Skype Buy Shows eBay's Guts, Brains

Maybe eBay (EBAY) is on to something with this Skype purchase after all. The more I think about it, the more I think eBay might have just snagged the most important telecom service provider since MCI back during the period it first challenged AT&T's (T) monopoly.

And Google (GOOG), Microsoft (MSFT), Yahoo! (YHOO) -- not to mention Verizon (VZ), SBC (SBC), and Deutsche Telecom (DT) -- all have themselves a major new competitor.

Speaking of AT&T, the total purchase price that eBay just paid for Skype is almost 30% of what SBC recently paid for ... AT&T. Yes, Skype, a two-year old(!), tiny little software company that enables the transmission of voice packets over the Internet was just bought for up to $4.1 billion, depending on how well the deal works out in the next few years. Meanwhile, the oldest telecom company in the world, the company that invented voice transmission, that built the U.S. telecom networks that all packets today still touch at some point -- Ma Bell herself -- was just bought for $15 billion. What the heck is going on here?

What the heck is going on is that eBay has made a big league bet that Skype's technology will become a major telecom force and perhaps even the de facto standard for voice over Internet protocol (VoIP).

In its purest form, Skype's technology completely bypasses the old world, circuit-switched telecom network technologies, making voice truly just another application that rides over the Internet. That's a much more efficient means for voice services to be delivered, and Skype's already been downloaded over 50 million times.

Although much of the mainstream press, and eBay itself, has cited that download figure as indicative of the number of users of Skype, I think you have to divide that number by 10 to get a more realistic picture of the actual number of users because most of the registered users are people like me, who have downloaded and used Skype at some point, but don't use it on a regular basis. Also included in that 50 million plus number are users who have put the program on more than computer, but never even used it after downloading.