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Google Does Major Click To Skype Deal |
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Written by Adam Gosling
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Tuesday, 29 August 2006 |
Google and Skype
owner, eBay, have announced an exclusive deal to provide advertising
and "click-to-call" functionality in a global deal that partitions
Yahoo! out of eBay's extensive international markets restricting it to
US only.
Under the terms of the agreement Google will get exclusive rights to provide text-based advertising for eBay outside the United States, the two will also integrate the Instant Messaging and Presence functionality of their client applications. However, the two VoIP systems will remain incompatible for the time being.
The deal raises questions about Google's commitment to VoIP at least at the call termination end of the spectrum as it seems to be a move toward leveraging Skype functionality rather than promoting its own.
The "click-to-call" advertising functionality will give users the choice to use either Skype calling or Google Talk across both companies' shopping and search platforms. The click-to-call capabilities will be implemented on eBay marketplaces as well as Google's Froogle shopping site.
Money comes by way of revenue sharing, but the two Internet juggernauts declined to reveal specific details of the agreement.
The deal is something of a vindication for eBay CEO Meg Whitman (assuming it works out to be profitable) whose decision to pay a handsome price to acquire Skype for click-to-call functionality has been widely questioned and criticised.
"We're pleased to expand our long-standing relationship with Google to explore new market opportunities, like click-to-call advertising, that benefit both our communities of users," said Meg Whitman, President and CEO, eBay Inc.
"People continue to evolve how they shop, communicate and advertise online. By combining the power of eBay in ecommerce and Skype in communications with Google's leadership in search and advertising, we can increase the usefulness of the Internet for shoppers, merchants and advertisers around the world," she said.
The click-to-call advertising should get off to a start early next year, but neither eBay nor Google believes it will have any significant impact on revenues in 2007.
As eBay already has a deal with Yahoo to provide advertising in the US market, that left Google with the rest of the world to bargain with. Google's strength in global advertising no doubt made it a far better choice than Yahoo! for regions outside the US.
However, the click-to-call functionality will include the US as well as international markets which will surely put pressure on Yahoo! when the existing deal comes to an end.
When that deal was announced the two said they would "explore developing and deploying "click-to-call" advertising technologies on their respective Websites in the U.S.," it seems that exploration didn't find oil.
Click-to-call functionality is seen as a threat to traditional advertising in the Yellow Pages which many non-Internet enabled businesses rely on. Click-to-call offers an entry into Web advertising that bypasses the need for the merchant to have a website as the main contact is still by way of the phone.
The agreement will see Skype offer its users the option to download a Google Toolbar, though it will be a custom designed toolbar rather than the one typically provided by Google.
The decision to restrict interoperability to presence and text chat could be short lived with Don Albert, the North American general manager for Skype, reported as saying the integration of the two VoIP services is scheduled to go live at the end of 2007.
The agreement comes despite Google encroaching on eBays territory in recent times. In addition to its Froogle shopping site, Google made a major competitive move against eBay's online payments business, PayPal, when it launched its own service, Google Checkout earlier this year.
Meanwhile, Whitman has faced an increasingly difficult position with eBay's growth slowing considerably and merchants using the shopping portal becoming increasingly disenchanted with the service - especially following the recent hike in fees.
The company's Second Quarter revenue growth showed how much pressure Whitman was under. Growth outside the US slowed from 51 per cent in second quarter 2005 to just 24 per cent in the second quarter of 2006.
VoIP News is made possible by revenue from Google's AdWords for Content services.
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