EBay Gambles on Google Partnership for Success of Skype, the Internet Phone Service
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 …
Context & Ripple Effects
EBay has spent the summer struggling to justify its Skype acquisition: June's round of U.S. tie-in announcements was followed within days by Techdirt arguing the plans were no more convincing than what came before (that skeptical read ran June 15, 2006). With organic monetization ideas stalling, eBay has now escalated to a structural fix — a multi-year partnership with Google, announced jointly by both companies, intended to connect users, merchants, and advertisers.
The deal lands just as Google is assembling a broader collaboration stack — hosted applications running on customers' own domains and the first components of an office suite positioned against Microsoft's collaboration gaps — giving eBay's marketplace access to Google's advertising reach at exactly the moment Google is extending beyond search.
First-order effects
- EBay's path to revenue from Skype now runs through a partner: Google's ad machinery becomes the engine meant to turn Skype calls into commercial transactions, leaving eBay dependent on terms and execution it does not fully control.
- Google gains eBay's merchant and buyer base as new territory for its advertising business, deepening a distribution advantage over rivals with no comparable marketplace tie-up.
Second-order effects
- The experts' doubt — whether enough people will actually switch to internet calling — shifts the burden onto bundled offers, pressuring eBay to push Skype into every transaction rather than sell it standalone.
- Competing marketplaces and calling services face a combined commerce-plus-communications bloc, forcing responses either through their own partnerships or by undercutting the switching cost problem eBay has yet to solve.
Third-order effects
- If large platforms increasingly rent reach from search giants instead of building audiences themselves, acquisitions like eBay's Skype purchase become bets on alliance execution rather than standalone assets — raising the stakes when integration disappoints.
- A pattern of pairing marketplaces with communications and advertising networks points toward industry structure consolidating around a few platform pairs, with smaller calling services squeezed between them.
The trend: E-commerce platforms are outsourcing user communications and monetization to search-advertising partners, making major acquisitions succeed or fail on alliance execution.