Larry Kless' Weblog: Is eBay Finally Putting Skype on the Auction Block?

Saturday, January 31, 2009

Is eBay Finally Putting Skype on the Auction Block?

There been a lot of speculation the last week about whether or not eBay is ready to cut its losses and sell off Skype to the highest bidder. I blogged about this last April in my post, Google to Buy Skype?, and now almost a year later in tougher economic times it seems that the rumors are more likely now. A number of stories were published last week including this one by Sarah Lacy on Yahoo Finance which she says, "Reports are surfacing that eBay may be quietly putting Skype on the for-sale or for-spin-off block. This is something analysts have hoped for for a long time, but has eBay missed the window by stubbornly insisting Skype was a fit with its core business? My guest Om Malik says that may be the case. He recently wrote about Skype’s slowing growth on his GigaOm blog. Click on the video to hear who Malik says might buy Skype, and why he says Henry Blodget is crazy to think the company would get $3 billion in this market."

In his blog post, Should eBay Spin Off Skype? The Debate Continues, Om says, "In my opinion, which I shared with Sarah Lacy and her viewers yesterday, Yahoo is a much better buyer for Skype as it has experience working with consumers and offering paid services. As for other likely buyers, I would put large telecom operators such as British Telecom and France Telecom high on the list. A reader points out that Hutchinson’s 3 could be a good buyer as well.

As far as I’m concerned, Skype isn’t as richly valued as analysts it is; I think it would be lucky to get three times its revenues. My best guess would be that they fetch between $900 million and $1.2 billion. Why? As I pointed out last week, Skype has some serious growth challenges. But don’t tell that to analysts, who measure everything with a hockey stick."