HomeBrainDump Page 5 - After Skype Sells, Will eBay Suffer Buyer`s Remorse?
Making Sense of a 3 Stage Business Plan - BrainDump
Many companies have thought seriously about acquiring Skype, but eBay and the VOIP provider have made public plans to close a deal by the end of next year. The proposed deal has everyone scratching their heads in confusion. In this internet littered with stupid business ideas, will this one stand out for its questionable foresight and nonexistent synergy?
If this all sounds absolutely crazy, you probably understand it well enough. Most people have no idea why an auction and payment company would need to buy a VOIP company. A partnership might be an interesting idea, but an acquisition? And at $4.3 billion?
Maybe eBay’s forward-thinking exceeds mine and everyone else’s, but I’ll keep my doubts until I hear a surprising announcement from eBay. In fact, I have a suspicion that eBay has a three stage business plan that looks a bit like this:
The internet is full of weird buyouts. As mentioned before, eBay buying PayPal was criticized by some since the two could have just as easily partnered. AOL's strange merger with Time Warner may soon become weirder, considering rumors of parts of the ISP joining up with MSN. Plenty of other companies have tried expanding simply by buying. Not long ago, AOL bought Winamp, a free and ad-less media player. Before that, they bought Netscape. Microsoft has a series of internet companies they bought, including webmail freebie Hotmail.
Not all of these mergers and acquisitions are bad. Buying to expand sometimes works, and sometimes doesn’t. If the business models work together, you may have a cohesive combination that furthers both companies. Adding Skype to any cable internet provider like Comcast would provide a great bundle for people who hate the phone company. Bellsouth and Verizon could have integrated the VOIP into their telephony offerings. There are many possibilities.
eBay, on the other hand, seems willing to part with a lot of money to buy a business that needs to be pushed and crammed into its plans for world domination. Skype is a round block being shoved into a square hole. Furthermore, the buyout and pending “transition” destroys the natural evolution of the Skype business. We will need another VOIP to show us how it's done.
If eBay is going to expand by buying Skype, I may not be so surprised with future business deals. Apple Computer could purchase Betty Crocker, and it would seem reasonable next to this. I could even hear Steve Jobs saying, “Well, some folks who buy iMacs use the internet to look up recipes. This acquisition is our way of bringing a Better Crocker cookbook to everyone’s desktop, with or without internet access.”
After almost every internet related business has considered buying Skype, this is the one that looks the most likely. Skype even has a news page about how great the deal sounds. Of course it sounds good to them; eBay is overbidding! After receiving Skype and plugging it in, will eBay want to leave negative feedback for it not working as expected?