Back in September, in my first reaction to the talk of Ebay-Skype deal I wrote that Ebay is nervous because it perceives Google as a looming threat and that this could be one of the reasons behind its move to diversify by acquiring Skype.
This was when everyone thought the deal was to integrate Skype in the auction business and wondered whether there is any synergy between the two companies. Now Wall Street Journal reports that Ebay is talking to Yahoo and Microsoft (both arch rivals of Google) on how to combat the growing threat from Google.
Related links:
Reuters: Ebay in talks to fend off Google threat: report
My original post: Ebay Wants to Buy Skype? Makes Sense
Follow up posts on Ebay-Skype deal:
Skype Valuation: Why it Deserves to be High
Why Ebay Bought Skype
Skype's Revenues and The VoIP Opportunity
...until a few months ago, Ebay was the largest internet pure play business around. At around $55 billion in market cap Ebay is three times the size of Amazon and significantly larger than Yahoo. Now, all of a sudden here comes Google and before Whitman could even blink it races past Ebay to reach over $80 billion in market cap. Now that Google is poised to launch an online payment mechanism, possibly threatening Paypal (even though Google denies they would compete) - it makes eBay all the more insecure.
This was when everyone thought the deal was to integrate Skype in the auction business and wondered whether there is any synergy between the two companies. Now Wall Street Journal reports that Ebay is talking to Yahoo and Microsoft (both arch rivals of Google) on how to combat the growing threat from Google.
"After years of working closely with the search giant, eBay last year became alarmed as Google started assaulting its turf in multiple ways," the report said, including creation of a competing classified advertising service.
Related links:
Reuters: Ebay in talks to fend off Google threat: report
My original post: Ebay Wants to Buy Skype? Makes Sense
Follow up posts on Ebay-Skype deal:
Skype Valuation: Why it Deserves to be High
Why Ebay Bought Skype
Skype's Revenues and The VoIP Opportunity
3 Comments so far
eBay getting scared of Google is a justified statement and completely agree keeping in mind the track record of the Search Giant. But a thought that just passed me 'Is it justified to believe that anything and everything that comes out of Google will be a HIT!!!' ?
also a question that 'What makes Google tick again and again...'
'Is it Innnovation?', or 'the user base' or the 'product hype that they can generate' and money they can pump in to generate the hype. May be its all together combined.
But if we believe that they are going to have something similar to PayPal and still believe to overtake PayPal, then may be its a statment made in hurry.
May be the market space is big enough to have multiple payment platforms, but to expect from Google what they did in Search will be repeated again and again in other domains also isn't it something asking for too much?
Dude - hasn't it been really long since you wrote the last post? :-)
Three months and two days precisely. Yes, I've been lazy. Guess, it's time to write a new post again. :D
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