Monday, September 19, 2005

eBay's Mobile Madness Has Method ?

Why are people making up conspiracy theories about eBay buying Skype? I suppose it's the absurd price—but it just may be worth it.
It's all about "presence"—that magic trick of the Web, now reaching into the mobile arena, which allows people to know when to leave you a voice mail, and when to try talking.
And there really isn't anybody better than Skype at this. Except, of course, on mobile phones. Which is exactly where both Skype and eBay want to be.
The tie-in with eBay is on many levels, and, at first sight, presence isn't worth the money.
What we don't have, it seems, is a reliable way of knowing if you're bidding. It's called "sniping" in eBay circles: You start off by bidding $5 for a $50 item, and gradually over the next two days, it creeps up to $30—and then, in the last thirty seconds, people with sniper software pop up and make the winning bid—ping!—just like that, with two seconds to go.
What sniping doesn't do, however, is help the bidding go higher, and that's where Skype presence can come in. If you want to get a feel for how it works, check out Jyve. It's not hard to understand: It takes the Skype API, pulls out the "status" information of a subscriber and shows it somewhere else.
The logical place to put this function is on a Web site. For example, suppose you have sales people online; this lets you accept calls, free, over Skype, simply by putting the little tag on the Web page. Take a call and mark yourself "busy," and nobody else will waste time trying to talk.  Surely, I hear you say, this doesn't justify eBay spending over $2 billion to buy Skype? Actually, I hear a lot of people say it, so you aren't alone. I've been told it's madness on the same scale as the AOL takeover of Time-Warner—and that's another story. It's all too easy to look at AOL-TW financials and say "Cor, blimey, what a cockup!" but unless you can show me that you know what they'd have been without the merger, it doesn't indicate a lot... but that's a digression. Here's the thing... for the last few weeks, Skype co-founder Niklas Zennström has been un-Skype-able. "Where has he gone?" He's been in Taiwan, and his reason for being there is that he wants to get into mobile phones.  We've seen part of his ploy with deals like the European tie-in with ISPs like Broadreach Networks—in which if you show up at Paddington railway station in London, you can pull out your Pocket PC and log onto the Wi-Fi hotspot there. Normally, that costs money. But if all you're doing is Skype, it's free. And you may have noticed that there are rival Skype clients for the Pocket PC that Niklas himself was using when a few months back.
You can now get a soft phone from Cicero (details available here in PDF format), which, reviewers say, is better than the official one that Skype itself will give you. The obvious problem with Skype—or any mobile message service—is finding a way to call people. Presence on your desktop is fine, excellent, even. But it's not so darned easy when you're walking along with your phone in your pocket.  Ordinary mobile SMS (Short Message Service) texts are simple: They beep. You pull the phone out, say: "Ah, the boss..." and switch the thing off so you can pretend you went out of coverage at that moment.
On a Microsoft smart phone, you find yourself automatically signed in to MSN Messenger as soon as you switch it on, which means you can initiate "texts" to other MSN users. If they're in front of a PC screen, they'll see the Messenger flash and will click on it. But if they're buying a hamburger, the screen is likely to flash for ages without their noticing.
You're impressed, I can tell. But let me guess: You still don't think that's a trick worth over two billion bucks.  OK, let's admit here that eBay and Skype are both playing this one close to their chests.  Let's admit that yes, it's perfectly possible for a rich company to do things with its own stock which wouldn't make much sense if it were spending real dollars.
But just for fun, let's assume that Skype and eBay know something we don't. What might that be? The value of a property, said the real estate agent, is "what someone will pay for it." If you want to buy it, you have to make sure someone else doesn't buy it. Who else might have been thinking of buying Skype?
Heck, we went through this some weeks back, and nothing has changed: It's all about location-based marketing. To sell you bagels before you reach the bagel shop, the advertiser needs to know when you step out of the train, off the bus or out of the car park. By the time you're at your desk, it's too late.
It remains to be seen whether LBS (location-based services) are going to be a commercial success. But if they are, a head start of 45 million PC owners, including an awful lot of early adopters in the comms business, could be worth a lot of revenue.
Here's one possible business plan. Suppose you have a targeted advertising system that senses when people are interested in something by reading their e-mail or watching over their shoulders when they go Web surfing. Suppose you called it Advert Sensing, and charged people a small slice of monetary salami each time someone clicked on their adverts.
And suppose you controlled the only version of Advert Sensing that also knew when people were about to walk past the bagel shop ... would you be able to sell that service to someone like eBay, do you think?
Would eBay be happy to pay you a regular stipend for this service, or would they prefer to buy the only version of Advert Sensing that worked on mobile devices?
Yes, I do think Google was interested in buying Skype, and I do think Skype was worth far more to eBay as a purchase than as a service. And where do we go from there?

What do you think ?


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