eBay to Acquire Skype!
Over a month ago, we wrote that:...as Google breaks into more broadband-intensive activities, Catablast! Media Group thinks GOOG may take out Skype! Networks. Apparently, Murdoch of Fox News is also interested in the revolutionary Internet-based telephony service.
On Tuesday, we still thought Google would be the buyer, saying:
...our Hold Rating on Google remains intact...Google is so cash flush, anything can happen...Google is currently trying to break into the VoIP market...we think in order to really penetrate it, the search giant will have to acquire an entrenched player like Skype! Networks. With the Vonage IPO approaching, Google simply can't afford to waste another minute.
What we didn't get right is eBay, underestimating how the auction king would jump into the mix and spell interest in VoIP.
The question is: Why is eBay on such an acquisition spree?
In 2003, the Economist wrote a terrific hypothesis:
...Whitman is concentrating on making the existing business bigger and better. For her, this has to be the way forward, not least because it is also the way that the “eBay community” is directing the firm. Mrs Whitman sees her job not just as a chief executive, but also partly as something like a mayor running a town-hall meeting...The deal would represent a dramatic shift in strategy for the world's largest online auction site.
Frankly, we don't see the synergies between eBay and Skype! -- I don't think even they do.
Over the last year and a half, eBay has entered markets such as rental-property listings, online classified-ad listings and comparison shopping.
That tells me that eBay's management thinks the auction business is plateauing.
With that said, our next call is Craig's List - which in 2003 I bet would be acquired by Yahoo (of course they weren't and I lost a couple hundred dollars).
Maybe eBay, which already owns a nice stake in Craig's List, will sweep in and buy the rest of Newmark's pseudo non-profit.
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