21 thoughts on “Should eBay Spin Off Skype? The Debate Continues”

  1. Friedland argues “As more people adopt Skype…”

    Doesn’t Skype have enough people using it already? Do they need the whole world to sign up? What’s going to change with a hundred million more users?

    Isn’t Skype’s business model very similar to email. It’s basically a free service with some advertising potential. What does Google or Yahoo! profit from their email service?

  2. Never understood why eBay bought Skype. Let buyers & sellers talk to each other without giving out their phone numbers?

    Seems like the job for Skype is to bomb out pricing on mobile phone voice minutes. We can’t get to DSL-like unlimited data bandwidth to the handset until some cost goes out of voice so people can afford to add a data plan. $90/month is fine if your company’s paying for it but it’s ridiculous when 6Mbps DSL only costs $35 at home.

  3. Om, you seem overly-pessimistic about Skype to the point that I wonder if you have an agenda? Why wouldn’t you mention AT&T or Google as potential bidders? Wouldn’t 1.5-2x sales be a steal for a double-digit growth company (that has barely even started trying to monetize)?

    1. @jd

      What you think is pessimistic, I consider realistic. If you start looking around, things are so tough right now economically that they would be lucky to get 1.5 to 2 times sales. Consider the tightness of money markets as a deciding factor in the final price for Skype. AT&T has its own set of issues.

      Google, as I say in the video is a likely buyer but it will be a disaster. I am not so impressed by Google’s track record of buying and assimilating companies. Again, being realistic. Of course sometimes that comes across as pessimistic.

  4. A mobile operator may see Skype as a way of hedging losses through Skype enabled handsets.

    I’m not sure of their cash position, but Hutchison 3G with “Three” branded networks in several countries including UK, Australia, Ireland, Italy & others, already sell skypephones which have a built in Skype application. They clearly already have some sort of working relationship with Skype and may have a sniff if a deal is in the offing.

    My speculative 2c!

    1. Ronan

      That would make a lot of sense and yes you are right for considering Hutchinson as a good option, especially since their corporate master also owns the Skype joint venture in China.

  5. Google buying Skype would be a disaster. They’re currently re-focusing on core businesses and Skype would be a distraction for the company. They have a terrible track record of integrating outside firms. I can’t see them making a play for Skype right now. I would have to think one of the telco’s would be a more interesting suitor, but as you say Om the corporate debt and financing markets don’t leave a lot of wiggle room for many of the debt-burden behemoths.

    I think Yahoo! is an interesting choice for the points you make – primarily the B2C subscription expertise. I can’t see why ebay would want to hold on to Skype for any other reason than it’s a bad time to sell. If Skype truly is profitable is there a compelling reason to divest now in such a bad environment?

  6. OM,

    What about DT (Deutsche Telekom)? They have the T-Mobile brand in the United States but can’t compete with the likes of ATT/Verizon for the home phone. Skype or Vonage would give them a way into the US land line business.

  7. Of course Ebay should sell Skype as they never should have bought them. Skype and Ebay had no real synergies from the beginning. First, Ebay really did not want auctioneers and customers talking as they may well complete transactions offline without Ebay taking their cut. Second, many auctioneers did not want to receive calls from customers as that is why they are selling on Ebay in the first place.

    Do the Ebay shareholders a favor, sell it.

  8. Just an observation:

    Lots of folks seem to agree that ebay is struggling.

    Yes, Ebay is struggling. This is a fact. But why? In a thrift-conscious economy like ours, there exists a renewed hunger for cheap, sharply discounted merhandise. Isn’t that is ebay’s domain? Ebay’s predicament appears to be quite an enigma, no?

    Well, not really. I know why ebay is tanking. It’s because of their pitiful and deplorable customer service. I have never been as offended and mistreated by the representatives of a corporation as I have been by those of EBAY, specifically during the period between April of and October of 2008.

    – Ebay Customer Service representatives actually LIED to me! Repeatedly!

    – Ebay Customer Service representatives PURPOSEFULLY and MALICIOUSLY misinterpret r fail to respond appropriately to customers who request via their ‘contact us’ page on their website (the ONLY way to reach ebay customer service other than “live chat”)

    – Ebay Customer Service representatives FAIL to follow their own policies, posted on their website!

    – Ebay Customer Service representatives in general are belligerent and appear to be unsupervised

    Honestly, I don’t know who’s bright idea it was at ebay to implement and subsequently maintain (for 10 miserable years!) their company’s customer service apparatus in this way — an infamously and hopelessly dysfunctional ‘web-only’ system staffed by unskilled, belligerent creeps fresh out of careers in food service. As far as I can tell, this failed executive is just as responsible for the decline their company as the other infamously ingenious ebay exec who declared that “Supersellers” and “Megasellers” were more worthy of respsect than the 99.9% of other folks — the buyers.

  9. Om:

    Yahoo would make a nice landing place for Skype. Strike BT from the equation. They’ve got enterprise-grade VOIP with Ribbit.

  10. Not sure if they should or not. It does seem to be a bright spot on the spreadsheet. However if they keep it, they might figure out a way to USE the damn thing. Why have a great communication tool like Skype and keep buyers and sellers using the crappy little yellow button for communication in the stone age?!? That is so silly!

    John (colderICE)

  11. On your question about profitability, John responded to a question from Scott Devitt with this about Skype: “it’s a $600 million run rate with 20% margin”.


    While I agree Skype and its parent have all sorts of challenges, it’s important to look at those numbers relative to other Internet companies that were started in the last 5 years. Anyone know what the Q4 revenue and profitability numbers are for Facebook, MySpace or YouTube? No? Imagine that…

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