When I talked to Meg Whitman last week, we used plain old telephones. But since both of us belong to the 54 million-member Skype community--a global society one joins simply by signing up to use that company's voice over Internet protocol (VoIP) service--we could have had the conversation free via laptops and our Net connections. Or she could have Skyped me (yes, it's a verb) from her computer to my land line, paying a couple of cents a minute. It would have been appropriate because eBay CEO Whitman has just spent $2.6 billion of her company's cash and stock to buy Skype, a move that seems destined to become a marker of cataclysmic change.
So what's the change, exactly? That takes some explaining. One benefit of the deal Whitman touts--the ability to vocally connect eBay buyers and sellers--seems kind of dumb. eBay's online-auction model works so well because sellers reach millions of people by simply posting an item. Having actual conversations between buyers and sellers--with all the annoyances, inefficiencies and ambiguities of real-time human interaction--might introduce friction into a process that works pretty well as is. Whitman admits that voice connections aren't needed for most transactions, but says they would be helpful for big-ticket items like cars and real estate. Still, if eBay just wanted to give buyers and sellers the ability to have these talks over the Internet (conversations that could also be conducted by, um, phones), it could have bought cheaper technology to do so.
No, something bigger is happening, and Whitman is more on point when she talks about new services that eBay hopes to develop by integrating voice into new sorts of e-commerce applications. Some of these are known as "click to call"--think of the sponsored Web links in ads that appear on Google or Yahoo search-result pages, and now picture links that connect you voice-to-voice with merchants. Whitman also hopes to leverage Skype technology with a previous big eBay acquisition, the PayPal payment service (like phone billing).
But while PayPal filled an obvious hole in eBay's business process, Skype opens up a new world for eBay. In addition to integrating the technology into online-commerce efforts, Whitman and company are promising to continue the iconoclastic stand-alone enterprise founded by the same two guys responsible for creating the notorious peer-to-peer file-sharing network Kazaa (they later sold it). Skype cofounder Niklas Zennstrom says that his mission has always been "to build the world's premier global online communications company." Now Whitman says she's committed to "fulfilling that mission, with a big assist [from eBay]."
This means much more than free phone calls (though paying bupkes for phone calls makes traditional telecoms go nuts). It means using the digital nature of VoIP to take voice communications in formerly unimaginable places, built into all sorts of software applications. Think voice mail in your e-mail in-box, and instant teleconferences. It means using the technology to establish "presence" (the ability to know who's online), since people will now indicate whether they're logged on and willing to talk. "This is the triggering of a transformation where telecom merges with software applications," says Jeff Pulver, a longtime agitator in the Internet-voice field.
Right now, VoIP is a mystery to the mainstream (a recent Harris poll found that only 13 percent of the public knew what it was; 10 percent thought it was the name of a vodka). Instead of sitting on a maturing model of selling stuff online, eBay has the chance to be the leader in shaping this exciting technology's path to ubiquity. The price was high, but who knows more about bidding than eBay?