Rich Karlgaard:
There’s hype and there’s skype. The difference is about $4.1 billion, which is what Ebay paid for the voice over Internet company last month. Skype is, like Ebay itself, cheap and easy to use.

Go to and click on a green balloon that says “Download Skype.” Decision time: Would you like Skype software on your Windows, Mac or Linux computer, or Pocket PC? Click on your choice. Congratulations! You’re ready to make cheap phone calls to any Skype-enabled gizmo in the world.

Ebay wants Skype so buyers and sellers in the wide world of Ebay can jump on the phone and haggle for free. The more transactions occurring on Ebay, the more money Ebay makes. Ebay’s been a huge success, of course, but its growth has slowed, and its stock has been flat. Ebay’s $4.1 billion gamble on Skype is a bet on growth. Organic growth–Skype adds only $60 million in sales on its own.

Skype, like the Netscape browser or the Apple II computer, is not the first of its kind. Vonage has offered voice over Internet since 2001, and it’s hardly a secret. Vonage has the budget to run funny ads on prime-time television. But Ebay’s purchase of Skype is a Big Bang for voice over Internet. It’s an official Wall Street coming-out party for a whole new industry, like Netscape’s IPO in 1995 and Apple’s in 1980.

Is voice over Internet a disruptive technology–in Skype’s case, a telephone killer? I think so. I would have guessed that after Ebay bought Skype, a few billion dollars of market cap might have leached out of the old telephone giants. But the market had seen the Vonage/Skype revolution coming a year ago–Mr. Market does see around corners, you know–and had quietly skimmed $30 billion away from Verizon, SBC and BellSouth before last month’s Big Bang.

It’s easy to picture the fear and loathing in telco boardrooms these days. Join the Skype revolution and cannibalize cash flow? Or call up the K Street armies and the FCC to regulate the runt out of existence? What would you do?

More here.