Very nice article at Read/Write Web about eBay and its business model. The theme of the article is that eBay as an auction site is going to continue to face tough competition, which it may or may not overcome ... but that some of the other businesses of eBay are doing extremely well, and seem positioned for the end-game. The author particularly calls out PayPal, which has been solving the problem of doing safe banking on the Internet one country at a time, and Skype, which has been growing 30-40% per year, as great businesses that are undervalued as part of eBay.
The PayPal argument is compelling to me: it's a great business, and being part of eBay creates complicated relationship issues for eBay competitors who otherwise would be great supporters of PayPay.
Skype I'm less convinced about. While I love Skype, and use it regularly, its present business model has two serious problems. First, Skype is bizarre in that it is one of the few communications business to have an inverse Metcalfe's law effect: the more people who use Skype, the less money the company will eventually earn -- because Skype calls are free if both ends use Skype. Of course, this is only a problem at the end-game, which is likely many years away, but it may be a fundamental problem eventually.
Second, Skype is in a business with relatively low barriers to entry. They have the lead in the audio and video encoding right now, and have by far the best interface ... but the telcos should be well-positioned to compete for the business if they decide to tackle VOIP in a big way. It would be scary to be Skype and to face several of the baby bells coming fast for your business.
What do you think? Do you want a chance to buy Skype of PayPal stock, or would you rather they stay safe in the eBay cocoon?
John
skype
I agree with the fact that if AT&T and Verizon starts to get into the VOIP game. In fact, Verizon is making the Hub Home Phone which uses VOIP as well as being a normal home phone. It's also able to text message, sync with all your devices, and more. I believe that if this takes off then Skype may be left in the dust.
I agree.
I absolutely agree with everyone on this post. I think skype by far is the best communication through the computer. I Would not use anything else.
Yes.
I absolutely love skype. In my opinion way better then vent,teamspeak,etc. I have been using skype for 2 months now and there is nothing else that i will use.
Excellent.
Although I can't see any other auction sites ever overcoming ebay (it's already far too established for that) I can see where Skype may have some troubles in the long run.
Thanks!
Skype
I have no doubt in my mind that if eBay continues to mistreat their clientele base, that the only chance for skype and paypal to survive is to break off on their own. I also wonder that if the services skype provides remains free if both users use it (obviously done to increase skype usage), that they will include more advertising. Maybe every five minutes you're conversation is interrupted to place in a commercial? It could happen.
Frank - acai berry diet
I'd...
Rather see skype stay with ebay. I think for the time being they can use the extra crutch. Thanks.
Shill Bidding on eBay: A Case Study
For anyone that is interested, a case study of an instance of blatant shill bidding on eBay, and a detailed comment on eBay’s apparent attitude thereto, at http://www.auctionbytes.com/forum/phpBB/viewtopic.php?t=24033
BEWARE OF EBAY!
The only things that should be separated from ebay Inc. is it's CEO and all of the yes-personel he has surrounded himself with.
With John Donahoe at the helm, ebay Inc. is doomed to further decay. With his and Meg Whitman's "Disruptive Innovation" scheme, they have been successful only at tanking ebay's stocks, angering ebay employees, shareholders and ebayers. ebay's declining numbers and it's morphing of ebay into a scammers paradise has reduced it's reputation to a new all time low.
ebay has banned sellers from stating, in their listings and in their communications to their buyers, that they will accept other forms of payments. This new policy requires the majority of members to use Paypal only, furthering ebay's monopoly and opening greater possibilities of corruption.
With Paypal now finding in favor of the ebay buyers in the VAST MAJORITY of disputes, the scamming buyers are able to keep many sellers' items AND receive refunds from Payal (taken from the sellers' accounts).
Also, Paypal (owned by ebay Inc.) has now granted itself permission to withhold any users funds for up to 180 days. Paypal retains the interest from those withheld funds, unless the seller has previously paid more fees for an additional Paypal service. There is NO effective arbitration for withheld funds. Paypal is the judge, jury & executioner.
Did you know that ebay is accepting fees for listings which will never show up in their searches and that ebay is manipulating their searches to bury sellers' listings, in favor of higher priced items from their new corporate sellers?
Did you know that ebay raised sellers' fees twice last year, yet gave their new class of sellers, the "Diamond sellers" (the corporation sellers of cheaply made, mass produced, mostly foreign items), free listings, lowered Final Value Fees and other "special" privileges?
With Whitman's & Donahoe's policy of hidden IDs, scamming sellers are free to shill bid (illegally bidding up their own prices) against honest bidders without fear of detection.
ebay's new policy of ONLY positive ratings for buyers (& hidden bidders' IDs) allows scamming buyers to continue their abuses of the sellers without ANY possibility of being discovered by their next victims.
ebay has also forced unreasonably low shipping caps on many of their sellers' items, which forces the shipping rates into the listing prices. This effectively increases ebay profits by greatly increasing the costs to both the buyers and sellers.
ebay's new Detailed Sellers Rating system (DSR) is a scam. Buyers are allowed to rate their sellers on shipping time and shipping prices, though these are more often controlled by the carriers. Bidders who've won items, yet refuse to pay, are also allowed to rate the sellers on the accuracy of the items description, shipping price and shipping time! Sellers offering Free Shipping are also receiving damaging DSR scores for their shipping prices. DSRs are based on a 5 pt rating system, yet sellers falling below 4.3 ratings from their buyers (in any of the rated categories) are being banned from selling on the site. It is obvious that the DSR system is blatantly being used by ebay to systematically remove smaller sellers (any seller smaller than Diamond Sellers and the largest of powersellers) from it's site.
These are just a few of the MANY policies of destruction which are being implemented by Donahoe. Anyone who is educated and understands what is being done to ebay, surely would have no faith in this CEO's, ability to manage ANY portion of ebay Inc.
The fast and furious, detrimental policies being thrown at the ebay users, indicates to many that these policies are deliberately being made to destroy ebay. Are the execs manipulating ebay share prices for personal gain? I don't know, but the possibility is alarming!
Want to learn more about ebay?
Search the internet for "Ebay Stockholders and Sellers Calling For Immediate Termination of John Donohoe CEO Petition" at:
http://www.petitiononline.com/jdonohoe/petition.html
ebay’s upper management reviews (horrendous)
For ebay employees' views of the poor upper management, go to:
http://www.glassdoor.com/Reviews/eBay-Reviews-E7853.htm
ebay’s CEO, Donahoe’s, DESTRUCTIVE ebay scheme:
For a better understanding of Whitman & Donahoe's "Disruptive Innovation" plot against ebay, search the internet for "eBay's Disruptive Innovation, How's that workin' for ya? — GenuineSeller" or go to:
http://genuineseller.com/ebays-disruptive-innovation-hows-that-workin-for-ya/