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EBay Mulling Skype Sale 82

Posted by ScuttleMonkey
from the do-you-hear-that-flushing-sound dept.
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."
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EBay Mulling Skype Sale

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  • No way ... (Score:5, Insightful)

    by Luscious868 (679143) on Friday April 18, 2008 @06:15PM (#23123328)
    Is anybody surprised? Why Ebay bought them in the first place is beyond me. It made no sense.
  • by WolF-g (539252) on Friday April 18, 2008 @06:17PM (#23123340)
    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.
  • Good (Score:4, Insightful)

    by jrothwell97 (968062) <(moc.llewsorton) (ta) (nahtanoj)> on Friday April 18, 2008 @06:17PM (#23123342) Homepage Journal
    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.
    • "Maybe they were going to flog off switchboard hardware for a dime a piece."

      Plus $1000 shipping & handling
    • by AccUser (191555)
      I don't know - mix this with presence information in ebay accounts, and when looking at an auction, you get a link to the seller's skype for text and/or voice chat.
      • Re: (Score:3, Insightful)

        by BewireNomali (618969)
        that's what i thought. for power sellers and ebay vendors, having that kind of ability to deliver on-demand customer service could have a lot of value. archive the chats in case of dispute and it seemed like a strong idea. guess i haven't thought it through.
      • by AuMatar (183847)
        But you don't need to buy them to do that. You can easily pay them, and pass along the cost to the sellers for a tiny fraction of the cost.
      • Re: (Score:3, Insightful)

        by Kadin2048 (468275)

        I don't know - mix this with presence information in ebay accounts, and when looking at an auction, you get a link to the seller's skype for text and/or voice chat.

        That's a good argument for partnering with a VoIP/telephony company, but not really for owning one outright. In fact, the last few decades of accepted business-management wisdom advises exactly against this sort of acquisition. Just because you have a need for something, doesn't mean you're necessarily the best person to supply it, even to yourself.

        Telephony was nowhere near eBay's core competency, and the match never looked that great. And even if they were hell-bent on getting into VoIP, there were pr

      • by eyendall (953949)
        Yes, but it is dangerous for ebay buyers to talk to sellers as they could take their transactions off-ebay and save money. ebay has always done all it can to discourage this. I think ebay got confused and lost sight of this when it bought Skype.
  • With feedback like that [paypalsucks.com], there's no way I'd bid.
    • Re:No Bid (Score:5, Insightful)

      by Al_Lapalme (698542) on Friday April 18, 2008 @09:36PM (#23124668)
      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.
  • by Starturtle (1148659) on Friday April 18, 2008 @06:23PM (#23123388) Homepage

    Ebay originally believed that Skype would oil the wheels of its online markets by making communications easier between buyers and sellers
    If there was a viable business model here, I would imagine that phone numbers, along with the shipping name and address, would have already been part of the personal information that would have been available after an auction was won. Skype would have only added some mild anonymity. Honestly, I think that most people prefer the impersonal interaction of e-Bay.
    • FYI, phone and address are already published. You can request user information for those you have transacted with. I think this was available since the beginning.

      Whether the info is true is another story of course.
  • Retarded CEOs (Score:5, Interesting)

    by wiredlogic (135348) on Friday April 18, 2008 @06:30PM (#23123442)

    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:

    1) Keep the business unit and enjoy sleeping in even larger piles of Franklins
    2) Sell it off to hide some nasty financials in the core business with some Jedi accounting tricks
    3) Hand the reins over to CowboyNeal and let him run the show

    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.

    • Re:Retarded CEOs (Score:5, Insightful)

      by jchawk (127686) on Friday April 18, 2008 @06:50PM (#23123606) Homepage Journal
      Okay I'll bite.

      Ebay moved away from it's core business by acquiring Skype in the first place. It's not supporting their core business so it only makes sense to spin the business unit out into it's own business probably via public stock offering, thus infusing ebay with a bushel of cash. This allows them to get back to the core business and focus on expanding ebay not figuring out how to integrate a business that just doesn't fit.
      • Re:Retarded CEOs (Score:4, Insightful)

        by RiotingPacifist (1228016) on Friday April 18, 2008 @09:15PM (#23124556)
        Why sell it?
        If i was in the trade of making silver, and then one day i buy a magic pot that makes gold, id keep the bot, let it cary on making gold, and id keep making silver. This has the bonus that if someday i fancy making silold or gilver i can.

        Plus ebay doesnt go great with skype but paypal does, why dont they just keep sticking paypal to stuff. Online auctions were nice, but there no point putting all your eggs in the one basket, gumtree/facebook, is becoming a convenient way to get rid of junk without the haste of ebay, on-line shops are getting competitive, and froogle is getting good at finding what you want. Ebay isnt going to die but it wont keep growing forever.
        There is plenty of areas where knowledge from ebay would be useful in setting up a new project with skype & paypal. For example
        Renting rooms & flats, here in London, nobody wants to go through estate agents (because they're all ****s), but gumtree still looks and feels unprofesional, the search isnt very good and putting your phone number on the web isnt the best idea. solution an ebay like listing site that you link to a skype number, and has the bonus that tenants can set up a paypal direct pay so you dont even have to collect rent.
        they have three great products, they dont need to link them.
        • Hey I once had a silold and gilver sword. It was like a +50 versus magic armor!
          But the damn thing was so heavy and it didn't do squat against plate mail.
        • by Kadin2048 (468275)
          Companies that try to do more than one thing rarely do all of them well.

          There are exceptions to this, but in general, most companies are highly specialized. They do something, they do it (hopefully) well, and that's how they make money. Everything they do is in furtherance of that goal: what's called in businesspeak a "core competency."

          EBay's core competency isn't the same as Skype's. It doesn't really make sense for them to be in the same organization: with such differing strengths, it would be difficul
        • Re:Retarded CEOs (Score:5, Insightful)

          by Jeff DeMaagd (2015) on Saturday April 19, 2008 @02:20AM (#23125694) Homepage Journal
          If you'll notice, they said that revenue and user base increased. They didn't say that it was profitable. That's a very important distinction, because real businesses are concerned with actual profit, whereas businesses that harken to the dot-bomb try to ignore profitability and wave flags of distraction about revenue and traffic, hoping people ignore the fact that it's unprofitable and there's little hope of becoming profitable.

          If the value of Skype is worth more in terms of selling off to some other sucker investors than it is keeping it in the hopes that it might be worth something some day, then it's better to sell it off.
          • by Darundal (891860)
            FTA: "What we know is, Skype is a great stand-alone business," Ebay's CEO said. Its revenues this year are set to top $500m and the service will be profitable, he added.
            No, pretty sure they said profitable. Although, mistakes like that are understandable, if you didn't RTFA.
      • by Darundal (891860)
        They don't necessarily need to integrate Skype into their core business model. Hell, just running things as they are now is probably a good idea. I seriously doubt that Skype is keeping them from making ebay more profitable. I really do think that this is most likely option #2.
    • by maxume (22995)
      The purchase of Skype for $4 billion was the short sighted bullshit typical of publicly traded American companies.

      I guess they might make that back if they hold on to it for a long time, but I sort of doubt it.
    • Re: (Score:1, Insightful)

      by jt2377 (933506)
      the article said "fast growing" that doesn't translated into fast growing in profit. how much do eBay make from people paying the fee service and not the free service?
  • by arotenbe (1203922) on Friday April 18, 2008 @06:38PM (#23123506) Journal
    So... eBay's CEO wants to sell Skype because it is making too much money?

    I am awed by the clarity of his reasoning!
    • by perlchild (582235)
      I understood it as "he wants to sell Skype and somehow profit personally from the sale" myself. He has to say Skype is profitable(to be able to sell it), but claim a good reason to do so. Making himself look good in the process is probably what started all this, if not actual desire for more dollars.
    • by Killshot (724273) on Friday April 18, 2008 @06:45PM (#23123564) Homepage
      It is not making too much money, it is making more money, it is growing, and it is better to sell something when it will look attractive to buyers. They over paid for skype, it takes a lot of resources to run, and has nothing to do with their core business. Getting rid of it now makes perfect sense.
    • by Kadin2048 (468275)
      They want to sell Skype because they have no clue what to do with it. (Yeah, they probably should have thought about that earlier, but that's what's called a 'sunk cost' at this point.)

      He has to talk about how profitable it is, or else nobody will buy it. Who'd want it otherwise? He's pretty much required to say all that stuff.
  • by theurge14 (820596) on Friday April 18, 2008 @06:46PM (#23123568)
    I hear it's not a bad place to dump off unnecessary thing.
  • by Anonymous Coward on Friday April 18, 2008 @06:48PM (#23123584)
    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.
    • by lokpest (1136949)

      Skype is easy and free
      Free as in beer, not as in speech.
      • Re: (Score:1, Insightful)

        by Anonymous Coward
        You don't get a user base as big as Skype's with Open Source advocacy.
        • by nguy (1207026)
          You don't get a user base as big as Skype's with Open Source advocacy.

          No, you get it with marketing and loose promises.

          But you sure can lose a user base as big as Skype's because you don't play ball with open source and open standards.
      • by larry bagina (561269) on Friday April 18, 2008 @07:33PM (#23123956) Journal
        I think you're confused. Skype is internet telephone software, for voice data. It's free, so it's free as in speech.
        • No, it's free as in beer. The source code is not public, and the centralization of account management leaves it open to some fascinating man-in-the-middle monitoring.
    • by smclean (521851) on Friday April 18, 2008 @07:03PM (#23123720) Homepage

      Let's hope they don't and Skype dies a quiet death!

      We can all use SIP and not pay tribute for a proprietary protocol.. and we can use whatever client we want rather than an annoying proprietary one.

      Skype's business model is lock-in.. Die Die Die!

      Someone had to say it, this *is* slashdot..

      • by Angostura (703910)
        Hi Can you suggest a non-proprietary standard-based piece of software that offers excellent quality video conferencing between Windows/Mac/Linux. Oh and it has to be simple enough for my 80+ year-old parents to set up.
  • There's no obvious connection between an internet phone service and an auction house. As such, there's no obvious way for the phone service to assist the auction side of things by any means other than being profitable. There's no obvious assistance through technological improvements, customer base, or provided service. Skilled developers in one field couldn't even transfer their skills to the other easily - codec/real-time developers aren't usually web/e-commerce developers. Internet phone systems are still very primitive compared to regular phone systems making a significant profit unlikely at best for the time being.

    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.)

  • total failure (Score:4, Interesting)

    by owlnation (858981) on Friday April 18, 2008 @07:00PM (#23123680)
    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.
  • by frisket (149522)
    Open it up to SIP, stupid!
  • It sounded really good at the time.
  • by v(*_*)vvvv (233078) on Friday April 18, 2008 @08:24PM (#23124296)
    Ebay is one of the least innovative companies of this decade. Ebay should sell ebay.

    On ebay.
  • They need a lowercase letter out front: eSkype
    Look at Apple, they put a "i" in front of everything and just look at how successful they are.
    Problem solved.
  • Skype's savior (Score:3, Insightful)

    by kylehase (982334) on Friday April 18, 2008 @09:27PM (#23124610)

    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 [engadget.com] or MID [engadget.com] + 3G/3.5G/4G/WiMAX + Skype.

    Once battery life increases (atom [intel.com]) 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.

    • SIP, not Skype (Score:3, Informative)

      by nguy (1207026)
      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.
      • by kylehase (982334)
        Good point although I'm not sure how many people, including techies, know how to setup SIP software. SIP is still esoteric in my opinion. X-Lite is probably the most popular SIP soft client but it's not very user friendly.

        Additionally, many countries including the US have poor mobile Internet connections that can't support the heavier G.711 codec required by many SIP providers. You're lucky to have a 3.5G connection.

        Don't forget, most of these UMPCs and MIDs are real PCs (X86) with high resolution screen
        • by nguy (1207026)
          Most recent Nokia phones have SIP clients, WiFi, and HSDPA built in and integrated into everything (contacts, dialer, etc.). Making a SIP call is as easy as making a regular phone call. We're talking sleek, compact consumer phones with cameras and everything, not Windows Mobile or UMPC bricks.

          In the US, you can get the Nokia N95, in Europe, the ones to get are the N82, N78, and N96.
  • by ageedoy (961786) on Friday April 18, 2008 @09:54PM (#23124776)
    Well the CEO says:

    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 ... our job now is to make sure we continue to build on Skype's successes and grow its passionate community of users.

    http://ebayinkblog.com/2008/04/18/john-donahoe-talks-to-ebay-ink/ [ebayinkblog.com]
  • Well I suppose eBay can just throw up a no reserve auction and get it done, eh?
  • care much? (Score:3, Insightful)

    by timmarhy (659436) on Friday April 18, 2008 @11:51PM (#23125186)
    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
  • by nguy (1207026)
    I think it would make a lot of sense for Google to buy them and integrate them with GrandCentral and GTalk.
  • evaluating a sale of Skype if new ways cannot be found for the fast-growing service to support its core e-commerce business.

    So, you have a hugely profitable and growing division, that you're going to sell off because ... what?

    Not that I ever understood the logic of EBay owning Skype anyway: I suppose they felt they could use it to augment their core business in some way, but that always seemed a remote prospect anyway. Rather like @Home spending some 900 million on Blue Mountain. That was a WTF moment
  • The purchase of Skype never made much sense to me, as it hasn't to anyone else here, either. One theory is that since the stock price had already plummeted and then stagnated, they may have been looking to infuse the company with new and innovative talent to shake them from the doldrums. Sometimes the way to get that is to buy another company.

    I'm not a conspiracy theorist, but I have a conspiracy theory, so maybe I am a latent conspiracy theorist. In the never-ending global war on terror, much has been
  • Who should buy Skype? GOOGLE. It would make a good addition to Google Talk and Gmail.

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