Two interesting links

I didn't see these two stories get any play today so thought you may enjoy a little weekend reading:

1. Over at MSN Money, Michael Brush has a story about eBay vs. Amazon.  Michael's macro point is to watch out for Amazon checkout vs. Paypal and speculates that Amazon will start to undercut Paypal on ACH/balance tranfsers.  This is an interesting point I wanted to highlight:
   • Amazon develops ties with merchants on many levels, so merchants may be more likely to adopt its new payment system..."  This is an important nuance and often not covered by the press.  eBay is interacting with its customers (retailers/sellers) less and less these days while Amazon is increasing that interaction.  It will be interesting to see if it leverages into adoption of things like FBA and CBA.
2. Catherine Holahan at Businessweek has an article (with nice video) that fuels speculation that Skype could be on the block.  I have to admit that I don't follow Skype that closely.  I've tried it before and it's 'ok' for some things, but unreliable enough and invasive on my desktop enough that I stopped using it.  A couple of points in this article that were new to me:
   • Only about 10% of skype's users pay anything - wow, that's either a big opportunity or a big problem, seems like by now there'd be more paying customers?!  I don't get why they don't try to turn this into a subscription style business like Vonage has and ditch the free piece.  The freemium model is valid, but not when you only monetize 10%.  Time to bite the bullet, turn off the free part of freemium and get to 100% subscribers.
   • In the video, Josh says that 6% of all global calls go through skype.  I may have misheard/interpreted this, but that's darn impressive!  It also highlights that they are vastly undercharging for this IMO.  If they have 6% of a X trillion market and are only getting 500m, that's broken.

SeekingAlpha Disclosure: I am long eBay and Google

Comments

[Steve]

Scot

While your analysis may be correct in theory you are still putting a lot of faith in ebay getting the search and systems to work properly. Betting on ebay getting this right and keeping it right and it working are as speculative as going long eBay’s stock. eBay’s as with any company or person past performance/behavior helps understand ones future performance/behavior and if you look at eBay’s track record over the past 3-5 years everything they have done has failed miserably. So the odds are this will as well. My 15%