eBays Skype Swipe Points to Emerging Services

News Analysis: Many were left wondering exactly why e-commerce specialist eBay chose to buy out VOIP provider Skype, but experts say the inherent possibilities for the auctioneer, and its rivals, illustrate the future potential for online consumer

While many people are still struggling to figure out exactly why online auctioneer eBay Inc. was ready to shell out billions of dollars to buy Internet telephony provider Skype, the company, and many industry watchers, see a wealth of potential in the deal.

According to eBay officials, the addition of Skypes technology and its 54 million subscribers was an easy way for the auction provider to create a catalog of new revenue opportunities.

/zimages/3/28571.gifDavid Coursey says eBay buying Skype makes no sense. Click here to read why.

In framing the $2.6 billion deal on Monday, eBay Chief Executive Meg Whitman said the acquisition will help drive larger numbers of transactions through the auctioneers core businesses and will immediately add Skypes $60 million in projected 2005 revenue to her companys bottom line.

Beyond the immediate opportunities for the two companies to integrate their products, allowing eBays auction customers to communicate via phone, experts say that the e-commerce specialist also joined the ranks of powerful online firms that will use VOIP (voice over IP) technology to launch a new generation of consumer services.

If those experts theories prove correct, the auctioneer will follow market leaders such as Google Inc., Microsoft Corp. and Yahoo Inc., who have all made significant investments in VOIP and entertain similar long-term aspirations.

"What were seeing here is that voice has grown from a discrete service into an application that can be embedded as part of anything people do online," said Maribel Lopez, analyst with Forrester Research. "If youre using an auction site, playing games, shopping or looking for customer care, voice will be a part of that, and it will also play an increasingly larger role in other emerging services."

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