eBay all over the news, here it is.

eBay has been all over the news with the current "collapse" of skype and the introduction of their new desktop application code named "eBay Desktop". The predications and rumors are flowing throughout the blogosphere. Rumors that mark this as a tragedy, which it is not. Let us get a few things straight before we start.



- eBay bought skype for 2.6 billion.

- eBay is the leading auction market place in the world.

- eBay has been acquiring services such as skype, stumbled upon and others.

- eBay revenues have not been up to par in the last few quarters.

- eBay has written off skype.

- eBay is hyping up their current desktop offering code named "eBay Desktop".

eBay is one of those internet darlings we associate with the likes of Google, Yahoo, Amazon and other internet super heavy weights. Since the beginning, eBay has been a consistent leader in the internet market place by becoming the leading internet auction destination. eBay has been aggressive in the last couple years with acquisition of what many would call "web 2.0" services, they include:



* June 1999 - eBay acquires Alando

* June 2003 - eBay acquires EachNet, Inc. for $150 Million (Chinese eCommerce Company)

* August 2004 - eBay acquires a 25% stake in Craig's List

* June 2004 - eBay acquires Baazee.com for $50 Million (online shopping site India)

* September 2004 - eBay acquires Internet Auction Co. for $325 Million (online auction South Korea)

* October 2004 - eBay acquires PayPal for $1.5 Billion

* November 2004 - eBay acquires Marktplaats.nl for $290 Million. (Dutch classified site.)

* December 2004 - eBay acquires Rent.com for $415 Million

* June 2005 - eBay acquires Shopping.com for $620 Million

* September 2005 - eBay acquires Skype for $2.6 Billion

* October 2005 - eBay acquires VeriSign online payment service for $370 Million

* March 2006 - eBay buys a minority stake in Meetup.com

* January 2007 - eBay purchases StubHub (ticket reseller) for $310 Million

Most of these are good moves, but, some of them are not strategically logical for eBay. The reason eBay has been hammered in the press is because they have not been growing as rapidly as they should be in the auction space. Their auction growth has slowed since they skype deal and that would make sense. eBay wanted to diversify and by doing so, they should know that some of their current business units will suffer as their focus shifted. I believe that skype is part of the problem here but not the entire problem, the numbers show it as cnet.com reports "Its subscriber base has grown from 57 million registered users in 2005 to 220 million users at the end of June 2007. That's an increase of more than 160 million registered users in less than two years. The division also recorded its second quarterly profit in a row on July 18 on revenue of $90 million." So does it seem that skype is the problem or eBay has other problems here? Don't get me wrong, it may be that skype did not reach their exact goals (This also means eBay will not have to pay a couple billion dollars to the founders and investors of skype as revenue/user targets were part of the requirements) but what is quoted above does not sound that bad. I believe that eBay will now either spin skype off as its own entity or either sells it off. Their will be many who will jump on the opportunity to own skype, some of the suitors may be MSN, Yahoo, Google, Nokia, Comcast and others. Don't be surprised if you see one of the cable or phone operators take a bid if skype does go up for sale.

eBay should really get back to business and put this one behind them. The internet has now become the source of entertainment, information gathering, and the biggest market place the world could have ever imagined. This massive growth should benefit the likes of eBay as they have been a trusted source and leading market place for many years now. Their growth has not been up to par but eBay is still growing, even with the current distractions which seemed to steer the company in the opposite direction, I think eBay needs to focus and get back to business by offering services and products that directly correlate to their core business, which is online auctions and ecommerce.

eBay is now hyping what they call is the "eBay desktop". I have not had a chance to test the "eBay desktop" as of yet, as it has been in a private beta and is being used by a "group of select users" chosen by eBay. I am sure that these users are "super buyers" or just randomly chosen. This seems to be yet another mistake by eBay. Didn't we declare the desktop dead a few years ago? We'll at least I did. Don't get me wrong, I know replacing Microsoft Word, Excel, Adobe Photo Shop and Auto CAD are not very easy to port to the web but those are exceptions. When I say the "desktop is dead" I don't mean that literally, I measure this by taking the percentage of time people spend on their actually desktop and the time they spend within their browser, in most cases the browser gets at least 80% of the attention of most consumers. What eBay needs to do is continue to make it easier and easier for buyers and sellers to conduct business, whether that means easier to post, additional fraud measures, BETTER support, BETTER response time, it does not matter, just make the experience simpler and safer, I think that is all people want.

I think Google is creeping up in the background and it is a matter of time before they bite eBay. I believe eBay needs to get its act together, if they want to continue to be an internet heavy weight and powerhouse, they need to stick within their core business and continue to improve and simplify the process otherwise just buy Yahoo!, that is, if your goal is simply internet dominance.

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