EBay Bets On VoIP, But Do Sellers Want To Chat? - InformationWeek
Hardware & Infrastructure
04:55 PM
Connect Directly
Ransomware: Latest Developments & How to Defend Against Them
Nov 01, 2017
Ransomware is one of the fastest growing types of malware, and new breeds that escalate quickly ar ...Read More>>

EBay Bets On VoIP, But Do Sellers Want To Chat?

Auction company expects Skype's voice technology to broaden sales base.

Ebay Inc. is betting heavily that voice over IP will become an integral part of the E-commerce experience. EBay believes that VoIP service provider Skype Technologies SA, which the online auctioneer will acquire for $2.6 billion, will provide a way for buyers to instantly connect with sellers and will help broaden eBay's marketplace.

"By combining eBay and Skype, we can create an unparalleled E-commerce and communications engine," eBay CEO Meg Whitman said in a conference call soon after the deal was unveiled. "Skype can accelerate the velocity of trade on eBay." It potentially could generate $3.5 billion in revenue from markets that eBay traditionally has had trouble penetrating, including real estate, travel, new-car sales, and expensive collectibles, Whitman later said. Those markets require more communication capabilities than eBay currently offers and are developed through lead generation, where sellers know a lot about potential buyers. Skype will help in both areas, Whitman explained.

The question is, do eBay users--buyers and sellers alike--really want Skype? Many of eBay's top sellers apparently aren't interested in adding VoIP service to their sales models. "They can barely keep up with the E-mail that's coming in right now," says Scot Wingo, president and CEO of ChannelAdvisor Corp., which provides marketplace and auction-management software to sellers and comparison-shopping services to big companies like Best Buy Co. that liquidate stocks on eBay. "Part of eBay's success has been the simplicity," Wingo says, citing the ease of use of eBay's asynchronous queue and the anonymity it provides.

Another issue is that VoIP could accelerate eBay's so-called "gray market," items that end up being sold outside the eBay structure to avoid its seller fees. EBay has 185 million customers and estimates that in the United States alone, 724,000 people make all or most of their business earnings from eBay sales.

In last week's conference call, eBay executives rarely referred to the company's current customer base, repeatedly stressing that the Skype acquisition could broaden its E-commerce reach. "It does make sense for the very small sellers that may put up one or two pieces of antique furniture once in a while," Wingo says, adding that Shopping.com, which eBay bought in June for $635 million, also could work well with Skype. "The whole purpose going forward is expanding the community," Forrester Research analyst Maribel Lopez says.

And it might provide a model for others in E-commerce. "VoIP embedded in the online experience will be a natural fit. In the long term, it's going to be an expected capability," Lopez says. VoIP use is skyrocketing, and big Internet companies recently have made their own VoIP moves. In recent weeks, Google began offering instant messaging with VoIP capabilities, and Microsoft acquired VoIP startup Teleo Inc. Consumers already have VoIP options when buying clothes online from Lands' End. And companies like Vanguard Communications provide consulting for businesses that want to move their voice services away from traditional phone lines.

If Skype takes off on eBay, more of the E-commerce industry could be pushed to follow suit.

Comment  | 
Print  | 
More Insights
Newest First  |  Oldest First  |  Threaded View
How Enterprises Are Attacking the IT Security Enterprise
How Enterprises Are Attacking the IT Security Enterprise
To learn more about what organizations are doing to tackle attacks and threats we surveyed a group of 300 IT and infosec professionals to find out what their biggest IT security challenges are and what they're doing to defend against today's threats. Download the report to see what they're saying.
Register for InformationWeek Newsletters
White Papers
Current Issue
2017 State of IT Report
In today's technology-driven world, "innovation" has become a basic expectation. IT leaders are tasked with making technical magic, improving customer experience, and boosting the bottom line -- yet often without any increase to the IT budget. How are organizations striking the balance between new initiatives and cost control? Download our report to learn about the biggest challenges and how savvy IT executives are overcoming them.
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Flash Poll