EBay looks for Skype payoff

By Scott Moritz, writer

Ebay (EBAY) rolled out Skype’s unlimited calling plan in a bid to keep up with rivals and – let’s face it – to finally land some paying customers.

For $2.95 a month. U.S. Skype customers can make unlimited calls anywhere in the United States. Calling plans from the United States to Europe cost $9.95 a month.

The move comes amid speculation that eBay might be considering a carve-out option for the voice-over-Internet-protocol, or VOIP, service that counts 309 million registered users.

eBay’s $4 billion Skype bet hasn’t paid off as the company hoped when the deal was signed in 2005. Last year, the online auction shop took a $1.4 billion charge to write down some of the unrealized value of that deal. This year, some eBay investors are hoping for a different sort of transaction – a sale.

“This is something that belongs with another entity,” says Darren Chervitz with the Jacob Internet Fund, an eBay investor. “Skype makes more sense at a place like Google (GOOG).”

Skype software allows PC users with microphones and cameras to make free calls to other Skype users or cheap calls to conventional phones. The service was expected to enhance communication between buyers and sellers in eBay’s auction market.

Big tech companies that generate a lot of cash are justifiably wise to make bold bets on innovative acquisitions, says Chervitz. Sometimes it works, like eBay’s purchase of PayPal, and other times it doesn’t, like with Skype, he says.

Chervitz would like to see eBay get some value back from Skype while it still can. “They should sell it now, says Chervitz, “before the technology changes.”

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Filed under Google, Internet, VoIP, ebay, skype

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I agree with you, why sell Skype while they are on the way up. Stupidness!!!!!!

Posted By James, Warner Robins, GA : October 15, 2008 12:18 pm

I hope eBay does not give into the pressure to sell Skype just becuase the Analyst want Google to have it. I don’t see Google doing anything more productive with it. This is just a matter off Analyst bias and them wanting Google to own the most successfull VIOP company in the Market. I hope eBay give them all the finger and stays the course, Skype will continue to grow for them. Don’t give in to the pressure eBay.

Posted By Don’t Listen to the Street, CA : April 21, 2008 8:31 pm

If Chervitz thinks that the value lies in the technology, he doesn’t understand the value of this company. It’s all about the network of 300+ Million online customers, that happens to also be the fastest growing customer base on the Internet. Why do you think Microsoft still has a monopoly after 20 years with crappy technology? It’s because they own the network. The technology has nothing to do with it. And this network happens to be the most monetizable – why do people pay millions of dollars for SuperBowl ads? – because everyone is watching. Well, everyone is watching on Skype – 300+ million global customers and growing. eBay will print money with Skype. There is absolutely no way that they should sell it.

Posted By joe, boston, ma : April 21, 2008 3:16 pm

If eBay sells Skype, they would be making the biggest mistake in their company history. Skype is the most valuable asset on the Internet to date and is the gateway to winning Web 2.0. Whoever owns Skype wins. Why would someone sell it, especially when they are just starting to tap into its value? This makes no sense whatsoever.

Posted By joe, boston, ma : April 21, 2008 3:11 pm

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