EBay Not Going Down Without a Fight

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EBay Inc., known not only for revolutionizing the online auction industry but also the way people shop, has purchased Skype - a VoIP service and software provider - for $4 billion. The implications of this acquisition reach far into the future and could help determine whether eBay will be able to defend its online success from other Internet giants.

In the past few weeks, the term VoIP (Voice over Internet Protocol) has been making the rounds as Google introduced GoogleTalk, which many speculate is just one step in the direction of establishing itself as a full-fledged VoIP provider. Shortly after that, Microsoft joined the race with its purchase of Teleo, another VoIP software and service provider. Even Yahoo has acquired its own VoIP company with its purchase of Dialpad.

Skype software allows free PC to PC calls, and a premium service allows PC to phone calls. Skype could allow eBay to offer the increasingly popular advertising service, pay per call, as well as heighten the online commerce experience by allowing buyers to communicate with sellers for free, PC to PC, while in the process of purchasing complicated products. In an online world where everything depends on newer, better ways to communicate, Skype offers eBay a way to keep users talking.

Though eBay isn't a search engine in the traditional sense, it still has to compete like one, especially when part of its main offering is being threatened. Talks of Google's introduction of a payment system to rival that of PayPal, the online payment system owned and operated by eBay, probably had eBay racing to find ways to defend its territory.

And with VoIP's increasing popularity combined with PayPal and its implications for online communications and support of online advertising endeavors such as pay per call, eBay is taking the route that other online giants are taking to maintain/further their place at the top of the online food chain: diversification.


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