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."

No way ...

[Luscious868]

Is anybody surprised? Why Ebay bought them in the first place is beyond me. It made no sense.

Live voice auctions?

[WolF-g]

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

[jrothwell97]

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.

You don't need Skype for voice communications

[Starturtle]

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.

Re:No way ...

[Ossifer]

Exactly, call me when they're going to sell PayPal -- that would be the real benefit to the world!

Re:So if I understand this correctly...

[Killshot]

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.

The window is closing fast.

[Anonymous Coward]

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.

Re:Retarded CEOs

[jchawk]

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:Call me when they're going to sell PayPal

[owlnation]

IMO, pay"pal" would be far better of as bankrupt.

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.

Re:The window is closing fast.

[Anonymous Coward]

You don't get a user base as big as Skype's with Open Source advocacy.

Re:Call me when they're going to sell PayPal

[smittyoneeach]

Why, exactly?
It seems to offer a valuable service at a reasonable rate, although I've only ever been a customer.
Sometimes an idea, like a jet engine, needs a few thousands RPMs to get it up to speed.

Re:Retarded CEOs

[RiotingPacifist]

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.

Skype's savior

[kylehase]

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.

Re:No Bid

[Al_Lapalme]

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.

Re:Retarded CEOs

[jt2377]

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?

Re:Good

[BewireNomali]

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.

Re:Who gives a shit?

[kckman]

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.

care much?

[timmarhy]

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

Re:Good

[Kadin2048]

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 probably other, better companies that they could have acquired, ones that would have provided more value -- companies that specialized in linking IP services to existing phones for instance. (So an eBay merchant could plug in their existing phone no. and have buyers be able to click on a button on an auction and call them, or something like that.) Not to mention, pretty much any of them would have been a lot cheaper than Skype.

The Skype acquisition always looked like something that had been decided on first, based on some sort of 'gut feeling' driven by hype or wishful thinking or a sense that they were 'missing out', and then the reasoning for it was backfilled in later. (As I think a fair number of Web 2.0 acquisitions were.) Turns out, that's not a really good way to run a business.

Re:Retarded CEOs

[Jeff DeMaagd]

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.