Is eBay
Several media outlets are speculating that eBay's online voice chat subsidiary may be sold off, based on comments that eBay CEO John Donahoe made during last week's conference call.
"Skype is a great standalone business," Donohoe said last week.
He's right. It's a product built for recessionary times, so it's no surprise to see folks turning to free Skype-to-Skype calls or relatively inexpensive calls to landlines and mobile phones. Revenue grew 44% to $551 million last year, with a whopping registered user base of 405 million people.
Donohoe has called Skype an excellent standalone business in the past. The key exchange in last week's call came when an analyst asked what eBay was doing to maximize Skype's value for eBay shareowners.
"I think we're now confident that the synergies between Skype and the other parts of our portfolio are minimal," Donohoe ultimately conceded, as recorded by SeekingAlpha.com. "We are going to continue to run and operate the business. It's not a distraction currently and at such time when we have further announcement to that, we'll let you know, but for now, we are very pleased with the momentum of the business and it's not a distraction."
Aren't headstrong NFL players that are called "not a distraction" typically traded away? If there is a "further announcement" to make, isn't it likely that Skype is either being spun off or sold?
It was nice to know you, Skype.
The reality here is that Skype was never going to live up to its $2.6 billion price tag. Despite its heady growth, it only accounts for 6% of last year's $8.5 billion in revenue. That's proportionally out of whack for a company commanding a measly enterprise value of roughly $13 billion these days.
Who would buy Skype? It's hard to see broadband phone service companies like Vonage
Ultimately, this only makes sense as a bidding war between Google
Besides, with eBay.com's marketplace division suffering a 16% decline in its latest quarter -- as PayPal and Skype posted double-digit gains -- maybe eBay is selling the wrong verb. We all know where the distraction is at eBay. It's eponymous.
More items in the eBay bid basket:
- The company's latest quarterly report was a dud.
- Things just haven't been the same since Meg Whitman went away.
- It's So Much Worse Than You Think