Maggie Shiels

Skype for sale...any takers?

  • Maggie Shiels
  • 15 Apr 09, 08:30 GMT

There is no doubt eBay's move to stick the For Sale sign on the Skype lawn came as no great surprise in Silicon Valley and could well have one or two benefits for the online auction company.

eBay logoWall Street was certainly happy with the initial news and shares went up a notch or two in after hours trading to finish around the $15 mark.

Next week eBay has an earnings report out, so shareholders might be more lenient on the board if the numbers don't delight because they know the future means offloading a company that left many scratching their heads when eBay paid $2.6bn for it in 2005.

eBay boss John Donahue himself admitted that the Skype purchase was not a wise buy when he said: "It's clear that Skype has limited synergies with eBay and PayPal...and that separating Skype will allow eBay to focus entirely on our two core growth engines - e-commerce and online payments - and deliver long-term value to our stockholders."

So why not just put the company on the block and sell it now rather than go down the IPO (initial public offering) route sometime next year?

It's a cute move in a down economy surely to lure out possible buyers and placate shareholders?

SkypeFor some analysts the IPO route just doesn't make sense now or next year. Gregory Lundberg from Commresearch told Reuters News: "The first thing that I have to say is market conditions currently would not support an IPO of Skype in our opinion. 2010 will be equally questionable unless the business changes course with the launch of the BlackBerry and iPhone applications."

In its first 36 hours, the iPhone app was downloaded one million times.

The IPO market is pretty miserable at the moment. So far this quarter there has been just one IPO pulling in over $800m compared to 20 last year at the same time raising $24bn.

So if this is a bait and switch move, who would want to buy the company.

First out of the gate are the original founders Niklas Zennstrom and Janus Friis who have reportedly approached a number of private-equity firms about buying their baby back.

eBay however might not be willing to do a deal here, notes the blog TechCrunch, given that it is "embroiled in a legal dispute over Skype's licence to certain peer-to-peer technologies which Skype founders still control...and which form the technological foundation of Skype."

There are of course other possible buyers.

Microsoft was in the running last time and could well be interested again. Yahoo was also there but it's doubtful they would be able to play ball at the moment given their own financial woes.

Google is steadily moving into the world of mobile with voice search, Grand Central and of course its Android platform. The search giant has declared time and again that mobile is the future and with Skype's 405m user base, it would give them one fantastic kick start.

But analyst Jon Arnold of J Arnold & Associates notes that they "don't have an end point, their own phone. They have a platform but are light years behind where Apple is."

In fact Mr Arnold believes that Skype is the perfect fit for Apple.

"If there is a cool move to be made here, it is Apple and Skype getting together," said Mr Arnold.

"Skype has this amazing user community and Apple has the cool products but it doesn't have a community like the Skype community. The two together would become a global carrier in the true sense of the word because most carriers are geographically based and these two are so rooted in the world of the internet that it is native to them."

Mr Arnold said he has even devised a name for the Skype/Apple product and it's Skapple!


  • Comment number 1.

    Probably Ebay doesn't know but there is a very good auction site - its called EBAY - they should stick SKYPE on auction there

  • Comment number 2.

    I wonder if in the history of the world anyone has ever used those Skype links on ebay to contact a seller. It was always a doomed acquisition, everyone said so at the time and here we are today. I also don't see this as a fit with Apple who are doing very well feeding on a cut of subscriptions with their mobile network partners hence a crippled Skype in the iPhone which works only over wi-fi and not 3G.

  • Comment number 3.

    I don't see a fit here with Apple at all, especially not when Apple already has it's own internet phone software already and are more likely to build on that then try to integrate Skype. Apple never buys-in, they always build themselves or buy very early, they would never consider a purchase like this.

    Google, Microsoft and Yahoo also already has their own software integrated into their own platforms. While the existing use base might look desirable, getting that user base to migrate to some merged/integrated product would be tricky, especially when many user would prefer a different platform.

    No, I think the standalone route is the best solution for Skype as a product and service, which would enable it to continue to operate across all platforms and keep that user base intact.

    Now, what would be cool is if the buyer opened up the Skype protocol and network, it would become the de-facto standard overnight and we could converge on a common platform for calling services and not have to have 3 or 4 different clients and contact lists to keep up with all our contacts. Think of how useless the telephone system would be if it worked like internet calling currently does. Shame the big players (MS especially) would never let that happen, there's too much self-interest in retaining their walled gardens.

  • Comment number 4.

    Google already have their own form of 'Skype'. So it would be no use to them.

  • Comment number 5.

    Skype works really well. I certainly don't want to be forced to buy an Apple anything as that will cause far too much techno change in my work and travel kit to make it evenly remotely interesting.

  • Comment number 6.

    Google, Microsoft and Yahoo all have their own versions of Skype, true.

    But skype actually has users.

    I hope with all my heart that apple stays away, although if they did go for skype it would open the door for others.

    If itunes for windows is anything to go by apple would ruin skype.

  • Comment number 7.


    I live in China where ebay got it's rear end whooped by another site, taobao, a few years ago.

    One of the main cores of taobao's success is that you can chat to almost all of the sellers live inside the website. I find it strange that nobody has tried to contact me on ebay via skype.

  • Comment number 8.

    Skype is a fantastic product and is the future. It is also a major driver in increased broadband speeds. Once they get an online video "conference call" sorted out I can see it making inroads into air travel as well.
    If Apple got hold of it, I think they will kill it!
    Either by "burying" it or by converting it so that you have to buy some piece of Apple hardware to use it and it will end up like I-tunes in comparison to MP3

  • Comment number 9.

    How about Cisco? I'm not sure they have it in the budget for another big acquisition, but they certainly have a taste for technology that puts them in front of more consumers.

  • Comment number 10.

    Skype would work better if they took the Skype packaging away.

    Realistically, Skype should be an embedded application that can be used on most (if not all if Internet Explorer is capable of playing game for once) browsers and would also be a very welcome addition to the new generation of game consoles, mobile phones and media centre's.

    Skype is the perfect fit for the Internet, the problem is how it is distributed.


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