eBay to IPO Skype in 2010

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Fresh from losing StumbleUpon after its SU founders bought back the social bookmarking site from eBay, it seems like eBay doesn’t want the same incident with another problematic online property – Skype. Hence eBay announced that it will be putting Skype up for IPO bidding sometime in 2010.By putting Skype into IPO, eBay is just putting some precautionary measure that will dampened the company’s reputation anew once Skype succeed in buying back the company from eBay. It’s still a whole year time frame between now and 2010, Skype can still perform well into the expectations of eBay within that period. And if that happens, eBay can simply withdraw Skype’s IPO status.

But should Skype fails to perform within eBay’s expectations which at this time stood at a 50-50 chance despite increasing Skype usage propelled even more by the Skype iPhone app, eBay simply have to push through with the Skype IPO and choose the best bid that would put the most meaningful value for Skype.

And eBay’s President and CEO John Donahoe’s reason for putting Skype into IPO?

“… 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. 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.”

Arnold Zafra
Arnold Zafra writes daily on the announcements by Google, Ask.com, Yahoo & MSN along with how these announcements effect web publishers. He is currently building... Read Full Bio
Arnold Zafra
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One thought on “eBay to IPO Skype in 2010

  1. Arnold – I would recommend sticking to blog posts on what you know best. Finance is obviously not your forte. No company spins off a division for an IPO because it’s not performing well. eBay is spinning off Skype because it realizes (as most of us did when it bought the company) that there are very few synergies between Skype and the core eBay business and thus it makes sense for it to operate as a separate legal and financial entity. Further, if Skype isn’t performing well then it’s IPO will be a miserable flop benefiting no one.

    Stick to SEO posts and leave the financial and corporate strategy commentary to the Wall Street boys.