Free is not a business model--unless your name is Skype

[amy]

***Free SkypeOut for US and CA*** 

May 15, 2006 | 01:29PM PST/PT

Hi…I'm Henry Gomez, the General Manager for Skype's North American business, and I'm here with some exciting news from Skype.

Starting today, if you are in the US or Canada and use Skype to make a call to any phone number in either country, you will not be charged anything for it. That's right. The best quality internet calling experience now includes free calls to any landline or cell phone within the US (including Alaska and Hawaii) and Canada.

"These calls will remain free until the end of the year so be sure to try it today. If you're not already using Skype, download it here for free.

http://www.skype.com/helloagain.html

[iron_chick]

Yeah, PayPal used to be free, too. 

[dnc_ont]

Both my parents and my wifes parents are long distance.  Sure, we have a $15 unlimited (ok, 6 hours a month I think) plan but .. I plan on bankrupting Skype by the end of the year.  ;D

I just installed it and called my wife here at home, she was upstairs.  I freaked her out, I said 'hey sexy' and she didn't know who it was..  >

[sneakymagenta]

Skype will pick up the interconnection costs of making calls to phone networks owned by other carriers, he said.

http://yahoo.reuters.com/stocks/QuoteCom..._N15301359&symbol=EBAY.O&rpc=44

Ebay or PayPal users no doubt ultimately will pick up the costs.

[mandy]

Not mentioned in this article, but another factor which could have influenced Skype's decision to drop fees is the recent announcement that Google Talk will be bundled in some Nokia mobile products.

Skype's announcement yesterday that it was offering free SkypeOut calls to landline and mobile phones in the US and Canada was either an act of desperation, part of a well-thought-out, long-term business plan, or an attempt to sabotage Vonage's upcoming IPO -- and possibly a combination of all three...

The plan is to turn freebie customers into paying customers. Skype upsells a variety of premium products, including Skype Voicemail, ringtones, and SkypeIn,...

Will the numbers pan out? It's hard to tell, but they better for Skype, because there's no way the company can start charging for calls to US and Canada now that it's offering them for free. Skype says the freebie promotion lasts until the end of the year. You can bet it'll last forever.

Skype's offer of free calls to the US and Canada can be seen not just as part of a business plan, but an act of desperation as well. In particular, it may feel the AOL behemoth breathing down its neck...

full article: http://news.yahoo.com/s/cmp/20060517/tc_cmp/187203728

[xppman]

Ebay or PayPal users no doubt ultimately will pick up the costs.

Not this just about completely X ebayer

My fees keep getting lower and lower and lower.

But since FREE is a biz model for feebay China than why
not their new HYPE telephony service too.

Ebay's marketing techniques remind me of Jr. High dope dealers.

They give you the product for FREE (to get you hooked)
them WHAM. Now it's time to pay up if you want more.

Sorry ebay... I'll just say NO. 

[stardust]

For eBay's (Nasdaq: EBAY) Skype, the move may not seem necessary -- but the more you think about it, the more it seems like a tactical stroke of genius.

http://www.fool.com/news/commentary/2006...051601.htm