Google, eBay Play Nice Over Skype

Just when you thought that eBay and Google were girding for an all out rumble, the two companies decide to bury the hatchet, and play nice. Thanks mostly to Skype, the multi-billion dollar purchase that has yielded little in terms of revenue for auction giant, eBay.

Skype’s current strategy of earning miniscule royalties by licensing its name to hardware makers or earnings pennies of termination minutes might have been great when it was an independent start-up, but as part of a giant like eBay it doesn’t move the needle. After floundering for a game plan, eBay has decided that Skype’s future is going to be “click to call,” that is true to company’s ecommerce DNA.

Skype’s Click-to-call allows you to click a hyperlink, and initiate a call to either a Skype user or use the Skype network to connect to a PSTN phone number. It has become quite popular with bloggers in particular, who embed the Skype Me button on their website.

Skype, wants to leverage its 113 million registered users to become the defacto standard for “click to calls,” Don Albert, North America General Manager for Skype told us in an early morning chat. Skype/eBay had crafted a similar deal with Yahoo previously but that was focused on the US market alone. Skype’s push in this direction can have ramifications for many start-ups who are betting that SIP will be the defacto standard for click to call.

The use of click-to-call is particularly of interest to Google, which has been mucking around with this technology for a while. This deal reflects the slow progress that project. Google and others know that click to call will open up a new source of advertisers, those who don’t have a website but work mostly on the phone.

Still it is too early to say how the click to call business is going to play out. Albert admitted that it is a new behavior and people’s habits will have to change. “Folks are used to clicking on Google and eBay, while Skypers are used to making calls, so I think we have a good shot at making it happen.”

Other Reactions/Analysis to this announcement:

Andy Abramson: Google picks up real estate inside the Skype browser. Since the Skype DevCon in June, I’ve felt that Skype is looking to be more and more an alternative browser, with communications as a focus

Russell Shaw: What this deal tells me not so much between the lines, is that by working up this deal with Skype, Google is signalling relatively modest plans for Google Talk.