Industry insiders say that eBay is gearing up to sell internet telephony firm Skype, which it bought in 2005 for USD2.6bn, a price the auction site has since admitted was too high. Speculation over a possible deal emerged after eBay CEO John Donahue described Skype as a ?great standalone business? during a conference call last week.
Donahue further excited discussion by admitting that ?the synergies between Skype and the other parts of our portfolio are minimal?.
Donahue held back from stating that eBay is looking to sell the business. However, his comments imply that selling Skype would be a swift and painless process. Offloading the business could also help the company’s bottom line at a time when it is struggling under a general decline in consumer spending.
Profits for Q4 2008, usually the firm’s strongest quarter, were down to USD367m, a fall of 31% compared to the same period in 2007.
Skype, on the other hand, continues to exhibit strong growth, suggesting the firm would make an appealing acquisition target. The internet telephone firm now boasts 405m users worldwide, adding an average of 30m new users each quarter. Its Q4 2008 revenue was USD145m, up 26% year-on-year.
However, the founder of tech blog, GigaOm, says Skype’s growth may be slowing. Though year-on-year revenue growth was impressive, the firm only brought in an extra USD2m compared to Q3 2008. This was despite selling 18% more SkypeOut minutes. Malik says this shows that bringing on new users and selling more minutes is simply not translating into higher revenues for the firm.
If this is true, igniting a debate about Skype may be part of a strategy to sell the telephone company off before the predicted plateau in revenue makes the firm an unappealing target for buyers.
Whatever eBay’s motivations, a number of analysts believe that, if the right offer is made, the auction site would be more than willing to divest itself of Skype.
StrategyEye's related categories: Web Applications - Marketplaces, VoIP Service Providers
