Leading VoIP service Skype goes from strength to strength, with revenues rising by 26 per cent last quarter. Yet despite this success, parent company eBay is rumoured to be looking to offload its cash-cow to none other than Google.
The rumours seem credible when you consider that eBay's latest financial results were pretty poor (revenue down 7 per cent to $2.04bn), well below the market expectations for what is traditionally retail's busiest quarter.
No eBay/Skype synergy
"Even eBay has now admitted that its $2.6bn purchase of Skype in 2005 was too much. With still no logical integration between the telephony service and the auction site, speculation over a potential sale is again intensifying," says Jemima Kiss in The Guardian.
According to The Times, eBay's Chief Executive, John Donahoe, told analysts earlier this month that: "synergies between Skype and the other parts of our portfolio are minimal." He also said that Skype is "a great standalone business".
The Times report mentions US telcos AT&T and Verizon as potential buyers, while Jemima Kiss speculates in The Guardian that: "Google was rumoured to be interested as far back at November 2007, and that would fit with just one of the many pies in which Google has its fingers."
TechRadar has contacted Skype's UK press office for further information on this story, so stay tuned for updates.
Your comments (4) Click to add a new comment
ciaran
January 28th
4. "Leading VoIP service Skype goes from strength to strength, with revenues rising by 26 per cent last quarter. Yet despite this success..."
Oct 2007: eBay made a $900 million write-down on Skype.
Success?
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aamiri
January 27th
3. Two points:
1) Vonage gross margin may be high but when you look at the overheads and net it's a different story.
2) There may not be a synergy between Skype and the rest of eBay, but there is similar core competency across it's three businesses which is the ability and know how to engender what in strategy is known as "network externalities" (the hardest market share to penetrate by competitors) i.e. when the network of users grows it becomes self perpetuating. If you had two telephone lines in the world the 'network' would be useless. However as it grew, not being part of the network is now not an option. Likewise, eBay is a master at engendering networks: in auctions, it succeeded to the point that if you want to sell, eBay is the place to go for it has the most traffic of buyers and if you want to buy, you go there because there are the most sellers. In Paypal, you need it now because most others accept it - and most others accept it because most others offer it. And with Skype, as more people use it, eventually you will probably download it too. Mastering this chicken or egg conundrum is what eBay is good at. I could see them fostering Skype better than most - even as a stand alone business.
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vbaker
January 27th
2. I should think that eBay only needs to bridge the two environments together with an open source tool which could be deployed anywhere. A desktop server with a simple user interface should open up that entire game for them.
How can I let them know that we have been developing what they need?
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oldfashion
January 27th
1. Business lingo 101: Skype hardly meets the definition of a "Cash cow". Ebay's Communication divsion has a gross margin of ~20% (http://bit.ly/14jFH); compare this to Vonage, which has a gross margin in excess of 65% (http://bit.ly/TEwQ). Furthermore, Skype represents less than 5% of Ebay's revenue and net income.
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