eBay – Skype Synergy: The Missed Viral Opportunity – Post 2 of 2

ebaylogoTo: Meg Whitman,
CEO, eBay

That was quite the quarterly report; lots of good news. Congratulations to the entire eBay team (including Skype, of course). But there is the Skype monetization issue to address. Following up on my other post Wednesday, I think I found one way to contribute to this while at CES. Bottom line: it can bring in more Skype registrations of eBay members (@ $0.38 Skype revenue per account per quarter), increase the fun and enthusiasm associated with participating in eBay auctions while minimizing desktop real estate and probably is the most virally intuitive way to justify the Skype acquisition.

In Wednesday’s post I drew attention to the eBay Tab for Skype available for eBay U.S. members. It has significant usability issues and definitely results in a negative user experience. You mentioned in the analyst conference call Wednesday that priorities for 2007 include a focus on improving the user experience and experimenting with Skype to increase the fun and excitement associated with an auction. (BTW, Jordan Banks, Managing Director for Canada, at a presentation in Toronto last night, reinforced that theme when he talked about the importance of understanding user behavior and finding an action point within 2 clicks.)

One of your eBay and Skype developer partners, Germany-based PamConsult, has already developed a solution. (Their Pamela-Systems Call Recorder is ranked third in terms of Skype Extras Downloads.) In fact, their eBay Skype Tab has been licensed by eBay Germany, eBay France and eBay U.K. Based on the slide show of screen shots below enhanced by an accompanying video and a discussion with one of the principles of PamConsult at CES, their eBay Tab for Skype:

  • provides a positive user experience,
  • allows an eBay member to carry out ALL their major eBay activities within a Skype Tab and
  • basically elevates their eBay activity to the level of Skype IM activity within the Skype client both in terms of delivering real time information and creating a truly interactive experience
  • has the potential to virally drive Skype subscriptions by eBay members.

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The user experience provided by this version of an eBay Skype Tab brings to the table:

  • a user login that is accessible and visible — note the same screen also shows the day’s top auctions
  • an eBay search capability for logged-in members
  • complete item descriptions with the Tab itself (no need to open a web browser)
  • a bid confirmation screen
  • real time notification of the upcoming end of an auction
  • options for user determined parameters
  • as well as access to My eBay
  • appeals directly to both buyers and sellers (whereas SkypeMe buttons are targeted at sellers to install on their listings)

To provide a more real time experience (pardon the German but you get the flavor):

Bottom line is that all eBay members can participate interactively in the full eBay auction process within the Skype client, obtain real time information and switch quickly between eBay and Skype activities. Did I mention it also saves on desktop real estate? And, most importantly, it has viral potential.

Merging and integrating acquisitions is not trivial; been there, participated in that! But, aside from generating more revenue for both Skype and eBay, this situation demonstrates: the developers of a product must be passionate about what they are doing. The Pamela team understands both eBay and Skype infrastructure as well as the Skype and eBay user cultures in a way that would take months if not years for an internal synergy between eBay and Skype to develop. (I have had experience with situations where “big” companies thought they could do a better job than a dedicated solution provider on an infrastructure task and eventually came back to the solution provider to get the job done right.) And it did not go unnoticed that this solution has been licensed by the two eBay European subsidiaries whom you highlighted in the analyst conference call Wednesday.

Let me do a calculation associated with monetization: Skype generates $0.38 per registered account per quarter (~$1.52 per year). With 97 million eBay U.S. members that represents a minimum sustainable market size of $148 million for Skype. Now, if one could just raise the revenue per registered account! Or considering the North American Unlimited Plan, at $29.95 per year, the market size to consider booms to over $1.4B!

BTW, PamConsult was participating in the AMD booth demonstrating eBay auctions through an ATI set top box via the Windows Media shell within Windows Vista. Imagine eBay auctions for the SuperBowl championship clothing immediately after the game!

Have a great Weekend-Before-SuperBowl!

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About Jim Courtney

Bringing over thirty years' experience in the sales, marketing and management of cutting edge technology businesses.

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