Going forward, Skype doesn't really hurt the value of eBay.' 'But that's water under the bridge at this point. 'I'm sure eBay's shareholders probably think that money could have been better spent on something else, like paying them dividends,' he said.

eBay itself has valued the Skype assets on its balance sheet at $2 billion, so it's unlikely the company would accept a lower figure, Friedland surmised.įriedland also said the inflated price tag that eBay paid for Skype is already built into eBay's stock price, which means the company is under no pressure to sell off a bad asset. And he said that would be a generous offer. By recording a charge, the company is essentially saying that it has taken a loss on its original investment.īased on its current financials, the highest price that eBay could hope to get for Skype is about $1.6 billion, Friedland said. This means that eBay has been forced to reassess the value of the Internet telephony company relative to its overall business today. In 2007, eBay said it would take a $900 million so-called impairment write-down against the value of Skype. There's no question now that the price tag was too high. Three years ago, eBay paid $2.6 billion for Skype. But the price that a potential suitor would have to pay for Skype is probably too high. It could hold onto the service and run it as a separate business and still generate revenue.īut, of course, any business or asset is for sale for the right price. He also said the company just had its seventh straight quarter of profitability.īecause of this growth in Skype, eBay has little reason to sell Skype at this point. Today, about 8 percent of the world's voice minutes originate from a Skype call, he said.Īll told, Durchslag said Skype has been growing about 50 percent compared to the previous year in almost every metric-from minutes used to new subscribers to revenues. And these users are making lots of phones calls. It now has 370 million registered users worldwide. Scott Durchslag, the company's chief operating officer, told reporters at the Consumer Electronics Show this month that it's been adding about 30 million subscribers a quarter. Skype has also been adding new subscribers at a rapid pace.

And Skype's revenue grew 26 percent to $145 million. PayPal revenues were up 11 percent to $623 million. Meanwhile, PayPal and Skype, eBay's other two main business units, grew during the fourth quarter. It was also the second quarter in a row that the company saw the total value of all goods sold on the site fall, suggesting that the company's core business is struggling. Indeed, eBay reported that its overall net income for the fourth quarter fell more than 30 percent compared to the same period last year, marking the first time ever that the company has seen its year-over-year earnings drop. But I'm sure the company would sell it if they could get a hefty premium for it.' 'In fact, it's one of the fastest-growing assets the company has right now. 'Skype is not a drag on eBay at all,' said Jim Friedland, senior Internet equity analyst for Cowen and Company. But Skype, which just posted a 26 percent gain in revenue for the fourth quarter compared to a year ago, happens to be one of the only bright spots in eBay's overall business, which means that eBay isn't desperate to let it go. Because Skype isn't core to eBay's online auction business, experts believe that eBay would be happy to let Skype go, at the right price. So is eBay looking to unload Skype? The answer is probably yes and no. When asked what eBay was doing to add shareholder value to Skype, Donahoe admitted that 'the synergies between Skype and the other parts of our portfolio are minimal,' the paper said. Donahoe had said last year that eBay would consider selling the business unit if it couldn't be integrated with its auction or PayPal payment system.Īnd according to statements made during the conference call, it looks like Donahoe doesn't think there is much the Skype technology can do to help eBay's other businesses. The news has left many in the industry wondering if eBay will put Skype, which it paid a hefty $2.6 billion to buy in 2005, on the auction block.

The Times of London reported Monday that John Donahoe, chief executive of eBay, described Skype as a 'great standalone business' on a conference call last week with investors after the company reported disappointing fourth-quarter results. But any suitor that comes knocking on eBay's door will likely have to pay a hefty price tag for the Internet phone service. Comments from eBay's CEO have sparked speculation that the online marketplace may be looking to unload Skype.

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