Print 13 comment(s) - last by diego10arg.. on Sep 3 at 10:00 AM

EBay plans to offload Skype, as the company has been unable to cash in on the popular VoIP service

EBay yesterday confirmed it has sold most of Skype to a group of investors for $1.9 billion. The investors now own 65 percent of the company best known for its VoIP service, with the following financial breakdown:  $1.9 billion cash, 35% equity investment and $125 million bond -- ends up being just a bit less than the $3.1 billion eBay paid four years ago.

"Selling Skype now at this great valuation, while retaining an equity stake, makes sense for the company," said eBay CEO John Donahoe, said in a press statement.  "And it allows us to focus all of our energies on the opportunities in front of PayPal and eBay."

EBay will be able to use the money made from the deal for  future acquisitions to strengthen its core auction business.  After successfully beating out Google and Yahoo for the right to purchase Skype, eBay has been unable to integrate its VoIP services into eBay.

There were several rumors the past couple of weeks that an investor group would purchase Skype, but the deal wasn't confirmed until today.  Venture capital firm Andreessen Horowitz, private equity firm Silver Lake Partners, venture capital firm Index Venture and Canada pension Plan Investment Board are several of the investors involved in the purchase.

Analysts are unsure if Skype will be able to grow as an independent company, but the investor groups will likely keep a tight control of the company.

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Wrong Business Plan
By mofo3k on 9/2/2009 9:35:24 AM , Rating: 3
I see where ebay went wrong with this purchase. They needed the to follow the correct business plan
Step One - Buy Skype
Step Two - ???
Step Three - Profit!

I still don't see how buying Skype was ever a good idea for them. There is literally no connection between them besides both being web based. I really doubt that Skype will be around much longer. There's already a lot of good competition and with Google Voice being out, look for their market share to evaporate.

RE: Wrong Business Plan
By invidious on 9/2/2009 9:59:04 AM , Rating: 2
Don't be so quick to write off habit, if someone is used to Skype and it satisfies their needs they are not going to go out looking for a replacement.

Whoever has the marketshare tends to keep it unless something major happens. This is especially true on the internet. The only thing that I predict is going to tip the scales for Skype one way or the other is an explosion of popularity of VOIP in general. Then in the power vacuum one service is going to come out on top and then the masses will flock to it.

RE: Wrong Business Plan
By bissimo on 9/2/2009 10:08:58 AM , Rating: 2
It a lot has a lot to do with the fact that not only do you have to change, but the people to talk with have to change. For example, my wife keeps in contact with her family overseas using Skype. We could never in a million years get her parents, grandmother, cousins, etc. to switch to another service.
I bet they'll start throwing a lot more ads into the free (PC to PC) service. The pay telephone service (PC to phone and vice-versa) will never pay the bills.

RE: Wrong Business Plan
By croc on 9/2/2009 5:42:51 PM , Rating: 3
"I see where ebay went wrong with this purchase. They needed the to follow the correct business plan
Step One - Buy Skype
Step Two - ???
Step Three - Profit!"

Step 2 was to make PayPal the only way to pay for the paid service. That worked well, didn't it?

My partner's son works for an international corp, designing and installing custom software. Mobile phone roaming charges were eating up a lot of money. He tried keeping SIM cards on hand for each country with a customer, but that was a pain, plus when a customer from company A tried to call him, he might be in country B

He loves Skype. He maintains a 'local line' near every customer, the roaming SIMS are in the trash, and the roaming charges have been mostly eliminated.

RE: Wrong Business Plan
By Oregonian2 on 9/2/2009 6:56:46 PM , Rating: 2
I still don't see how buying Skype was ever a good idea for them. There is literally no connection between them besides both being web based.

Once upon a time there was a period when every website in existence (or so it seemed) was putting little icons on their website to "talk to us now". Instant talking to the customer service dept, phone-call like.

Personally I thought it was the dumbest idea possible and exactly the opposite of the whole point of having a webstore (getting rid of or reducing the need for massive customer support folk at the phones to handle orders).

But a huge number thought that was a good idea for some reason, and eBay was one of them. They thought people would want to make "phone calls" to do their business related to eBay and Paypal.

They learned the truth that the answer is "no", people don't want that. But they were stuck with Skype.

That said, my wife (more than me) and I use skype for quite excellent working free national/international calls (audio in my case, w/video in my wife's case). Can't complain that it exists (for free) -- works fine with a great price. But don't use it for eBay or Paypal either.

By xsilver on 9/2/2009 8:39:32 AM , Rating: 5
minus listing fees, gallery fees, final listing fees, paypal fees - comes to around 1.71 billion only....

RE: fees
By xsilver on 9/2/2009 8:42:37 AM , Rating: 1
wait - since ebay is always the scammer maybe it should be 2.09 billion in this case lol...

RE: fees
By brshoemak on 9/2/2009 12:43:45 PM , Rating: 1
I vote for a 6 on this.

RE: fees
By Golgatha on 9/2/2009 4:02:59 PM , Rating: 2
I 2nd the motion for a 6.

Lets see where this goes
By oTAL on 9/2/2009 7:38:34 AM , Rating: 4
I was hoping that Google would win the bid here.

The Skype application has some really strong points IMHO and those would make a fusion with GTalk and Google Voice into a great integrated communication platform.

Some may say that would give too much power to Google, which is definitely true and should be carefully handled, but the comfort of having your Skype IM and voice conversations (transcripts) saved long with your email on Gmail would be awesome. The day will come =).

RE: Lets see where this goes
By knitecrow on 9/2/2009 8:17:03 PM , Rating: 2
Google has google voice. It is only a matter of time before Google voice matures and faces skype headon. Skype is in a lot of trouble when that happens.

RE: Lets see where this goes
By diego10arg on 9/3/2009 10:00:20 AM , Rating: 2
I'd love to see a desktop sharing tool from Googletalk as Skype's.

By ChugokuOtaku on 9/2/2009 9:24:13 AM , Rating: 2
I really hope these guys will bring back the skypecast service. Worst thing ebay ever did to skype was axing skypecast.

"A lot of people pay zero for the cellphone ... That's what it's worth." -- Apple Chief Operating Officer Timothy Cook

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