Is Skype's Asia-Pac Voodoo Ebay's Magic?

Buried in a survey on IM adoption by comScore Networks, was a little tidbit that might shed some light on why Ebay gobbled up Skype last fall. The study found that Skype was most popular in the Asia-Pacific accounting for 26 percent of IM users versus just three percent within the US.

What's so interesting is that it's the Asia-Pac that represents the key growth market for E-Bay. "Asia-Pacific is the fastest-growing user region, with markets like India, China and Korea leading the pack as Internet and broadband penetration rise," Reuters quoted Meg Whitman, Ebay's Chief Executive.

Today more than 30 million of Ebay's 181 million registered users worldwide are in the Asia-Pacific region. "These are still small markets, but as Internet usage and broadband penetration increase, we see these markets growing bigger than our top markets currently," she said.

At the same time, connecting those users to one another in the Asia-Pac is hugely expensive. Telecom costs within the Asia-Pac remain among the highest in the world. "To call a fixed line in Japan from the U.S. might cost 8 to 10 cents a minute. The same type of call in reverse -- Japan to U.S. -- might cost 30 to 50 cents a minute," says Jason Kowall, managing director at Telegeography.

With the influx of venture capital, Whitman is concerned that E-bay will face stiff competition from other online-auction sites. The ownership of Skype will be strong differentiator for Ebay. Closing deals will be facilitated if buyer and sellers can avoid high telecom charges.What's more Skype's real time communication network provides some intriguing opportunities pushing auctions out to the client. Ebay could extend the Skype interface with an "auction" tab that lets Ebay notify Skype users of new bid opportunities. Alternatively, another tab could allow Skype users to monitor existing bids.

Such a strategy may depend on the success of corporate decisions to kill Skype or countries, such as China, to block VoIP entirely. Only then will we know whether the $4.1 billion Ebay spent on Skype was a grand rip-off or a bargain basement, price grab.