EBay is preparing to float Skype as a standalone business
Auction site eBay has announced plans to spin off Skype, floating the VoIP service as a standalone business from early next year.
The announcement follows news that Skype founders Niklas Zennström and Janus Friis, who sold the system to eBay for $2.6bn (£1.74bn) in 2005, are trying to raise capital to buy it back.
"Skype is a great standalone business with strong fundamentals and accelerating momentum," said John Donahoe, president and chief executive of eBay.
Donahoe added that Skype has very little in common with eBay's core businesses, and would be better off on its own two feet.
"This will give Skype the focus and resources to continue its growth and effectively compete in online voice and video communications," he said. "In addition, separating Skype will allow eBay to focus entirely on our two core growth engines - e-commerce and online payments - and deliver long-term value to our stockholders."
Specific timing of the initial public offering (IPO) will be based on market conditions, but the move could make it easier for Zennström and Friis to regain a controlling interest in the company or buy it out altogether.
When Donahoe took the top spot at eBay in April 2008 he outlined plans to spend a year evaluating Skype's suitability within the rest of the company's portfolio, at the same time appointing a new management team led by Josh Silverman.
Skype has being going from strength to strength, meanwhile, generating revenues of $551m (£369m) in 2008, up 44 per cent from 2007. The service had 405 million registered users by the end of 2008, up 47 per cent from 2007, and user metrics improved significantly throughout the year. EBay predicts that this trend will continue, and that revenues will top $1bn (£670m) in 2011.
"Under the leadership of Silverman and his management team, Skype has become a stronger business in the past year, and I expect it will be even stronger a year from now," added Donahoe.
"Skype has accelerating global user growth and strong fundamentals, diversified revenue streams and is competitively positioned in a large market. We expect Josh and his team to continue delivering results as we prepare Skype for an IPO."
Skype is targeting all segments of the market, focusing on corporates with the recent launch of its Skype for SIP beta programme, and on consumers with the introduction of Skype on the iPhone, which saw more than one million downloads within 36 hours.
© Incisive Media Investments Limited 2010, Published by Incisive Financial Publishing Limited, Haymarket House, 28-29 Haymarket, London SW1Y 4RX, are companies registered in England and Wales with company registration numbers 04252091 & 04252093
Do you agree?
Key Questions not Answered!
Key Questions to Mr Donohoe CEO EBay:-
What was the point of buying skype in the first place if only
after a year you are going to cast it free?? Waste of time and money if you aske me!!
Key Question to Mr Zennström and Mr Friis :-
If Skype means so much to you both why did YOU sell it to eBay??? Now if you do buy it back you will probably pay a lot more then what you sold it for!! Very Bad Business!!
Posted by Peter Kepa, 15 Apr 2009
Maybe too late?
Skype has suffered from dreadful customer support, maybe in part to eBay being primarily an auction house, not a comms provider. To quote Skype support "Our goal is to respond to all customer e-mails within 72 hours". There is no telephone support or even 'live-chat'. An absurd ommision for a company vying for the business comms market. Hopefully, being sold off will give it the impetus it so badly needs to raise it from the level of hobbyist product and realise some of its potential.
Posted by Loons, 15 Apr 2009