“SKYPE me” sounds like an understandable reaction to the fact that a business set up just three years ago is being sold for a price that could top $4 billion (£2.2 billion). To the cognoscenti, however, the instruction to “skype me” translates as “call me for a conversation over the internet”. The verb is known already to more than 54 million people around the world who have downloaded Skype software and the number is swelling by more than 150,000 a day.

“You could think of us as the big, free internet telephony company,” Skype’s website says. “We prefer to think of ourselves as a big group hug, even a present. Yes . . . that’s it . . . we’re a present . . . but without the ribbon.”

EBay shareholders may find that gushing sentimentality jars, given the price that has been extracted from them. Rather than a group hug, the Skype founders have conducted a cool-headed auction of their business and eBay, the online auction house, put in the highest bid.

There is certainly logic in putting the two businesses together. It will, eBay says, “create an unparalleled e-commerce and communications engine for buyers and sellers around the world”. It seems that these pioneers of online trading have woken up to the idea that interaction through the good old-fashioned medium of speech might have a useful role to play in encouraging people to part with cash.

Plenty of people already buy used cars through eBay. In fact, if it wanted to regard itself as a used car seller instead of a “community built on commerce, sustained by trust and inspired by opportunity”, eBay would be the world’s biggest.

Yet Rajiv Dutta, the company’s chief financial officer, accepts that there will be some potential purchasers who would feel much more confident if they could quickly, easily and at no, or little, cost talk to the vendor. Bolting on Skype will make it possible for eBay to offer that facility, just as buying Paypal provided an efficient payment mechanism for users of the site.

Mr Dutta believes that the Skype acquisition should also bolster eBay’s share of the business-to-business market. Catering for customers who like to buy designer handbags or second-hand shoes online, as our Prime Minister’s wife has been known to do, has helped to propel eBay to revenues that will top $4 billion this year, but competition is increasing and eBay is keen to extend its reach into the B2B market. More than a quarter of Skype’s usage is among small businesses and they will no doubt soon be alerted to the procurement that they could effect at a few clicks of the mouse at eBay.

The formidable income projections for Skype enable eBay to predict that the acquisition will be earnings neutral by the fourth quarter of next year and then extremely profitable. For those who do not yet “skype”, it may be a surprise to learn that the company may only have made $7 million of revenues last year, but is predicting $60 million this year and more than $200 million in 2006.

Some will think those numbers optimistic, for Skype does not have a monopoly on voice-over-internet calls. But while all the talk of “communities” and “group hugs” may grate with those who have not yet entered the internet age, the players who are commercialising the net do believe in the power of building strong relationships with users. Whether it be Google, Yahoo, Microsoft or eBay, the aim is to become the online base for the customer, offering as many services as possible.

The Scandinavian pair who dreamed up Skype will be staying on at eBay and will be keen to maximise their earnout. EBay is banking on them coming up with more revolutionary ideas to keep customers happy.

Brown is stumped

WHILE all England was jubilantly savouring national sporting success and the capture of the Ashes yesterday, there was a whole lot less to celebrate when it came to UK plc’s international competitiveness.

Gordon Brown seems to have devoted a high proportion of his time since becoming Chancellor in 1997 to exhorting us to raise our national economic game. There have been grand conferences, where Mr Brown has assembled international business stars to address the topic. There have been working parties and committees. Nor has Mr Brown missed any opportunity to try to produce improvement through his endless tinkering with the business environment. Eight years on, though, Mr Brown’s dreams of transforming the nation’s economic potential themselves seem to be virtually in ashes.

England may be beating Australia on the cricket field, but, as the World Bank reports today, the UK is being badly outclassed as an attractive business environment by New Zealand. Worse still, the World Bank’s latest impartial assessment shows the Canadians and Danes also now racing past us as they get their economies into better shape to compete.

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