Skype finally up for sale

ebay-skypeWe grieved when we learned that Skype had been bought by eBay. Either Google or Yahoo would've made a much better sugar daddy and had strong commitments to customer service, while eBay's public goodwill was slowly being eroded by inept practices. An official announcement will be made tomorrow, but whoever will take it over is bound to be a better owner.

Though while in Skype’s secret backyard, Skype grew in age and popularity from 53 million to 403 milion subscribers, the quality of customer experience has decreased. The application is bigger, clumsier and more prone to crashes, especially if you have extensions and plug-ins installed. Their customer support is plagued by the same issues that took the fun out of eBay: excessive automation of CSR replies (or no replies whatsoever), irresponsible advice, suffocating rules. The following is an overview of problems with other eBay properties, based on our and other people’s experiences, followed by evidence.

ebay beefs

Let me explain. Not long ago, convinced by its founder’s talk of “efficient markets”, I decided that rather than have a garage sale, I will sell my junk on eBay. I sold around 30 items and quickly learned my lesson. Though one might be tempted to see it that way, eBay is not a marketplace where you can quickly get rid of unwanted stuff (“your junk = someone else’s treasure”). Most sellers treat it no just as a different channel, but rather as an advertising medium for their wares. You succeed by hyping up your sale then waiting patiently and relisting your item until your price is met. Your price should be high enough to cover eBay’s ridiculous fees. Try selling at a low price, hoping that the auction will take off, and your merchandise will be sniped up in the last second by a low bid. No wonder “sniper” services – which will place a bid on your behalf at the last second are doing such good business!

In all my sales, I attempted to ensure customer satisfaction even at the expense of any profit. For instance, when I sold a dashboard-powered air compressor to a buyer in BC, at a cost of less than $1, he complained that shipping at $5 is far more than the cost of the item. I pointed out that cost of shipping had been disclosed in the item listing and, when he still was reluctant to pay, I decreased his bill even though I was selling at a loss. I would  In a different sale, a buyer in Quebec won an auction for a shortwave radio. He then refused to pay for more than a week, prompting me to file a non-paying-buyer claim with eBay and relist the item. I first talked to customer support who encouraged me to do so, telling me that he could not possibly leave a comment damaging my reputation and if he did, they would be removing it from my profile. After so doing, he made a payment, which I had to refund, as the item had already been listed. Angry, he proceeded with negative feedback (the only one I ever got). Even the the comment was libellous, eBay staff reneged on their promise, claiming that they could not do so.

paypal letdowns

PayPal appears to be notorious for promising buyer or seller protection, then failing to deliver. When a friend of mine needed to share his internet connection with a brand new second notebook, I suggested he purchase a router off eBay. He got a d-link for $10. I set it up for him and after a few days of complaints from him that he cannot upload photos with Picasa, I tested it and found that the router would break any upload that lasted longer than 3 seconds. That is obviously a problem difficult to diagnose, and it took me quite a bit of time, not to mention my friend’s cumulative frustration. Both PayPal and eBay declined any responsibility and refused to process any refund, even though we were within their respective term limits. The buyer also refused to refund. Faced with the potential of another retaliatory feedback, I did not bother leaving him negative feedback.

I then bought for him a second router, this time brand new and from Fon, a “movimiento” with endorsements even from Google. Though I had ordered a version of Fon that included a second ethernet port, I was sent only the first version of the product, which did not have it. They offered to refund that upon receiving, and although I did send it back, I never received a refund. Again, PayPal refused to honour its “protection” policy.

skype suckiness

Skype was purchased by eBay for $2.6bn (£1.6bn) in October 2005, but if we include payments to its Kazaa founders, the cost is closer to $3.1bn. The new buyers are rumoured to include Andreessen Horowitz, a venture firm including the whiz kid of Netscape fame and eBay board member, as well as London-based Index Ventures and Silver Lake Partners. eBay has long tried to sell Skype, after it found it to be different from its core competency and having “limited synergies”. They announced plans to spin off Skype and list its shares in the first half of 2010.

eBay held some hope of selling Skype back to its founders, Niklas Zennstrom and Janus Friis, who are fighting in court over the ownership of Skype’s core technology, but they did not meet their price, which eBay considers to be higher than $2bn. eBay has already written off $900 million.

Before eBay took it over, Skype was a nimble application which could be used to make excellent quality phone calls over the Internet, oblivious to routers, firewalls and other obstacles. Since then, it has morphed into a monster that eats up computing resources as if in a gulping contest. When I purchased a Skype In (call-back) number last year, I also purchased a North America unlimited calling plan for the entire year. Then, midway through the year, my credit card expired. My calling plan was cancelled and when I tried contacting customer support for a refund, I only got canned replies which were not relevant to the question asked.

For all these reasons, I believe almost any new owner will do a much better job at managing the growing number of Skype addicts and improve the customer experience, which is sorely needed.

Sources / More info: nyt-skype, reuters-skype, bbc-skype, cnn-skype, bloomberg-skype, wiki-emh

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