eBay To Offer Pay-Per-Lead Ads

eBay intends to integrate Skype into its auction service to further facilitate communication between buyers and sellers on the site, CEO Meg Whitman said at its Analyst Day late last week. The company also plans to use Skype to launch a pay-per-lead ad system to increase revenue on the site.

Describing the integration of PayPal and Skype with eBay as "the power of three," Whitman said that integrating Skype would help buyers connect with sellers in a simple and trusting fashion, one of eBay's chief missions. "PayPal created a simple yet incredibly powerful way to handle payments on the Web," she said. "Likewise, Skype found a whole new way to deploy voice technology to create the simplest online communications product in the world today."

Whitman also outlined eBay's plan for an ad system for the auction site, saying the firm would use Skype to create a pay-per-call-like model, with sellers in categories like autos, real estate, services and travel paying for each customer brought to them via voice communication.

Greg Sterling, principal analyst for Sterling Marketing Intelligence, said the integration of Skype to add a new revenue model was essential for eBay's growth--and has been expected since eBay purchased Skype late last year for $2.6 billion, with an additional 1.5 billion promised if the Skype meets financial targets by 2008. "This was sort of the promise of the acquisition in the first place. I'd be really surprised if they weren't going to do something like this, because they really need to monetize that $4.1 billion purchase," he said.

Sterling also agreed that a Skype-eBay combination would add another level of trust into the marketplace. "It takes some of the friction out of the buying or selling process," he said. "If I can get my question answered, or I can get confidence that this is the thing I want, it's just going to expedite."

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