Seeking Alpha
Profile|
( followers)  
This Business Week article speculates that eBay (NASDAQ:EBAY) owned Skype may partner with Yahoo (NASDAQ:YHOO) to develop a mobile network using the 700Mhz spectrum; it says "industry insiders see Skype rolling out its own mobile network, possibly in cahoots with Yahoo."

I imagine this type of network would be a hybrid 3G/Wifi/VOIP network. Skype could combine its enormous VOIP user base and with Yahoo Messenger's large instant messenger user base to up-sell wireless phone and broadband service. They could effectively bypass the broadband providers to connect directly to some of their end users.

Yahoo typically tries to be a neutral force with its partners but this development would put it in direct competition with its broadband partners. How would Yahoo's broadband partners would feel about Yahoo bypassing their networks and offering a competitive service? Maybe Yahoo would make this move because they think their broadband partnership contracts are at risk? Maybe they would do it because they could partially insulate themselves from the network neutrality quality of service issue.

The partnerships continue to get even more confusing. Google (NASDAQ:GOOG) and Earthlink (NASDAQ:ELNK) have joined forced to launch municipal wifi networks. Meanwhile, Microsoft (NASDAQ:MSFT) and Yahoo announced an instant messenger interoperability partnership in October 2005 and then Google and AOL (NYSE:TWX) announced a similar partnership in December 2005 (will these partnerships ever launch?). I continue to believe that the IM and VOIP clients are one in the same.

This puts Skype is in a strong negotiating position. Skype has remained uncommitted to the YHOO/MSFT camp or the GOOG/AOL camp. If Skype chooses to work with Yahoo on this project, it effectively aligns with Yahoo and Microsoft and deepens its relationship with Yahoo. Their existing partnership already agrees that Yahoo will sell eBay inventory, Yahoo will use PayPal, and eBay will include Yahoo features in its toolbar. In addition, Yahoo Messenger and Skype already have a partnership to work on 'click-to-call' functionality.

I think eBay should use its negotiating leverage to win additional concession from Yahoo. I would like to see eBay's listings featured more prominently on Yahoo's search.

Source: Are Skype and Yahoo Launching a Mobile Network?