eBay mulls sale of Skype
18 April 2008
eBay mulls sale of Skype
Online auction house eBay is considering selling off internet telephony operation Skype, if it fails to find a better stratagem for integration of the businesses by year end.
John Donahoe, who assumed the role of chief executive officer of eBay at the end of March, said that the company is focusing on the synergies between Skype and its main business. But if those synergies aren't regarded as strong enough, Skype's position in the eBay portfolio would be reassessed.
eBay's acquisition of Skype in 2005 is largely regarded as a $2.6bn blunder. An outlook given further weight after the auction house wrote down the value of the purchase by $1bn last year.
Throughout its lifecycle in the eBay portfolio, Skype has been referred to as a "great standalone business" and it is this 'standalone' reference that has irked eBay so much.
eBay's efforts to monetise Skype have largely fallen flat, and the unit's main source of revenue remains user purchases of Skype-out minutes, allowing subscribers to call non-Skype numbers.
Nevertheless, Skype itself continues a strong growth curve. On Wednesday the operation announced $126m in revenue for the first quarter of 2008, representing 61 per cent year over year growth. The VoIP player added 33 million registered users in the quarter, ending the period with more than 309 million registered users around the world. Skype is even expected to turn a profit sometime this year.
Last month, Josh Silverman, then CEO of Shopping.com, another eBay company, took the reins at Skype, reporting directly to John Donahoe, president and CEO-elect of eBay.
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