eBay and Skype - Can't Make This Stuff Up

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AuctionBytes Blog
News and insight focusing on
ecommerce and the online auction industry
by Ina Steiner, Editor of AuctionBytes.com

April 10, 2009

eBay and Skype - Can't Make This Stuff Up

By: Ina Steiner

Fri Apr 10 2009 22:51:26

The New York Times said Niklas Zennstrom and Janus Friis, the pair who founded Skype and sold it to eBay for far more than it was worth, may now want to buy it back. And the kicker? The Times said a company also founded by the pair has terminated eBay's license for a patent used by Skype. This would make anyone but the pair leery of buying Skype due to legal issues, according to the paper.

eBay CEO John Donahoe made it clear Skype has no synergies with eBay or PayPal at the company's recent Analyst Day. But as any eBay seller knows, a sale with only one bidder does not make for an optimal selling price.

You can read the article on the New York Times website.

Comments (33) | Permalink

Readers Comments

eBay and Skype - Can't Make This Stuff Up

by: Santa Claus

Fri Apr 10 23:08:32 2009

Ho Ho HO!

Santa Claus here!

I use Skype all the time to keep in touch with all my friends around the world!

I would never use eBay again!
Never, Never & even never!

eBay is forever on my NAUGHTY list!

Santa says wash your mouth out with soap for listing on eBay!

I wish everyone reading this a very Merry and SAFE 2009.

Don't forget to visit my site and enjoy a real gift giving place.

eBay I am watching you and you are not being a good global company. Get back to your roots and get rid of your CEO, GM did and they will be far far better off.

Bye for now.
Love
Santa Claus
ps. We are all Children of the world!

eBay and Skype - Can't Make This Stuff Up

by: Santa Claus

Fri Apr 10 23:11:26 2009

Forgot to leave my site link!
Ho Ho Ho

Love
Santa Claus

eBay and Skype - Can't Make This Stuff Up

by: Call Me

Sat Apr 11 00:09:47 2009

Going to be another $billion write down ...how much more can eBay take ?

eBay should be doing very well in this Global Crisis but a great many powersellers that I know are going thro ANOTHER cycle of very low sales (just like Sept/Oct last year)

I just received ANOTHER ebay seller survey...I completed it fairly and put at the end that I no longer sell on ebay due to high fees and poor sales all linked to DSRs and Best match

sKYpe could be a gold mine if taken away from eBay

eBay and Skype - Can't Make This Stuff Up

by: Pat

Sat Apr 11 08:12:25 2009

Gotta believe that the founders of Skype see the potential of their service, and what a waste its been in eBay's hands. eBay just isn't a company with any vision. Watch Skype take off once it's out of eBay's portfolio.

eBay and Skype - Can't Make This Stuff Up

by: Ed Gadfly

Sat Apr 11 08:52:53 2009

eBay will insist the transaction goes down through PayPal.

eBay and Skype - Can't Make This Stuff Up

by: Niklas' Bud

Sat Apr 11 09:14:36 2009

Zennstrom was the founder of another company, Kazaa, that allowed stolen copyrighted material to be shared on it's platform. In fact, there was an arrest warrant in the US for Zennstrom, until the suit was settled for $100 mil. Skype was his next scam - er, company. Which they pumped and dumped in eBay's lab.

It would be seriously funny if eBay gets boned twice by the same guy. Says alot about the people at the helm of eBay.

eBay and Skype - Can't Make This Stuff Up

by: Huh?

Sat Apr 11 09:18:32 2009

Sykpe? over-hype. Yipes !

eBay and Skype - Can't Make This Stuff Up

by: John

Sat Apr 11 09:58:58 2009

The next time Meg Whitman starts bragging about her experience running ebay makes gher suitable to be Govenor, someone should bring up the Skype fiasco. She claimed at the time it was a future revenue stream bonanza. Strange she never brings it up in her stump speeches around the state. I wonder why? Could it be she is less than honest narcistic person / politician wannabe who actually believes the lies her PR poeople have spewed about her.

eBay and Skype - Can't Make This Stuff Up

by: Skype Fan

Sat Apr 11 11:33:17 2009

I've used Skype for several years, and am very impressed by the quality of the connections. I've only used it with PC connections - never paid for Skype minutes - which brings me to my point. eBay paid somewhere in the neighborhood of $2.5 and 3 billion dollars for a company that only now they realize they have no synergies with?

I hope this comes up at the annual meeting later this month. Donahoe may not have been onboard when this purchase was made, but once Skype is gone (and the distraction of it's potential revenue) and the focus of analysts is squarely on eBay and PayPal, it does not bode well for this team of execs.

eBay and Skype - Can't Make This Stuff Up

by: Ming the Merciless

Sat Apr 11 13:29:08 2009

If Zennstrom and Friis committed no fraud by not including or hiding this crucial patent in question, then what a marvelous expository example of Neg Meg Whitman's empty suit leadership -- all show and no go.

This example of gross incompetence should be an enormous embarassment to ebay's legal department as well for failing to catch what now seems to be an extremely glaring -- and obvious -- omission from a contract.

The intrusion of reality into the highly misleading public image Wall Street, the lapdog business press, and spinmeisters created for ebay once again demonstrates just how fundamentally dishonest and unreliable the most of the investment system has become and why radical reform is desperately needed.

Ebay now really only has one intelligent choice -- cut their losses by selling Skype. It will be up to ebay's BoD to stop any protracted lawsuits The Ho might want to file in retaliation.

What an enormous humiliation for ebay's crack cadres of MBAs -- outsmarted by a couple of kids from Bush's "old Europe."

California can NOT afford the NEG MEG Follies.

eBay and Skype - Can't Make This Stuff Up

by: unaware

Sat Apr 11 14:11:54 2009

EBay is already the laughing stock of the tech and internet merchant world.... they might as well add a little more proof to the mounting evidence and sell it back to them!

eBay and Skype - Can't Make This Stuff Up

by: Karma's a female dog

Sat Apr 11 14:22:18 2009

Ina, after spending 10 minutes laughing hysterically, asll I could think of was the Ratt song.... "What goes around comes around" I'm sorry I can't feel bad at someone doing to Ebay what they did to their sellers:)

eBay and Skype - Can't Make This Stuff Up

by: So Greedy

Sat Apr 11 14:29:16 2009

Yup, greed & stupidity, Neg Meg's hallmarks. California, don't vote for her.
These corporate swine think they can pull anything, well people got the power. We just successfully blocked a major publisher from reusing our work for which they never obtained a signed contract, but were threatening us anyway!!!
Don't trust anybody, the first thing these corporate scaks are taught is "it's justy business, man" do any scummy thing to survive. It's great someone outsharked the sharks:)

eBay and Skype - Can't Make This Stuff Up

by: On Lies and Secrets

Sat Apr 11 20:57:27 2009

This really happened? The only response I have is to quote Homer Simpson - ''D'oh!'' The ebay corporation dropped the ball in managing the acquisition of the intellectual property of a critical part of Skype? Isn't an oversight like this tantamount to negligence? Without clear ownership rights to a critical part of the platform, what is Skype really worth?

eBay and Skype - Can't Make This Stuff Up

by: Patrick Alexander

Sat Apr 11 21:32:01 2009

Wow, just wow....

This reminds me of the Krause Auctions fiasco - only on a MUCH grander scale.

And the list of people that are smarter than eBay management grows by two more.

Too much.......

:0)

eBay and Skype - Can't Make This Stuff Up

by: Johnny Donnyho, San Josie & the pussycats, CA

Sat Apr 11 22:44:11 2009

At least they can't blame this one on old Donut hole. And she wants to be governor? Genius, sheer genius.

eBay and Skype - Can't Make This Stuff Up

by: Ming the Merciless

Sat Apr 11 23:05:58 2009

NEG MEG WHITMAN acquired Skype in 2005 for the inflated price of $2.6 BILLION dollars.

She and ebay's crack legal department had nearly THREE years to discover they'd been snookered.

The Ho's had another year as CEO in addition to time he spent in a previous ebay management position to figure all this out.

So while The Ho's attention to detail leaves a great deal to be desired, his principal Skype problem is that he failed to unload it before the kids pulled the plug.

Anyone still holding ebay stock should be prepared to sell one nanosecond after the Exchange opens Monday morning.

Death to ebay corp. in 2009.
NEG MEG WHITMAN in 2010.

eBay and Skype - Can't Make This Stuff Up

by: Karcass76

Sun Apr 12 10:10:09 2009

Skype is a blip on their balance sheet. $381M or so in revenue from Skype out of $7.7B total for eBay. So no negative impact on stock expected. If anything, rumors of selling it helps the stock.

IMO, eBay is better off to sell it. With no synergy with the rest of eBay, and with eBay having already written-off the reduced value of Skype in their books, there's only upside to selling it; a good amount of cash. I think they would be better off to focus their attention and invest in online payment businesses or international marketplaces. Skype didn't work out, but PayPal, StubHub and others were quite good. Hey, I have a few business decisions of my own made in the past that I'd like to go back in time for and fix :-)

eBay and Skype - Can't Make This Stuff Up

by: Ming the Merciless

Sun Apr 12 12:33:34 2009

IMO, the issues of ebay management's willingness to pay a ridiculously inflated price for Skype and their glaring failure to discover they'd bought only part of what makes Skype work far transcends Skype's nearly incidental revenues.

Wall Street has been encouraging ebay to sell Skype for some time and take the write off.

However, with Zennstrom and Friis now literally withholding the key to Skype functionality, Ina hit the nail on the head when she said Skype becomes a substantially less attractive acquisition -- who wants only half of the treasure map with no guarantee of being able to acquire the other half?

What Wall Street SHOULD BE looking at here is the culture of ebay's upper management and the decision making subset.

Too many overeducated, inexperienced managers.

Too many spreadsheets.

Too many consultants.

Too many rotten to the core buyers.

Far, far too much greed and dishonesty.

Not enough customer service.

Not nearly enough honesty or integrity.

Not enough stable technology.

Not enough security.

Not enough common sense.

The majority of analysts have never really understood how ebay worked, and as long as ebay management fed them their annual or semi annual seller fee increases and laid off employees from time to time, most of them were content to swallow ebay kool aid.

What analysts should be looking at for once as a clue to future performance is the dynamics of its core marketplace including the decisions that have affected it.

Just as the changes ebay introduced last year enabled Amazon to overtake ebay, ebay incompetence has vastly diminished the value of Skype.

Investors are facing a much deeper write off than had been anticipated. Should ebay be rewarded with higher stock prices with this kind of sorry track record?

eBay and Skype - Can't Make This Stuff Up

by: Ming the Merciless

Sun Apr 12 12:53:01 2009

Forgot the most important:

Far, far, far too much unwarranted arrogance.

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