AuctionBytes Blog
Covering auctions, collectibles and marketplace selling.

AuctionBytes Blog The AuctionBytes Blog has been giving a voice to online merchants since its launch in 2005. Named one of the world's top 30 blogs in 2008 by "Blogging Heroes." Weigh in with your thoughts on the joys and pitfalls of selling online.
Wed Jan 21 2009 21:10:41

eBay Showcasing Skype to Potential Suitors?

By: Ina Steiner

Sponsored Link

When eBay's John Donahoe talked up Skype during a conference call with analysts, we wondered if this "great standalone business" could be slated for the chopping block. Skype had a terrific year, he said, and proceeded to tick off its performance metrics.

With his Bain management-consultant background, John has already made cuts, such as terminating the eBay Live Auctions business (as well as laying off 10% of employees and closing offices in some countries).

But when John was asked later in the call about what eBay was doing to increase shareholder value for Skype, our ears really perked up. He said he believes it is a great standalone business and getting stronger, "but the synergies between Skype and the other parts of our portfolio are minimal. So we're going to continue to run and operate the business. It's not a distraction currently. And at such time when we have further announcements on that, we'll let you know. But for now, we're very pleased at the momentum of the business, and it's not a distraction."

An announcement?? If not already in talks with suitors, it sounds like an invitation.

eBay paid $2.6 billion for Skype in 2005, and 2 years later, took a $1.4 billion write-down, an admission of what everyone else knew when the purchase price was disclosed: eBay had paid too much.

When eBay bought Skype, eBay said there were synergies among the three companies in its portfolio: eBay, PayPal and Skype. Today, eBay publicly stated that there are no such synergies.






Comments (15) | Permalink

Readers Comments

eBay Showcasing Skype to Potential Suitors?   eBay Showcasing Skype to Potential Suitors?

by: Who

Wed Jan 21 21:16:45 2009

Skype is overhyped and if donnahole has his way he will pay someone to take it.

Ebay == Penny stock by summer.

eBay Showcasing Skype to Potential Suitors?   eBay Showcasing Skype to Potential Suitors?

This user has validated their user name. by: Bob

Wed Jan 21 21:22:24 2009

And I have a distraction now too.

eBay Showcasing Skype to Potential Suitors?   eBay Showcasing Skype to Potential Suitors?

This user has validated their user name. by: Bob

Wed Jan 21 21:28:26 2009

Skype is not a distraction.
It just needs good traction.
So we have to make some action.

Donna-Baby, if you can't do it, sell Skype to me.

eBay Showcasing Skype to Potential Suitors?   eBay Showcasing Skype to Potential Suitors?

by: M. Rossky

Wed Jan 21 21:56:47 2009

Think of the customer and tech support they could have purchased with $2.6 billion. What a waste!

eBay Showcasing Skype to Potential Suitors?   eBay Showcasing Skype to Potential Suitors?

by: On Lies and Secrets

Wed Jan 21 23:19:52 2009

I don't think Skype is a bad business - it is okay for what it is - but I never saw any real synergies with the rest of ebay.  However, I think it *is* something of a white elephant despite Donohoe's claim that ''we're very pleased at the momentum of the business, and it's not a distraction.''  I don't see how it figures into the long range plan for the ebay corporation and given the current pressures on the company, if it isn't contributing greatly to enhance the whole enterprise, then it *is* a 'distraction'.

eBay Showcasing Skype to Potential Suitors?   eBay Showcasing Skype to Potential Suitors?

by: kitty

Thu Jan 22 08:45:26 2009

Heck, $2.6 billion isn't a whole lot.  They had so much left over after raising eBay selling fees and have so much in floating capital by freezing most everyone's PayPal balances for 21 days, they had extra money to purchase Bill Me Later....

No biggie

What's going to be the next announcement?
Let me guess, fee increase?

eBay Showcasing Skype to Potential Suitors?   eBay Showcasing Skype to Potential Suitors?

This user has validated their user name. by: Bob

Thu Jan 22 08:52:08 2009

Sell Skype?  Hmm.  What's that going to generate?  Some quick cash flow, and that's about it.  It's going to be hard to find a company that's willing to buy it for anything near eBay's purchase price.  They've shown that they can't monetize it well.

And any company that has the money could have, or has, already paid engineers to develop their own VOIP.

If Skype is gone, eBay shares fall even further.  They've been pumping Skype as a savior wing of their business since the purchase.

I'd think a spinoff of Skype with an IPO for it would be more in line with the company's tactics.  Give upper management options in Skype and allow them to purchase IPO shares at the initial price.

eBay Showcasing Skype to Potential Suitors?   eBay Showcasing Skype to Potential Suitors?

This user has validated their user name. by: Bob

Thu Jan 22 08:57:39 2009

When the ''Magic Cube'' catches on Skype will be worthless.

eBay Showcasing Skype to Potential Suitors?   eBay Showcasing Skype to Potential Suitors?

by: Robert Hoover, Jr.

Thu Jan 22 09:45:05 2009

If'n I remembers correctly, Skype was supposed to help buyers and sellers be in contact with one another.  Given the "new management theories" of hiding contact information, thus making 1-on-1 contact harder, methinks Skype is definitely a 'distraction' and is definitely going against eBay's management style.

Skype will either be sold or just done in.

eBay Showcasing Skype to Potential Suitors?   eBay Showcasing Skype to Potential Suitors?

by: o.c.d.collectibles

Fri Jan 23 14:11:06 2009

I'll say something really funny..LOL!...
I think I could run ebay better than it's been run this past year!

That's not saying much!


You know, it doesn't take a rocket scientist to read a little bit, or to analyze the basic financial reports on the free sites...

But...retail sectors are going bankrupt! And in the seller central thread, Griff just goes on and on about the "Nordstrom Model" of doing business...

Now, I'm no genious, but..Nordstrom is having a great deal of difficulty keeping their shirts! Their stock price per share has been diving even lower than ebay's has!

I don't think that this particular model is the one ebay should be following..
I'm afraid that they have been making WAYYYYYY too many mistakes, and sinking too many dollars into stuff that is ridiculous!
It's public knowledge that the thrift and used resale business is skyrocketing!

DUHHHHH!!! Is it me, or can anyone else see the obvious economy change that eggheadbay cannot adapt to???

eBay Showcasing Skype to Potential Suitors?   eBay Showcasing Skype to Potential Suitors?

by: unaware

Fri Jan 23 17:41:10 2009

Isn't this the sort of economy that the ''old'' eBay could have shined in? People looking for bargains that could not be found anywhere else.... now they have run off many of the unique sellers that the site used to be filled with and are replacing them with Buy.com type of sellers... with a google search why would anyone go to eBay to deal with a Buy.com when they can go directly there themselves? EBay is running toward a business model that others are already doing better. As for Skype.... add that one to Meg's many failures.

eBay Showcasing Skype to Potential Suitors?   eBay Showcasing Skype to Potential Suitors?

This user has validated their user name. by: Bidofthis.com

Fri Jan 23 22:18:32 2009

Skype + Portable Wimax = $$$$$$$

http://www.hyperconnectivity.com/en/2008/10/the-truth-a
bout.html

http://www.digitimes.com/news/a20081024PD205.html

eBay Showcasing Skype to Potential Suitors?   eBay Showcasing Skype to Potential Suitors?

by: Patricia

Sat Jan 24 16:07:01 2009

Buying Skype and overpaying too really showed the incompetent management on board at Ebay.  Now...if it goes on the block for sale you will know for sure that Ebay is in trouble (like we don't already know).  Donahoe will have to sell Skype so he can hang onto his only real moneymaker...Paypal!  It seems he's already "prepping" everyone to hear that news. After Skype is gone then the real bare bones of Ebay will begin to show ;-)

eBay Showcasing Skype to Potential Suitors?   eBay Showcasing Skype to Potential Suitors?

by: Henry

Tue Jan 27 08:10:43 2009

Ina, I have to hand it to you. You called this nearly a week earlier than the mainstream press. That's why I come here - always on top of your game!

HB

eBay Showcasing Skype to Potential Suitors?   eBay Showcasing Skype to Potential Suitors?

by: CHAN

Tue Jan 27 22:56:58 2009

Soon eBay will be delegated to the status of a national site . here's why .By placing all the proof of delivery on sellers , sellers are now forced to register everything .It's even worse internationally because registration doesn't even cover insurance that's separate . See if you can follow this example .A buyer has just bought a $15 cable off me from Belgium. Cost of Postage is $10-70 by Airmail .But now because Paypal will rebate the buyer AUTOMATICALLY his total amount if he files a "DID NOT RECEIVE ITEM" report, it has to be registered which costs another $23-15 cents . According to Autralia Post Airmail is not trackable .The only service that is trackable is ECI & that costs $50 .So eBay & Paypal you didn't even bother to check all this out with Australia Post .What a shambles , time to move on , thanks eBay for 5 years. no more international selling for me .As if a buyer is going to pay that!



Login is required to post comments.
To sign in to leave a comment using your AB Verify User Name, fill in the form below. If you have not yet signed up for AB Verify, or if you'd like more information, go to the Registration Page
.

Login for AB Verify
Be sure and use your email address and password to log in.

 
Email:
Password:
 
 Forgot Your Password?
 Even though you are signed in with the AuctionBytes Blog, you will have to sign in to the EcommerceBytes blog. But you can sign in with your existing AB Verify info.