eBay takes write-down on Skype and changes team

Back in 2005, it was pretty clear that eBay had 'jumped the shark' with the big Skype acquisition that was going to bring internet calling to eBay and reduce friction in transactions.

Well, today eBay announced  that they are going to pay $530m of the $1.7b earn-out and take a $900m one-time charge on the decreased value of the Skype asset they paid a whopping $2.6b for back in 05.

One thing I've never understood about this acquisition is it seems like eBay didn't get any lock down on the intellectual property/IP as the founders seemingly took the peer-to-peer Skype technology and started Joost, which eBay doesn't enjoy any upside on.  I've also heard rumors that eBay doesn't even own/have exclusive on the general Skype technology/idea (inet calling) and the Skype founders could start a competitor if they choose to.

Along that thread, eBay today also announced that Niklas Zennstrom has stepped down as CEO (probably spending all his time on Joost anyway) and they are yanking Henry Gomez back to San Jose as well.  For the interim period they have placed Michael van Swaaij, eBay's Chief Strategy Officer ("Hey this skype thing was your idea!") to run Skype until they can find a new CEO.

At eBay seller get-togethers, at the end of the day drinking beers at the hotel bars, this topic always comes up: "What if eBay had spent that $3b to fix the core site instead of  buying Skype?  Would they be in the pickle they find themselves in today?"

Well, to quote the Fonz, all I can say is:  "Aaaay!"

Comments

[ebay consejos]

I think I have to agree with Sue, why on earth did eBay take this long in putting Skype buttons on their auctions! It looks as if they are in dire need of assessment when making large acquisitions!

[Sue Bailey]

Whereas I (one of the bottom zillion sellers) don't mind taking calls, and it pisses me off intensely that eBay took two or three years to put Skype buttons onto listings. All those people I could have been upselling, but it seems like they don't even trust their own product.

[Jay Senese]

Scot, you gotta love the stock market, right? Stock goes up today after this announcement ...

Anyway, remember talking to Business Week in 2005? Both you and I were quoted in one article regarding the Skype thing:

"(Scot) Wingo, for one, talked to 50 top sellers and found little support from them. “They’re saying, ‘I can barely keep up with emails. I can’t afford to hire someone to take calls.’ I don’t think your average DVD seller will be too thrilled.” One top eBay seller, Jay Senese, last week told BusinessWeek that he couldn’t imagine any reason to use voice services."

At least we'll have something to crow about in San Francisco this week.

JAY