| Ange1o DePa1ma 2006-08-29, 10:33 am |
| An article supporting my contention that Skype is cool, but severely
limited. From the NY Times:
EBay Gambles on Google Partnership for Success of Skype, the Internet Phone
Service
By SAUL HANSELL
Published: August 29, 2006
EBay is hoping its new partnership with Google will help it find new ways to
make money from Skype, its Internet calling service. But experts wonder if
enough people are willing to make the switch from traditional phones to
talking through their computers.
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Related
EBay Strikes an Ad Deal With Google (August 28, 2006)
A critical aspect of the deal announced yesterday is that Google will
introduce a feature that allows users to talk to advertisers by way of
Skype, instead of just clicking through to the advertisers’ Web sites. Users
of this feature, called click-to-call, would also have the option of using
Google’s own Google Talk system or standard telephones.
Early tests by several companies indicate there is a group of advertisers,
including mortgage brokers, who are willing to pay $8 to $15 for each call
from a Web searcher, roughly 10 times more than they will pay for a Web site
click. Under the Google- eBay deal, money paid by advertisers for calls
completed through Skype would be split between the two companies, although
the proportion of the split was not disclosed.
But most of these tests so far, including those by Google, are focused on
calling using regular phones, rather than calling by PC using services like
Skype. Indeed, eStara, a company that provides pay-per-call advertising
technology to companies including Verizon’s SuperPages.com unit, offers both
telephone and PC calling options. It has found that only 10 to 15 percent of
people choose to talk using their computers, and that this proportion is not
increasing.
“The vast majority of consumers want calls to be landline-based,” said John
Federman, eStara’s chief executive. PC calling requires computers that are
equipped with microphones, and a change in customer behavior.
Alex Kazim, the president of Skype, said an increasing number of computers
now came with microphones, and consumers were increasingly using them.
“We see a shift over time as users become more and more able to do voice
calling on their PC’s,” Mr. Kazim said. He pointed out that Skype had 100
million users worldwide.
EBay bought Skype last year for $2.6 billion and additional payments based
on its performance. It expects Skype to generate $200 million in revenue
this year, mainly from fees for connecting PC calls to regular telephones
and extra services like voice mail.
In an interview Sunday, Meg Whitman, eBay’s chief executive, said that the
click-to-call system could substantially increase Skype’s revenue, but she
declined to say by how much.
Skype and Google will begin testing the system next year. So far, most
pay-per-call advertising uses one of two technologies. In some, the ads
simply display a telephone number for users to call as they would any
business. But the number is used only for that advertising campaign, so each
call can be tracked. In others, users enter their phone number on the Web
and receive a call moments later from the advertiser.
Google has tested the latter system because it can record exactly what path
a user took before initiating a call.
AOL, which is using pay-per-call in its Web search ads, uses the unique
phone number approach, because it is easier to understand.
“Consumers are more interested in what they are going to say to the mortgage
broker than learning how to change behavior,” said Marc Barach, the chief
marketing officer of Ingenio, which runs the pay-per-call system used by
AOL.
Matt Booth, an analyst with the Kelsey Group, said there was a large
potential market for ads that generate voice calls, especially among small
businesses that do not do much business online.
“Sending someone to a Web site for a plumber is not as valuable as setting
up a phone call,” Mr. Booth said.
EBay is also exploring how to use voice communication on its own auction
site. So far, it has allowed sellers in some categories to add “Skype me”
buttons that let potential bidders call them using Skype. It does not charge
for this service, as it is seen as an alternative to e-mail, the usual way
sellers have answered questions.
But eBay hopes to develop new services for marketers who are simply looking
for contacts with potential customers rather than simple transactions,
charging them for every call completed.
“There is a class of goods and services where the eBay transaction model is
struggling,” said Mr. Kazim of Skype. “Real estate agents are not looking to
sell a particular house. They want you to come in, and figure out what you
need and can afford, so they can show you five houses that are right.”
The other part of the deal announced yesterday is more straightforward:
Google will sell advertising that will appear on eBay pages outside of the
United States. In May, eBay struck a similar deal for Yahoo to sell ads on
its pages in the United States. Yahoo also agreed to use eBay’s PayPal unit
as its main payments system worldwide.
Ina Steiner, the editor of AuctionBytes, a newsletter, said many eBay
sellers saw little benefit from the deals with Yahoo and Google.
“It looks like eBay is milking its auction site as a cash cow to invest in
PayPal and Skype,” Ms. Steiner said. “People are already seeing the tests
for the Yahoo ads, and they are not happy about them because they compete
with the eBay sellers.”
EBay is trying to minimize this competition by showing ads for what it calls
complementary products, like accessories, rather than for the products being
auctioned.
Ms. Steiner said most sellers saw the Skype Me feature as an imposition.
“Most sellers don’t want to talk to buyers,” she said. “They can barely keep
up with their e-mail correspondence.”
Google’s shares rose $7.69 yesterday, to close at $380.95, while eBay’s
shares rose 49 cents, to $25.79.
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