|Mon Oct 1 2007 22:41:15|
Skype Tops eBay's History of Bad Acquisitions
By: Ina Steiner
Add Skype to a list of bad acquisitions by eBay. Monday's announcement made it official. Arguably the only true "homerun" purchase - aside from other online marketplaces and classifieds sites - was forced upon them by its customers who chose the PayPal online payment service over eBay's own Billpoint service (another disappointing acquisition). Apparently "stick to your knitting" doesn't go over well in eBay's Department of Strategic Acquisitions.
No one was surprised that the day had come to put Skype's house in order, least of all eBay sellers who attend the company's conference each June. Last year's mantra, "The Power of Three" was replaced with this year with the phrase "Social Commerce," and Skype was hardly mentioned during the show.
I'm both amused and confused that 3 senior, long-time eBay execs have failed or bailed at Skype (it acquired the company 2 years ago). First at bat was eBay's well liked CFO Rajiv Dutta, now President of PayPal. Next up, Alex Kazim, a 9-year eBay veteran who has held leadership positions in all of eBay's businesses and who, as Senior Vice President of New Ventures at eBay, was responsible for launching eBay's international Kijiji classifieds sites. Finally, Henry Gomez is out - he will return to eBay as Senior Vice President for Corporate Affairs. Michael van Swaaij, eBays Chief Strategy Officer, will become acting CEO "until a permanent successor is found" (define permanent, please).
Long-time eBayer Jeff Jordan left PayPal last year, perhaps in fear he'd be sent to London too. (Right now, "President of Skype" does not seem like a big selling point on your resume.)
Here's a look back at some of eBay's acquisitions - please refresh my memory by leaving a comment, I'm sure I missed some.
Kurant - eBay acquired Kurant's technology and turned it into a new offering called ProStores. But a distinct lack of marketing of ProStores to its sellers would indicate eBay's ambivalence about sending sellers off the eBay site and onto their own ecommerce-enabled websites. A mystery given that merchants on ProStores still give eBay a commission on sales.
Shopping.com - A seemingly good deal, but eBay lacks focus with this comparison-shopping site.
StumbleUpon - as with many of eBay's acquisitions (excluding PayPal), the company isn't quick to take advantage of potential synergies between its properties.
Billpoint - eBay acquired Billpoint to compete with PayPal, but even after pushing it down sellers' throats, Billpoint was a dud. eBay acquired PayPal and shut down its own payment service.
Butterfield & Butterfield - The online-auction giant's acquisition of a traditional offline auction house may have sounded like a good idea, but eBay ended up selling Butterfields to Bonhams.
Kruse International - Again eBay learned the hard way that its business was online, not offline. It acquired Kruse, which sold collector cars offline, in 1999 and sold it in 2002.