The PhoneBoy Blog


Simplifying Telecom, Mobile Phones, Gadgets, and More!

Why eBay Bought Skype

It’s actually pretty simple. eBay is ultimately in the business of hooking people up and taking a cut of the action. eBay was making a killing on auctions, and after they bought PayPal, they also got to take a second cut of the payment made as well (i.e. the payment fee for business PayPal accounts). And since PayPal is used by things outside of eBay as well (Voxilla, for instance, takes payments by PayPal), they also get to make money outside of their auction sites. Skype gives eBay yet another channel by which to hook people up and take a cut of the action.

Imagine someone with a commercial PayPal account selling stuff on eBay. Imagine there’s a “call me” link next to the item so that potential buyers can make a call to find out more information about the product. Now imagine that gets turned into a sale. We know that eBay takes a small cut of inbound payments for commercial accounts and they make money on the listing of the item in eBay. eBay could easily charge a nominal fee for the “call me” link or some service related to it, therefore making money on three different parts of one transaction. Not a bad deal if you’re eBay.

Plenty of people think eBay overpaid for Skype. All mergers and acquisitions involve a certain amount of overpayment, that’s a given. I think it was a shrewd investment by eBay in any case.


C-List #Cybersecurity Celebrity, Podcaster, #noagenda Producer, Frequenter of shiny metal tubes, Expressor of personal opinions, and of course, a coffee achiever.