Will Phone Calls Eventually Be Free?

Posted on October 26, 2005

Reuters reports that Meg Whitman, the CEO of eBay, said that the cost of phone calls will trend toward zero over the next few years. eBay recently bought Skype.com, a service that provides free online phone calls, so that explains why eBay executives are thinking this will happen.

In a few short years, users can expect to make telephone calls for free, with no per-minute charges, as part of a package of services through which carriers make money on advertising or transaction fees, eBay's chief executive said on Wednesday.
Seeking to justify eBay's $4 billion purchase last week of Web-based communications phenomenon Skype Technologies, Meg Whitman countered criticism by a financial analyst during the company's quarterly conference call by agreeing with some of his points.
"The percentage of users that you can actually charge for (phone services) will actually go down, so I actually agree with that and we understood that when we looked at Skype," Whitman said in responding to the analyst's question.
"In the end, the price that anyone can provide for voice transmission on the 'Net will trend toward zero," eBay's top executive said.

Google is now also reportedly gunning for eBay with an upcoming classified and/or auction service as well as an online payment service to compete with PayPal. It looks like everything is on the table as the big players like AOL, eBay, Amazon.com, Yahoo and Microsoft compete for both users and transactions.