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Will eBay Hang Up on Skype?

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The Financial Times thinks so. The British paper quotes eBay’s CEO John Donahoe as saying the online auction firm will test Skype for “synergies” this year and if those synergies aren’t strong, reassess the division. eBay purchased Skype in 2005 with a potential payout of $4.1 billion. However, last year eBay wrote down the value of the acquisition by $1.4 billion, essentially admitting it overpaid.

Now, under the new leadership, it looks like eBay didn’t merely overpay, but also overreached with the buy. At the time, CEO Meg Whitman prophesied that Skype would allow eBay users to click-to-call during auctions. Why this feature was worth $4.1 billion puzzled the media and analysts alike. Skype is growing, but eBay hasn’t figured out what to do with the growth for the betterment of the company, which probably means that a divestment is the right thing to do.

12 Responses to “Will eBay Hang Up on Skype?”

  1. Skype = Hype
    When are these overpaid morons going to realise that a company is worth what the masses believe it to be worth and you cannot set out to educate the world to prove a business model. Ebay is a pain in the ass as it is without having potential customers trying to call me on Skype with inane questions. I give good service and answer sensible questions from sensible people, but to encourage the use of a phone service is unworkable. Ebay should concentrate on making what they have work better.

  2. What are they waiting for? lol. What they need to do is get their stock moving upward!
    Day traders and market makers are having a ball with this stock!

    Analysts up-grade-down-grade daily while they sell into a rally.

    Even though eBay beat estimates, analysts are down-grading again…Why? Because they heard that eBay might sell Skype? lol.
    (Beat the stock way down while they lurk in a dark corner waiting to buy up cheap shares and profit)lol.

    eBay will probably end up selling Skype to Google, which by the way went up this morning by some $80.00 dollars!
    Imagine eBay doing something like that!
    Imagine eBay even going up $10.00-$20.00 dollars in one day?
    Selling Skype just might do it.

  3. “Testing for synergies” sounds like some kabuki theater — it’s a face-saving gesture intended to justify the sale. If there were ever any synergies between Skype and eBay, we’d certainly have seen them by now, but ultimately, eBay simply can’t permit uncontrolled communication between buyers and sellers before the conclusion of an auction.