Google Voice, comments by eBay's CEO dim Skype's prospects

eBay needs to do more than simply focus on Skype as a standalone company

The future does not look very bright for Skype, a day after Google announced it will launch a potential competitor and eBay's CEO said that the online auction company had basically failed in its efforts to integrate the voice-over-IP service.

Wednesday, eBay CEO John Donahoe told analysts that the company is "done apologizing for Skype" and will focus eBay "where we can win." He indicated that eBay will cease trying to integrate the service into its existing online auction offerings and focus on running Skype as an independent business. eBay acquired Skype for US$2.6 billion in 2005.

Hot on the heels of Donahoe's statements, Google announced its forthcoming Google Voice service, a revamp of GrandCentral, which it acquired back in 2007. The product was originally a personal phone management service that allowed users to have one central number that rang multiple phone numbers for a user, as well as a centralized voicemail box. Google's updates include low-cost Internet telephony services, SMS sending and retrieving, free outgoing calls to any U.S. number, and full voicemail services including voicemail transcripts.

While Google Voice is rolling out first to existing GrandCentral users before opening up to the masses, it's clear that eBay needs to do more than simply focus on Skype as a standalone company. Google has a huge pool of existing users and a history of rolling out applications that are more stable and feature-rich than Skype. eBay will need to make some serious investments in developing Skype's functionality to compete with the Google juggernaut -- or face selling the service for pennies on the dollar.

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Cyndy Aleo-Carreira

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