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Sat Dec 10 2005 17:02:50

eBay's Whitman Goes Gulp over Yahoo's Skype-alike?

By: Ina Steiner

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Word was out last week that Yahoo was getting into a Skype-like service with its Instant Messenger service. (This was the best headline: "Yahoo! plans to shoot Skype with Messenger," from the Australian Financial Review.

Andy Abramson blogged about what the Yahoo service means for Skype:

Once you know what is needed to be achieved all you have to do as the competition is lower price and put pressure on the acquiring company. With Bazeley's comment about prices being lower than Skype for Yahoo's outbound calls, that puts pressure on Skype/eBay which doesn't have the network partners Yahoo has. Since all costs expended to grow the business may likely impact earnout, not just gross dollars (I am guessing on this) if you're Meg Whitman this morning and waking up reading the Bazeley column and this post, your going "gulp" and asking your new Skype team for an action plan out of the SWOT analysis they would have done pre-Skype acquisition (or should have to anticipate this move). Don't count eBay out yet folks, just know they've been hit with a serious sucker punch on the pricing schemes Yahoo has.

Andy is referring to the column in the Mercury News by Mike Bazeley.

eBay paid billions for Skype and is sending some of its most senior executives to manage the new acquisition, so eBay has a lot riding on Skype's success.

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