Thursday, March 29, 2007

See me, pay me: eBay blends Skype and PayPal

from Blogging Stocks by Beth Gaston Moon Filed under: Products and services, Consumer experience, Competitive strategy, eBay (EBAY), Next big thingOne of my closest friends, Liz, is a speech pathologist for young children and doesn't have much need for computers. I've taught her all about iTunes, wireless networks, and CD burning, but several months ago she introduced me to Skype. Her husband's sister and brother-in-law currently live and work in Tokyo, so the Internet telephony feature has been a lifesaver. They can remain in close contract, even with the 12-hour time difference, and it's free of charge. Plus, there's a visual element unavailable over traditional telecom wires. Earlier today, Melly Alazraki reported that online auctioneer eBay Inc. (NASDAQ: EBAY), the parent of Skype, has released a new version that incorporates the PayPal online payment feature. Skype users will now be able to transfer money back and forth using PayPal accounts, but this is only the tip of the iceberg. EBAY officials are planning on blending the two services more down the line; a spokesperson noted that "We hope that adding this capability will result in a better, more enriching experience for both Skype and PayPal users, which is crucial to extending our leadership positions in the communications and payments markets." This new feature will make it easier for my friend's sister-in-law to contribute money to her nieces' college funds (did I mention Liz is the mother of triplet girls? No wonder they don't have time to fiddle around with iTunes). EBAY shares are fractionally higher in early trading and continue to fight toward the $35 level. This is the location of the stock's 20-month moving average and is also home to hefty out-of-the-money call open interest in the April and July options series. Beth Gaston Moon is an analyst at Schaeffer's Investment Research.