eBay to spin off Skype with a 2010 IPO

Stephen Withers
Wednesday, 15 April 2009 04:59

Business IT - Technology

Skype has never sat comfortably under the eBay umbrella, and now the online auction giant has decided to spin off the popular P2P voice service. An IPO is planned for 2010.

When eBay purchased Skype from its founders in 2005, the motivation for the deal wasn't obvious. There was some talk of making it easier for buyers and sellers to communicate, but that could have been achieved without an acquisition.

Now eBay has finally admitted that Skype wasn't a good fit.

John Donahoe, eBay president and CEO, said "it's clear that Skype has limited synergies with eBay and PayPal. We believe operating Skype as a stand-alone publicly traded company is the best path for maximizing its potential."

The plan is to make an initial public offering in the first half of 2010.

"This will give Skype the focus and resources required to continue its growth and effectively compete in online voice and video communications," explained Donahoe.

"In addition, separating Skype will allow eBay to focus entirely on our two core growth engine - e-commerce and online payments - and deliver long-term value to our stockholders."

It's not that Skype has been performing badly. Revenue rose 44 percent to $US551 million in 2008, and registered user numbers were up 47 percent to 405 million.

So why is eBay now looking to divest Skype? Please read on.