Is eBay Ready To Start The Bidding For Skype?

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.

Reader Comments

Teslinite

March 12, 2009 4:31 AM

I use Skype regularly for long distance calls to Canada, the US, Mexico, Europe, and Guatemala. Most of the calls are of exceptional quality with minimal delay. It's a wonderful service. I have vivid memories of trans-Atlantic calls costing $5 for three minutes in the 1950s, when $1.50 was considered to be an acceptable hourly wage. You thought long and hard before making any long-distance calls. Bless you, Skype!

Sidra

March 12, 2009 8:56 AM

i remember there was a time when Skype offered a free service for long distance calls. I had a tutoring course over-seas for months! It's a great service despite the service is no longer offered for free.

Jean Mercier

March 12, 2009 11:14 AM

Hey Sidra, Skype to Skype calls are still Free!
It are the Skype to Phone calls that are not free and never have been.

j davi

March 13, 2009 3:45 AM

Cellphone plans & devices are so affordable now. I dont think Skype or other voip companys will last long.

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Bloomberg Businessweek writers Peter Burrows, Cliff Edwards, Olga Kharif, Aaron Ricadela, and Douglas MacMillan, dig behind the headlines to analyze what’s really happening throughout the world of technology. Tech Beat covers everything from tech bellwethers like Apple, Google, and Intel and emerging new leaders such as Facebook to new technologies, trends, and controversies.

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