RSSeBay CEO: Free Phone Calls by 2010
By Ed Oswald | Published October 20, 2005, 12:31 PM
eBay CEO Meg Whitman went toe-to-toe with a financial analyst during the company's quarterly earnings conference call Wednesday over the purchase of VoIP provider Skype. Analysts have criticized the buy, saying eBay overpaid for a technology that, at least at first look, will not advance its core business.
However, Whitman disagreed with that assessment. "By combining the two leading ecommerce franchises, eBay and PayPal, with the leader in Internet voice communications, we will create an extraordinarily powerful environment for business on the Net," she said at the time.
Whitman said eBay sees a VoIP landscape where consumers will be able to place phone calls at little or no cost to them, where fees could be subsidized through advertising revenues.
Skype's success could make this possible, as it has some 57 million registered users and continues to grow. Revenues are also expected to triple next year, from $60 million to $200 million in 2006.
Whitman also said that she understood the risks of such a transaction. However, "in the end, the price that anyone can provide for voice transmission on the net will trend toward zero," she added.
Whitman said that free calling would not happen immediately, but rather gradually by the end of this decade.
Acalls a VOIP provider is already offering free
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|Part of the problem with skype is 57 million is nothing compared to the telephony network. VoIP can be compatible but it isn't across many different services. If I am a business, I don't have the time or inclination to mess with free services or fringe services, which skype really still is. Why don't we use VoIP? Just building the infrastructure for a small/medium business isn't cost effective yet. The savings aren't adding up for us, we would still need some weay to be able to get inbound calls on a known historical number.
So, free for the home user? yeah it's been that way for years. The business user still has limited options here.
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|Does anyone remember free internet? That's what will happen to VoIP market that tries to subsidize through ads. It will explode and then eventually die down, because everyone knows almost anything that's free comes with little or no customer service and that's important to people.
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|You're probably right. And then they'll stop offering it free because they'll realize they aren't making any money... Just like Netzero.
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|NetZero at least established a place in the market for themselves by their loss-leading initial offering ... many of my friends who used NetZero truly did get annoyed at the ads and eventually paid for their connection as it was convenient and they already had the software installed.
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|Yeah. Don't get me wrong. I wasn't knocking NetZero any. I'm just saying this situation will probably go a lot like that did.
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|Take a look at adcall.com/5182 and see free
VOIP service at work. Ofering advertising to adventisers with first class customer service
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|How about free gas? Can I have that instead?
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|Yes, it'll be called hydrogen powered.
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|Yeah. Also, have you heard about atomic powered cars?. A car powered off of an atomic isotope the size of half a grain of sand would have enough power to run for 2 years straight. Slap that inside a 3-foot thick iron casing and you've got a safe, efficient mode of transportation.
The only problem is most people won't go for it because they hear the word 'atomic' and think we'll all die in some doomsday-scenario explosion.
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|" where fees could be subsidized through advertising revenues"
So does this mean when I place a call I would first have to listen to 5 minutes of commercials. Does that really amount to free, afterall "Time is money"
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|Likely, they would be text or graphical ads in the application.
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|Yep! Just like the coke ads pay for your ticket before the movie starts in almost every movie theater.....wait, what? you have to pay for a ticket as well? DOH!
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|Yep - you're all correct, folks. At first, it will be "free", like Juno and NetZero were, but later they'll begin to charge for services. A CEO wouldn't talk about it so candidly and in public, right?
"Well, see... we'll offer it for free, and it will be advertisement supported... then we'll incrementally boost the amount of ads until they've become intrusive, and while we may lose a few clients in the process, those folks will be more than made up for by those who stick with the service and begin paying. Then we'll cry poor, begin charging for services (but still undercut the competition), and maybe merge with one or two less-capitalized competitors who have a similar business model..."
Another good parallel can be drawn to the TV industry - sure, it was ad supported for more than a quarter century. But now, with the advent of cable, there are charges to receive more channels (i.e. services), plus premium channels like HBO... and hey - now there's PAY-PER-VIEW!
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