The real reason why eBay bought Skype?
So when eBay bought Internet telephony service Skype a while back for rather a lot of money there were murmerings about what in the hell the auction site was thinking. We just got all excited about Skype-enabled click-to-call ads eBay’s small time sellers via Skype… then this happens:
Skype to sell EMI music on retail site
EMI Music Publishing, the song rights company, yesterday announced a deal with Skype, the internet telephony business, to sell music on Skype’s new retail website.
Under the deal, Skype will be licensed to use song copyrights from EMI’s catalogue to sell music as downloads and ring tones. It is the first time that music copyrights have been licensed worldwide in such a way. Normally licences have to be applied for by the seller on a country-by-country basis, making it more difficult for songwriters to collect payments for their work.
Skype has not yet set a launch date for its new online store. The company recently signed a deal with the Warner Bros’ group of record labels, allowing Skype use of Warner Bros’ master recordings.
As the world’s largest music publisher, EMI has more than one million copyrights, including those to some of the best-known songs ever written, such as New York, New York, Singin’ in the Rain and Over the Rainbow.
The clever folks at MIT said this would happen (as did BST, kinda — check prediction #6). Back at the time of the eBay Skype deal they wrote:
The long post in a nutshell: I think eBay wants to use Skype as a distribution platform for content, micro-paid for through PayPal and accessible on a wide range of devices… Imagine a music library into which you can dial either with your Skype, or your cell phone, or even a land line. Finally, all those “free nights and weekends” will be put to good use. Also imagine each user paying a token amount — say, $0.01 — for each content unit, a song. The sound quality is good and the transfer is fast thanks to the Skype’s distributed model. Payments are painless and barely noticeable, and are debited directly from your PayPal account. Who needs satellite radio then? Who needs (oh my God) iTunes?
To cross sell its newly purchased Internet telephony service, eBay is auctioning 10 minute calls to celebs for charity.
Bids for a ten minute conversation with Penelope Cruz were at $560 at time of writing. It’s reminiscent of the 1997(?) One2One campaign featuring people like Kate Moss talking about who they would like ‘to have a One2One with’ (hers was Elvis). For our money, pretty much the best representation of what mobile communications really mean.
This too is a cute idea but surely eBay needs to hammer home that calls via Skype are … erm … free?
The shirts that Jake Gyllenhaal and Heath Ledger took off in Brokeback Mountain have reached $29,000 on eBay.
Just one of many Brokeback Mountain related auctions — WOW has been doing a sterling job of tracking all the bad brokeback-related art as well — the shirts (cleaned but ‘still stained’) are raising money for a children’s charity.
The owner of US travel sites Orbitz and Cheaptickets, is to make its first foray into ‘traditional’ advertising.
In a nice sign o’ the times, the Financial Times article makes clear the difference between old and new marketing techniques. Cendant argues that it is investing in newspaper ads in an attempt to ‘bring brands to life’ and differentiate itself from its online rivals.
We’ve noted before how online retailers such as Lastminute and eBay have exploited offline media in an attempt to make their brands ‘huggier’ and more ‘real world’. It’s also a classic ploy to draw in any straggling technophobes out there. And we wonder how much of this is designed to placate digital immigrants who still draw a line between the online and offline worlds, unlike their kids — already digital natives who see everything glommed together.
Randy Wagner, chief marketing operating officer of Cedant draws a distinction between the ‘art and science’ of traditional and online advertising — aligning online with measurable impact and offline with emotional reach. Now all traditional marketers have to do is convince everybody else… The Wall Street Journal reported just this week: “Newspapers are losing their single biggest category of classified advertising: auto ads. Revenue from car classifieds has been falling for seven straight quarters, and analysts are beginning to wonder if the drop-off is permanent.”
A museum of personal computers is for sale on eBay.
The reluctant vendor writes on the listing:
Collecting is Fun! The birth of the Personal Computer was one of the most significant events in our history. You can have one of the most complete collections. Our collection documents the history of the PC. We also have vintage Test Equipment and Electronic/Scientific kits used by early hobbyists.
Bidding is currently at $20,000 - reserve not met.
Online auction site eBay confirmed today that it has bought Internet telephony company Skype in a £1.4bn deal.
eBay chief executive Meg Whitman said of the deal:
Communications is at the heart of e-commerce and community. By combining the two leading e-commerce franchises, eBay and PayPal (eBay’s online payment tool), with the leader in internet voice communications, we will create an extraordinarily powerful environment for business on the net.
The company said that the move would “strengthen eBay’s global marketplace and payments platform, while opening several lines of business.”
Certainly there are synergies between the two businesses. eBay’s global auction model is all about ease of communication and trust. Skype’s Voice Over Internet Protocol (VoIP) service could enable eBay traders to chat with each other far more cheaply than over traditional phone lines. Skype also has 53 million registered users and says more than two million people are using its software at any given moment. VoIP remains for the moment a bit of a ‘geek’ space technology – it’s bubbling under rather than over. But it is one that is set to explode as people get wise to the ease of use and cost savings involved.
The BBC has the full story.
Mediaguardian reports that eBay may be about to swallow up the leading Voice Over Internet company Skype.
The Guardian site picked up the story from the Wall Street Journal with neither eBay nor Skype agreeing to comment on the rumours.
The paper claims that eBay is offering between $2bn and $3bn for the company. Skype is the market leader in internet telephony and has attracted interest from companies such as Microsoft and News Corporation. The firm offers free calls to other Skype software users and charges as little as 1.1p a minute to fixed line phones in the UK. It says that an extraordinary 51 million people use its free service, while two million have signed up to pay for connections to traditional phones. Its nearest rival, Vonage, which recently launched in the UK, claims to have 700,000 customers and charges £9.99 a month for unlimited national calls, with additional charges for international and calls to mobiles.
Skype’s founders are certainly channelling the Dotcom Days in their Vanity Fair feature this month. Janus Friis and Niklas Zennstrom are pictured in what looks like a Lear Jet (sadly just the interior of the Kingly Club, London). EBay had better start counting its pennies.
See also previous post: Google Talks.
Online auctions sites such as eBay are boosting the average UK household income by about £3,000.
The Centre for Economic and Business Research (CEBR) says that buying and selling online is blossoming, with more than 50,000 people in the UK taking part. More than £4bn of trading is likely to be carried out on eBay alone this year – the equivalent of 1.3% of total UK retail sales. According to Mark Pragnell of CEBR,
“Auction sites are increasing competition, widening consumers’ choice and helping keep down inflation.”
The full story is available on the BBC site.
A woman in the States has an ad permanently tattooed on her forehead.
Kari Smith auctioned her forehead as advertising space on Ebay, a trend which continues apace, for $10,000. She claims that she is performing the permanent stunt to pay for a private education for her son:
For all the sacrifices everyone makes, this is a very small one. It’s a small sacrifice to build a better future for my son.
Tattoo artist Don Brouse claims that he and his staff spent nearly seven hours trying to talk Smith out of putting ‘GoldenPalace.com’ above her face. Smith’s auction attracted more than 27,000 hits and 1,000 watchers (or gawkers). Bidding reached $999.99 before Goldenpalace.com, an Internet gambling company based in the Mohawk Territory of Kahnawake, met Smith’s ‘buy it now’ price.
Salon reports on the whole sorry tale (watch short ad to access) and BBC news covered a similiar story back in January. Of course, forehead advertising is nothing new. Field promotion agencies in the UK have deployed needy students in this way for a while and there are now whole companies and websites dedicated to it. What is new is the extremes to which people are going — literally auctioning themselves on eBay. Maybe eBay — which was forced to take a moral line on Live8 tickets this month — should pull the plug on this particular nasty little trend.
Ad Rag believes this may be a hoax… all the more reason to stop it.
Posted in Need To Know
Time Warner is offering an ‘Ebay on TV’ feature at no charge to some 50,000 DVR subscribers in Austin, Texas.
The trial offers another form of alert if a customer has been outbid on an item. When this happens, a flashing text message appears on TV reminding the bidder to resubmit another offer via their computer.
Not news to those of us who are already sad enough to have outbid texts sent to our mobiles but hey. And still doesn’t solve the problem of having to high tail it to the nearest computer before someone else gets that sought-after pair of 70s rollerskate shoes.
It does remind me of the inspired eBay reality TV show, featuring the back stories from items traded. Sadly, it seems to have disappeared with Ebay resorting to trad TV advertising, at least in this market.
The full Mediaweek story is here.