gates makes snarky comments about it.
Skype is such a Google-esque service. It's free and has spread virally, with more than 280 million users worldwide. It would tuck in nicely to Google Apps, providing another weapon the company could monetize with ads the way it does on Gmail.
Skype also has a Pro version for $3 per month that Google could offer businesses as part of its $50 per user per year Google Apps Premier Edition, but honestly the free version would also play well in GAPE.
Would eBay be so keen to shed Skype that it would give it up for a bargain or would it look to gouge Google to recoup its losses? That could be a sticking point
But what would Google have to "do" for eBay, which paid $3.1 billion (what Google just paid for DoubleClick) for it three years ago and is still suffering from the decision after a near $1 billion write-down?
Conversely, a Google purchase of Expedia, one of its advertisers, would pain me. Google knows search and online advertising cold, is getting pretty good at apps and collaboration, and is trying to play in wireless.
Does Google really want to go down the road of e-commerce before it perfects its Google Apps, Android and other interests? Google Checkout is a fine service, but I don't know that Google needs to own a travel portal as a way to float a new revenue stream.
I realize there are great ad opportunities in e-commerce, especially travel, but why start buying chunks of a market like a monopoly game just to have a revenue-generating machine? Most of Google's acquisitions to date have been strategic to help the company grow.
Google bought companies like Postini and GrandCentral to integrate into its Apps portfolio. DoubleClick and YouTube have tight synergies with Google's search and ad plans, so those deals made sense.
I don't see what Google would do, if anything, with Expedia, other than let it sit there collecting ad revenue and transaction fees. Is there some sort of e-commerce play Google could make with Expedia's transaction system?
How might Google leverage Expedia's transaction platform? Could it chuck Checkout in favor of the Expedia platform the way it would likely shed Gtalk for Skype?
If Google has designs on using Expedia to bolster its current product offerings, great. But I don't think Google should do such a deal just to branch out.
Don't be one of those companies with so many fingers in so many pies that the pies start eating you.