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EBay Mulling Skype Sale
MaineCoasts writes "The Financial Times reports that eBay's new CEO is evaluating a sale of Skype if new ways cannot be found for the fast-growing service to support its core e-commerce business. EBay reported earlier this week that Skype had a 61 percent increase in first-quarter revenue over the same quarter last year and now has 309 million users worldwide."
Is anybody surprised? Why Ebay bought them in the first place is beyond me. It made no sense.
eBay's interest in Skype never made much sense to me. Live voice auctions might have fit in, but seem rather impractical. It will be nice to have Skype ownership that has a vested interest in Skype's core business.
It still mystifies me as to why eBay, an auctioneer and item dealer, would want Skype, a telephony service.
I dunno. Maybe they were going to flog off switchboard hardware for a dime a piece.
Those using pirated Tinysoft signatures(TM) are a real threat to society and should all be thrown in jail.
Let's get this straight. You have a thriving subsidiary with strong growth but it isn't sufficiently enmeshed with your core business to make you happy as the CEO or eBay. Your options are to:
It seems to me like this guy is looking to bail out on eBay in the next couple of years and wants to have a successful divestiture to feather his cap. This is typical of the sort of short sighted bullshit that publicly traded American companies go through nowadays because the overpaid people running them don't care about anything other than their own career track.
I am becoming gerund, destroyer of verbs.
So... eBay's CEO wants to sell Skype because it is making too much money?
I am awed by the clarity of his reasoning!
Tomato wedge sperm darts that are Republican.
I hear it's not a bad place to dump off unnecessary thing.
Skype is easy and free. SIP/RTP VoIP is free too and it's getting easier, plus you can wire it into existing phone infrastructure at competitive prices. If eBay doesn't do something useful with Skype soon, it might be too late.
British Telecom is doing a lot with the Internet, has a lot of telecommunications experience and has the infrastructure. The BBC has experience with codec development, real-time delivery of multimedia to large numbers of people, and the problem of digital audio over unreliable networks. Timesys, in the US, has enormous experience with real-time systems and the problems of real-time computer-based applications, although I'm not sure if they have much experience with real-time networking. They might. Cisco, now they have Scientific Atlanta, have not only vast computer networking experience but experience with all kinds of high-performance network systems. Again, since cable television systems must be able to decode the signal fast enough, Cisco must have people skilled in high-performance codec development.
Any of these companies would seem to be better partners than eBay. None of them will likely buy it, but I could see Skype faring better with any of them. They have skills and experience eBay would not have had that relate to what Skype is doing.
This does raise an interesting question, though. If ISPs are highly concerned about the bandwidth requirements to deliver the BBC's iPlayer content (given that that can be delivered best-effort, whereas Skype's cannot) to the point where they think the BBC should pay extra for that bandwidth, and given that ISPs are keen to ditch neutralty and charge providers extra just to get best-effort, it follows Skype will be in for some hefty ISP bills in the future. Is it possible that such extra costs would make Internet telephony on any commercial scale completely impractical?
(To get the customer base to be profitable, Skype would need users worldwide, but they'd be paying every ISP that served at least one customer of theirs plus the backbone providers for both the extra bandwith and the high-end quality of service needed, as well as their own ISP bills. Assuming bandwith charges are equal to QoS charges, that means they pay twice what any other Internet service pays for the same effective level of service. That means they'd need twice as many users as a profitable e-commerce business, assuming service is a major cost. Tha means ramping up to that level would also be very expensive.)
It's a small world and it smells funny; I'd buy another if it wasn't for the money; Take back what I paid (SoM)
From their initial IPO eBay's share were the darling of the Nasdaq. They rose srtongly and consistently.
The day eBay bought Skype their share price went through the floor. It has never recovered.
Just as well Meg Whitman is already leaving, they really should have fired her a long time ago.
Ebay is one of the least innovative companies of this decade. Ebay should sell ebay.
On ebay.
My prediction is that Skype will not only become more popular but also more profitable. Their savior will come in the form of the new mobile computing platform. UMPC or MID + 3G/3.5G/4G/WiMAX + Skype.
Once battery life increases (atom) and mobile networks improve, techies will quickly adopt this platform as their primary phones but they'll still need to make and receive calls to others with PSTN phones.
You want fun, go home and buy a monkey!
I used to read PayPalSucks.com alot until I came to realize that a large number of complaints are from people who try to screw the system anyway (ie; people signing up with fake info complaining that their funds are frozen and they can't prove who they are, or opening multiple accounts, or closing an account after receiving a dispute (leaving a negative balance) - and opening a new account, then complaining that they got linked (DUMBASS)). there are probably legitimate complaints on the site and there are many things that Ebay and PayPal do that I don't agree with- but I wouldn't rely on the feedback on that site. I've been using paypal for 5 years and never had a problem.
Al
Well the CEO says:
... our job now is to make sure we continue to build on Skype's successes and grow its passionate community of users.
Q. I read in the Financial Times that we may sell Skype. That if the synergies are strong, we'll keep it in our portfolio. If not, we'll reassess it. Is this true?
We have no plans to sell Skype... and why would we? As I said in the story, it's a great business with a great purpose -- enabling the world's conversations. With a new president, our plan for Skype is to focus on providing the best possible user experience and continuing the incredible growth momentum we've enjoyed with Skype for the past four years.
To be clear, I've fully supported big investments in Skype, including removing the earn-out, and bringing over some top talent like Josh. I think this business has tremendous potential that we've only started to tap. Josh and I are both excited about the prospects
http://ebayinkblog.com/2008/04/18/john-donahoe-talks-to-ebay-ink/
Completely agree! There was never a fit for Skype and eBay. The user count is only a ploy to attract potential buyers. How many of the users are paying clients? if the number was 6% they would be ecstatic.
if i was ebay i'd be careful selling off profitable parts of the company. now that your trying to force people into using paypal you might find your going to need the month
If you mod me down, I will become more powerful than you can imagine....
I have a phone with WiFi and 3.5G. What do I use? SIP, not Skype. I actually signed up with a SIP provider despite using Skype on the desktop. Skype on mobile phones is simply too painful compared to SIP.
That's precisely where they were headed before eBay bought them. Astonishingly, eBay turned them around. Which is not to say that this is a good thing. Paypal is a company that really should have gone bankrupt.
EBay was actively fighting PayPal from being used on listings until they realized that it would just be easier to buy PayPal than to fight them and have their own payment service. Perhaps you remember Billpoint (eBay Payments)? EBay also promoted an Escrow service and a Western Union auction payment service as well.
Once EBay acquired PayPal, they were very aggressive about promoting Paypal and killed off Billpoint. They also pretty much shutdown access to their other payment partners and killed them off.
Now EBay not only has PayPal as the major option for payment, they force you to use either a premier or business account for EBay. You can no longer use a personal (free) account on EBay and you can't reject credit card payments. This works out better for buyers probably but it means more fees for sellers. With no more Paypal personal (free) accounts used on EBay, Paypal became a lot more profitable.
BTW, I'm probably crazy in the fact that I use PayPal as a "savings account" since they have high-interest on their money market and it's very liquid / easily accessible. As a bit of protection though, I got the Verisign security key for PayPal which generates a 6-digit number every 30 seconds that is unique for logging in.