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Google out duels eBay-Skype by introducing Click-to-Call service. Yahoo undercuts eBay-Skype as well

Google (NASDAQ: GOOG) beats eBay Inc. to click-to-call service. eBay Inc. still hasn’t introduced the service which will enable buyers and sellers to connect through phone using Skype. eBay’s service will mainly enable the buying and selling of high ticket items. Google will implement click-to-call in its adwords program so that web surfers can call advertisers.

Here’s how it will work:

1. You click the phone icon on a advertisement.
2. You put in your phone number
3. You click ‘Connect for free’ and Google calls your number that you provided in step 2.
4. When you pick up your phone you hear a ring on the other end which will be answered by the advertiser.

The advertiser won’t get your phone number so it will be anonymous. The call will be free for the user but adwords advertisers will probably pay a fee to Google on every call initiated, just like CPC (Cost per click).
This will greatly enhance Google Local. You can put in ‘Atlanta plumber’ in Google search and get an advertisement from a local plumber with a phone number. You can also search for ‘Italian restaurants’ and by using click-to-call reserve a table as well. These are just some of the ways click-to-call will benefit. Can’t wait to see the response of this service once its fully rolled out and has a number of advertisers signed up. Google keeps doing great things and that definitely doesn’t surprise anyone.

What about eBay?

eBay Inc. (NASDAQ: EBAY) still hasn’t introduced this service in the United States, although there are reports that some eBay websites in Europe have already implemented this feature, we still haven’t seen it in the US. The question is why did eBay pay such an enormous sum for Skype? It is a well known fact that eBay paid more for the Skype name and user base than the under lying technology. If eBay only had plans to implement click-to-call on eBay they could have done it in-house or have a third party do it for them. However, eBay’s plan for Skype are much bigger. They want to expand it beyond just eBay and become a VOIP telecom company. So now eBay not only has a shopping/classified division but also Financial and telecom division which they are trying to expand beyond just eBay. We can already see that happening with Paypal. Skype just got more competition.

Yahoo Inc. answers with a service similar to Skype and Google’s probably not that far behind.

Yahoo Inc. (NASDAQ: YHOO) just introduced a similar service to Skype last week. I would give Google not more than a couple months to announce a service that will compete with Skype. Skype’s popularity is unparalleled, but its still not a household name here in the US as it is in Europe. By the way British Telecom is also aiming for Skype in Europe. Yahoo and Google still have a pretty solid chance of taking away the US market away from Skype. It’s all about marketing because the technology in this case as mentioned earlier is not that hard to figure out. Although, these VOIP tools are very popular today most people still use them to call computer to computer, and that is not where money is to be made. Skype makes its money by using Skype out which enable you to call a traditional phone number. Yahoo has this feature as well. Yahoo also undercut Skype in pricing and since there is no subscription model, what’s stopping anyone to switch to Yahoo. It will be interesting to see the response to Yahoo’s service in coming months.

The price war in the VOIP arena has just begun and keeping customers loyal to a service will be challenging. Who will win out?

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