Skype works on many levels for eBay:
– increase page views / advertising for eBay products & services
– enable better buyer-seller communication
– add to viral growth of eBay buyers/sellers via Skype’s own viral growth

there are plenty of other reasons why it works. whether or not the txn price for Skype is reasonable or not, i’m not sure there… haven’t done the math. but it’s certainly a logical possibility to consider.

(full disclosure: i used to work at PayPal, part of eBay)

- dave mcclure
http://www.simplyhired.com

I also think Ted Holmes has it exactly right in his earlier comment of selling services over Skype like astrology, tarot readings, coaching, consulting, tech-help, etc. That all fits in with eBay’s model. More appropriately, it fits in with the idea of where eBay could go next.

Companies can and do make strategic acquisitions, and they can be useful in overcoming the limitations of a saturated, maturing or commodifying market. But opportunistic acquisitions of non-core businesses reflect a shell-game mentatlity, and can rightly get management into trouble. Perhaps Skype is a good fit; I don’t know enough to comment. But EBay owes it to its investors to describe the strategic basis for the acquisition.

And Skype has been rumored as a prize for GOOG more than a few times prior.

EBay is in the business of creating markets. Communication, information, are the most important components of a functional market. Voice communication could up the level of confidence between participants. They could add a “call seller” button to auctions. This also seems like a good fit for Skype conferencing seeing as how bay-bots are shifting a once level playing field. I’m guessing there are still lots of people that like to hear a voice before plunking down their cash.

Maybe eBay bought Skype to counter GoogleTalk?

On the surface the deal makes no sense – its an admission by EBAY mgmt that their core biz (auctions) is under major competitive threat and that they dont believe the moodel is sustainable on its own going forward. its kind of like ORCL to me – ORCL said they dont see organic growth continuing, so they took all their cash and bought a bunch of different co’s in similar space and now trying to bunch it. EBAY/Skype isnt as clean as ORCL, and EBAY stock should get hit near term, but it sounds like this is just beginning of move for EBAY to start using their cash to make acquisitions so that in 3-5-7yrs EBAY will be a different company with multiple business lines. Also, Skype is a service, not a business. So I think this is just the start for EBAY – welcome to the M+A game.

Wall Street likes to see “growth”. Old line companies that just make money year after year are in disfavor and the stocks do poorly. Just track beverages or the soap industries, for example.

So when a company is a cash cow and is dominating their sector the sharks demand they expand into areas with more “potential”.
The best example is the Time, Warner Brothers, Netscape, AOL fiasco.
Not one of those mergers did anything that made sense from a business stand point.

Cnet, back in April, pointed out an interesting synergy between eBay and Skype:
http://news.com.com/Skype+dreams+for+developers/2100-7352_3-5650946.html

Here’s a quote:

“… in the works are Skype-based advice lines selling legal and medical information, astrology forecasts and other services. Paypal-style payment services for Skype have already been developed to handle micropayments involved in such transactions, potentially turning Skype into a sort of eBay for advice and dating services…”

~ ted