Posted by: Peter Burrows on March 11, 2009
At its annual meeting today, eBay executives broke out more details about the health of its Skype unit than it has in the past. Turns out the Net phone calling software pioneer enjoyed 20% net income last year, on $550 million in sales in 2008. And unit chief Josh Silverman says the plan is to double sales in the next three years, while maintaining those profits.
He spelled out a range of opportunities—from selling more to corporations, to ramping up mobile usage, to doing a better job of promoting its paid services. He even predicted that many phone makers and even wireless carriers will begin pre-loading Skype in 2008. For example, he said that UK carrier Hutchison Whampoa had seen great sales and 20% better profits on its Skype phone than on other handsets, since owners of the device end up generating minutes from voice calls with non-Skype users and data minutes as they use the phone for Net browsing and such.
So is Skype for sale? There’s been plenty of speculation that it is, including by us. On the one hand, CEO John Donohoe said Silverman’s unit was benefitting from being part of eBay. “It’s given them some air cover, so the team doesn’t have to monetize it faster than they’d like to.” But on the other hand, he said very strongly that eBay has not realized the synergies it had hoped for when it bought Skype for $2.6 billion in 2005. “We were wrong.”
And he certainly stopped short of saying the unit was not for sale. Asked if the fact that the company included 2011 projections for Skype in its presentation signalled that he intended to hold onto it unti then, Donohoe said this was not the case. Rather, he said that this “doesn’t mean anything.” What he did reiterate, multiple times, is that the company would do everything possible to “realize the highest value for Skype and for us over time.”
Sounds like another invitation to start the bidding.