eBay to launch a Skype IPO in 2010

eBay announced Tuesday plans to spin off its Internet phone and video-conferencing service, Skype, with an IPO in the first half of next year.

The decision comes four years after online auction giant eBay acquired Skype for $2.6 billion, with the plans to offer customers the ability to discuss their transactions in real-time. But over the course of the four years, eBay found its acquisition failed to provide the synergies it sought.

John Donahoe, eBay's chief executive, said in a statement:

Skype is a great stand-alone business with strong fundamentals and accelerating momentum. But 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. This will give Skype the focus and resources required to continue its growth and effectively compete in online voice and video communications.

Although eBay plans to launch a Skype IPO in the first half of next year, the company noted its exact timing will be based on market conditions.

Last year, Skype generated $551 million in revenues, up 44 percent over the previous year. The number of Skype's registered users has increased to 405 million at the end of last year, up 47 percent from the previous year.

Over the past year, eBay has been weighing its options regarding Skype's fate. When the company announced Donahoe as its new CEO last spring, eBay indicated the online auction giant would take a year to evaluate the future of its online phone and video-conferencing service.

Meanwhile, reports surfaced earlier this month that Skype's founders were interested in repurchasing the company, with the aid of private equity firms KKR, Warburg Pincus, Elevation Partners, and Providence.

eBay shares rose 3.76 percent in after-hours trading on Tuesday to $14.92 a share. During the regular session, eBay closed down 1.71 percent to end the day at $14.38 a share.

[shootthecops]

skype + phone = dirt cheap calls

[Shawn_Anarchy]

i think that this is awesome. combined with their great service and rates, this could be a killer service. i think that all this needs is support for calling your skype contacts... maybe even videophone functionality.

[CBSTV]

"The expected synergies" did not materialize. How surprising. The same occurred in broadcast media when stations and networks merged.

[ddanckaert]

I've been a Skype *paying* customer for several years now. I have a DLINK SPH200D Skype Phone, and even got one for my mother-in-law. We have skype-out, and skype-in numbers. With all my experience with Skype, I can tell you the following: (1) Skype biling stinks. (2) Skype customer service is completely inaccessible. I had to interact with a moderator on a Skype forum (nice guy) to intervene with Skype to unlock my account after some Taiwanese person hacked my account and drained my balance. They never responded to any of my requests through their web site. (3) Skype's sound quality via Phones is of subpar quality.

If you have a headset and use Skype through a computer, the sound is fine. But that doesn't replace the utility of a handset.

What did I do, switch to Vonage. Costs more than skype, but way less than Verizon with many more services and capabilities. I love it--it is awesome.

[Universal_Indie_Records]

I use Skype as an expensive phone for my business for which I pay a nominal fee. I'd love to see them offer toll free numbers.

[john10099]

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