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Not all eBay sellers are sold on Skype
Internet site's top merchants mixed on whether they'll use the online calling service as sales tool.
December 8, 2005: 4:44 PM EST
By Amanda Cantrell, CNN/Money staff writer
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NEW YORK ( - EBay hopes the merchants who peddle their wares on its Web site will embrace Skype, the online calling service it bought recently, but some of the auction site's top merchants say they have no plans to use it as a sales tool.

The Internet auction site bought Skype, a Luxembourg company that allows users to make phone calls over the Internet, for $2.6 billion earlier in the quarter.

Speaking at the SG Cowen & Co. Internet conference in New York, a panel of eBay's top sellers had mixed reactions when asked if they planned to use Skype as a customer service tool on their Web sites, with the naysayers citing costs as a primary concern.

"Not in a million years," said Todd Rath, chief operating and marketing officer for online golf equipment retailer Rock Bottom Golf, one of the merchants on the panel. "We can't have the phone or Skype ringing off the hook," he said, adding that having to answer Skype calls would add to the cost of selling and pressure profits.

But Nir Hollander, president of Gem Stone King, an online jewelry store, said he plans to incorporate Skype into his platform, saying he thinks it will be especially useful for sales to overseas customers.

"I have no choice -- I need to implement this feature," he said.

EBay spokesman Hani Durzy acknowledged that Skype is not for every seller on eBay, particularly those peddling low-cost items that make for uncomplicated transactions. But sellers of big-ticket items have expressed enthusiasm about using Skype as a customer service tool, he said.

"We think a number of power sellers see the potential of this, even without having seen any integration or implementation of it," he said.

At the time of the Skype acquisition, some analysts and investors expressed concern over the transaction, citing Skype's hefty price tag.

EBay hopes that by combining Skype with its online payments business PayPal, it will create an online shopping experience that incorporates communication -- a selling point for eBay, which is considered an online community. Skype is expected to generate $200 million in revenue next year.

Skype offers software that users download to call other Skype users for free, as well as a range of paid services, such as the ability to make calls to non-Skype users, and voicemail.

Competitors are now jumping into the fray. Yahoo! said Wednesday it is launching a new version of its Yahoo Messenger instant messenger tool with calling capabilities at prices that will undercut Skype's.

EBay sparked protests from some of its smaller merchants early this year when it raised some fees for selling merchandise, according to published reports.

Rath said that while he thinks eBay is a great tool for online sales, particularly for liquidating hard-to-sell items, rising fees have made it more difficult to generate profits from selling on eBay. Rath said he is having better luck with paid search advertising on Google.

EBay is doing brisk business so far this holiday season. The e-tailer ranked number one among Web sites on "Cyber Monday," the Monday after Thanksgiving, which is becoming one of the busiest days of the year for online retailers, according to Nielsen NetRatings.


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Yahoo! to undercut Skype on call rates: More here.  Top of page

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