September 13, 2005

eBay Skype an Innovative Deal

The acquisition of Skype by eBay took me by surprise. But after reading a posting on The Jeff Pulver Blog I think I understand eBay's intentions. Since 1995 communications carriers (Telco, Wireless, Cable) have embarked on acquisitions of applications companies in an attempt to extend the lifecycle of existing businesses and generate new lines of revenue. One can argue that these efforts rarely succeed.

Here we are 10 years later and an application company (eBay) just acquired a communications carrier (Skype.) It's a smart and innovative bet by eBay. In one transaction they enhance their lead in E-Commerce by integrating communications into its core applications. It helps that Syke is the next generation online carrier. But nevertheless it's a neat reversal, marking the shift of power to application early warning to communications carriers of a new order.

Jeff is right when he says that the eBay-Skype thing is transformational for communications companies. Here is the link to Jeff's posting: Some thoughts on eBayƃ‚’s Purchase of Skype -- Evidence that the Communications Revolution will be IP-Televised (and available for purchase on eBay (or downloaded for free via BitTorrent, if not Kazaa)) Long title but worth a read.

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