Skype Scraper

By Rick Aristotle Munarriz August 20, 2007 Comments (0)

4 Recommendations

Rest easy, Skype users. Your Web-based voice chat platform is back. eBay's (Nasdaq: EBAY) Skype suffered an outage on Thursday, preventing a majority of its users from logging in to make and receive phone calls.

The site wasn't hacked into, as some may have feared. A Windows software update simply overloaded the system when too many users had to restart their computers at the same time. The fix wasn't simple; Skype didn't get back up until Saturday.

Naturally, there are two ways to approach any outage. The first, is financial, which shouldn't be a problem for eBay. Skype may be watching more than 220 million registered users -- with millions on at any given time -- but the platform is still a small slice of eBay's revenue pie.

Skype accounts for just 2% of the net revenue at its parent company, but its growth has been stellar. Revenue has more than doubled over the past year, powered by a 94% surge in registered users. However, Skype didn't even begin turning a profit until earlier this year. (Find out how Skype contributed to eBay's past quarter by reading our Foolish take.)

Despite its bit part in the company's financials, Skype is clearly important to eBay's growth strategy. That's where outages can have more dramatic effects. If future interruptions continue, users may flock to rival platforms, or turn to more conventional Internet telephony services like Vonage (NYSE: VG).

Then again, publicized outages can also be merit badges. In its absence, consumers begin to realize how important a service like Skype is in their lives. In that sense, eBay knows outages well. It has suffered through regrettably well-publicized downtime at both PayPal and eBay in the past. Each service emerged stronger than ever.

A sticky telco service like Research In Motion's (Nasdaq: RIMM) BlackBerry suffered an email outage for several hours back in April, and you don't see folks heaving their wireless smartphones into the nearest dumpster.

Consumers seem willing to forgive and forget. For Skype's sake, let's hope that it doesn't have to apologize too much more in the future.

eBay is a pick in the Motley Fool Stock Advisor newsletter. Read all of the original recommendation reports with a free 30-day trial subscription.

Longtime Fool contributor Rick Munarriz is a satisfied eBay user with 172 positive feedbacks to show for it. He does not own shares in any of the companies in this story. He is also a member of the Rule Breakers analytical team, seeking out the next great growth stock early in its defiance. The Fool's disclosure policy never goes down.

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