Monday, September 26, 2005

Bay me, Pay me, Say me

I've stayed quiet on the eBay purchase of Skype until the dust settles a little bit.

I have to say I still don't understand the logic behind the purchase. Skype was on the bleeding edge but had begun to lose focus, the more recent updates were fuzzy and didn't really bring any additional value to the product.

In hindsight you might say that the offering was already attractive to a buyer so why bother. The momentum will now shift to Yahoo, Google and Microsoft to finish what Skype started and leverage the presence aspect with tangible business benefit.

So why did eBay step up and pay out?

One statement suggests that it was a way to break in to untapped markets, South East Asia and China. An area where eBay has not really been successful.

It would appear that the plan was to piggy back off of Skype usage and expand the foot print of services offered, this would include PayPal. In the recent past I have tried to create a PayPal account here in Thailand. When I tired to do so Thailand as a country for account registration was not an option, US and Europe centric the choices were.

There is a more real stopper to the use of PayPal and eBay in the region and that is, with the exception of Singapore and Hong Kong, a distrust of any form of electronic money. Direct Debit is not widely accepted as a payment choice. Credit and Debit cards carry a standard 3.5% usage charge. Cash is King in the Land of Smiles, and elsewhere in the region.

Go to any bank at the end of the month and you will be faced with queues of people lining up to settle utilities and other bills (after queuing up to withdraw the cash from an ATM).

This is the problem that eBay needs to solve if it wishes to grow in this market space, buying a VoIP solution will not help massively, credibility of ePayment.

If the dream is to have one convenient platform where people can browse eBay, pay via PayPal and have a cheap phone call between seller and buyer, it might be some time before that dream is realised.

And what will happen to Skype now? which parts of the roadmap that others would like to see will evolve? or will the usual suspects surge and fill the gaps.

I anticipate the latter rather then the former.

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