Earnings: EBay Says It’s Making Progress On Skype ‘Separation'; Skype Revenue Up 25 Percent

Skype

EBay said Wednesday that its plans to offload Skype continued to progress, although executives notably did not refer to the possibility of an IPO, instead talking about “plans to separate” the business. In April, eBay (NSDQ: EBAY) said it would spin off Skype in an IPO during the first half of next year. The company later indicated, however, that it remained open to selling Skype to another party. EBay has been mired in litigation with Skype’s two founders over the rights to the peer-to-peer infrastructure behind Skype and there’s been speculation that the legal troubles could get in the way of an IPO and make a sale more likely.

Skype continues to post strong numbers — a contrast to eBay’s core marketplace business. The unit’s revenue increased 25 percent during the quarter to $170 million. Skype added 37.3 million users, bringing its total number of registered users to 480.5 million.

Overall, eBay’s net income fell 29 percent, as the company’s auction business continued to post declining sales. Net revenue fell 4 percent. But executives said that the marketplace unit was stabilizing, pointing out that its decline in revenue had slowed. “We know we still have a long way to go,” said CEO John Donahoe. Release.

2Q 2008 2Q 2009 Estimate
EPS $0.43 $0.37 $0.36
Net Income $0.46B $0.33B
Revenue $2.2B $2.1B $1.99B

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