eBay has gone on the record saying that they will sell Skype if they fail to find ways of using Skype to support its core ecommerce business.
Richard Waters at the Financial Times got the scoop directly from eBay’s CEO John Donahoe:
“What we’re testing this year are the synergies,” Mr Donahoe told the Financial Times this week after Ebay reported its latest earnings. “If the synergies are strong, we’ll keep it in our portfolio. If not, we’ll reassess it.” That could lead to the disposal of the business, he indicated.
eBay purchased Skype 3 years ago and has failed to find ways of using Skype across its other products in this time, so it is unlikely that miracles will start happening for Skype in the next 8 months. A sale is likely late this year or in the first half of next year.
The news comes despite strong Q1 figures for Skype and others reports suggesting a Google buyout or alliance may be in the works.
I think they’re leaving the door open for a Google buy.
Who will be merging with ebay? Does anyone want to predict a major merger in the works? What big players would be considered?
I had the same question about how Skype would benefit eBay when they first bought it, well except for increasing PayPal transactions. At least Skype didn’t turn out to be a bust like what AOL did to Time Warner. Google should definitely jump in, especially after their stocks jumped $20 billion in value this Friday.
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Skype is a great brand and service. If eBay can’t find a way to leverage this asset they should fire this CEO and bring in another one.
There are three areas that Skype could enter the market in the next 12 months and dominate quite easily. But, because these executives don’t understand telephony they will miss the boat.
A large Telco such as AT&T should gobble them up or an MSO like Comcast….
this is OLD news!
Good promo for Skype
Ebay will make a good profit if they sell it and focus more on the auctions.
well, as long as they don’t shut down skype – I don’t fucking care…
Skype is a great brand and I think they made the writedown on Skype prematurely, especially if something as trivial as Slide get a half a billion valuation.
However, there are no synergies between eBay and Skype.
Virgin Mobile owned Skype could go places.
Really bizarre.
When a VC looks at a prospective financing deal, they vet the company fully, turn over every stone, and examine every grain of sand under an electron microscope. It’s called due diligence and the process lasts months. And there’s a huge measure of mystery, ritual, and gravitas surrounding the whole thing. Entrepreneurs are told stuff like if they have one too many PowerPoint slides in their stack, the VCs will laugh like a buch of high school jocks, and the deal will be killed. There’s a load of solemnity, mystery, and pomposity involved. Make one misstep and you’re over. And you goddamned well better have a clear-cut revenue model that flows trippingly off your tongue so the guy with the Harvard MBA and the six science degrees can be blown away in your 2-minute elevator pitch.
But when an obese Internet giant like eBay gets the muchies and wants to gobble up a hot new tech company, they throw due diligence out the window and say, “Revenue model? We don’t need no stinkin’ revenue model!!” They buy the company first and talk revenue models three years later, before they’ve netted a red cent.
Call me naïve but this whole scenario has me laughing.
@10 – I don’t think Joe T has ever raised any money from VCs before.
However, he is right that some companies find pretty crazy reasons to buy something. There are many reasons for this including executive compensation. CEOs are sometimes incentivized to make acquisitions to grow their corporate empire. CEO salaries, bonuses, and options are in some cases levered to how large their firm’s market cap is. The bigger it gets, even if through unwise mergers, gives him/her a short term boost in compensation. When the average corporate CEO lasts no more than 2-4 years, it’s pretty easy to focus on the short term.
At any rate, they better not mess up my Skype.
Well, I am willing to make an offer if they really want to get rid of skype.. but they have to be extremely flexible with me.
well, if 3 year ebay not able to use SKYPE in profitable why then i dont think so they will do anything in 8 month so sale is sure no doubts about it.
I am against selling of old business as if ebay done any sort of JV with Google or any other expert then things may work. Reason of failuer of SKYPE is basically Ignorance, as ebay have main business of onlne shooping which have no relation with SKYPE, i cant find any similarity in ebays main business and SKYPE, they purchased SKYPE to support its core ecommerce business, this is wrong decision they have taken for example If i have business of Rent a CAR will not going to purchase Petrol Pump in order to fule Car here they goes wrong .. what u think ?
It might be worth to note that Oprah has been pushing Skype like crazy lately with her online class/book club thing. So there’s no question that Skype is very much in the mainstream public eye.
It was a dumb buy. There pay too much money.
Now there going to sell it at discount. This is another dumb invevstment. Investing in a site to compete with craigslist http://www.olx.com/ I think there will go deal just like live deal. I wish I can get money to invest on my website.
YouYap.com
There are ways to use skype in ecommerce business. I don’t know why they are thinking to sell it. It could be a better tool to provide communication between a seller and buyer.
eBay and Skype should’ve got together and sorted out some sort of browser based skype application so buyers and sellers could launch a call from within the listing rather than hoping that the buyer and seller both have the skype client installed and setting up the call themselves.
well, ebay does not look like a very good company to me…
Thank God. eBay buying skype was the stupidest buyout I’ve ever heard of.
eBay does well to sell Skype, specially because there are many buyers that could be interested, including Google, or even global telcos like Telefonica, Vodafone, Orange or Hutch. Telco’s rationale could be to kill it by making it a paid service, or just to cannibalize their voice revenues before someone else does.
As per Google, why should they buy Skype? See link below
http://tech-tal...ould-buy-skype/
I don’t really understand what Skype offers that hasn’t already been offered by Yahoo! Messenger or MSN Messenger or Google Talk. What exactly did eBay have in mind when they paid so much for an instant messaging platform?
Let’ see if they sell it for more than they paid for it.
No Ebay seller wants to have to deal with some buyer on the phone. It takes too much time, and the margins are low enough already. Bad buy.
Amazon is eating Ebay’s lunch.
Paypal has their head so far up mastercard’s ass, they don’t even remember what they were trying to disrupt.
Heads should roll in addition to sell-offs.
Skype’s problem is its closed proprietary protocol which prevents it from being used and embedded into third party apps and business solutions (don’t tell me about Skype API, it’s a piece of crap). Relying solely on end-user is totally unreliable, because ppls are very agile and mobile nowadays, they can easily switch to competitive services once they don’t like Skype’s offers and/or rates. And yes, Skype’s rates are no more competitive. On the opposite, businesses are quite steady, once they stick to some service they become a customer for a long time which pays off very well.
So, in my opinion, the only way for Skype to survive is to adopt mainstream standards (preferrably SIP) and employ good busines-to-business strategy. Unfortunetly they are despirately denying this way of development
.
@16: It doesn’t matter if skype is embedded in the auction or not. Even if a buyer would use it (doubtful) there are virtually NO sellers (except for the occasional newbie, maybe) that would allow it.
Besides, for buyer-to-seller skype to work, the seller has to be sitting in front of his computer. Ain’t gonna happen. Meg Whitman miscalculated big time on this. Just as she has in s-o-o-o many other ways.
@18: I dunno Sean. ebay has done some mightily stupid things over the years. No doubt the skype acquisition ranks up there, but sheesh, there’s so many other noteworthy candidates for the “stupidest thing ebay has ever done” award.
It’s like choosing a candy at the movie theater concession stand: There’s so many yummy choices!
This reminds me of the US invasion of Iraq. Obviously it made no sense, but everyone embraced it at the time. Well done, Ebay. Mission accomplished.
I can’t figure out why they are having so much difficulty finding a synergy here. How great would it be for me as a seller on e-bay to be able to have people call me and ask me questions about my item without me ever having to give my number to anyone but e-bay. Have “Call with Skype” as one of the options under contact seller. If they could get it to work with a java applet that would be even better (so buyers would not have to download yet another app to accomplish something). Even offer the seller the opportunity to allow others to hear the recordings of conversations if important questions were answered (with permission from both parties of course). Don’t want people calling your phone? E-bay could offer a phone mailbox for sellers on a per item, or per user basis for an additional fee. The possibilities are almost endless if you really think about it.
Does that mean ebay will finally get the auction site back on track? I think not! The rot continues.
Even investing in new and upcoming classified ads site like http://www.adsglobe.com/ would be a good idea
That is why ebay should buy yahoo
or vice versa