At eBay, Is Skype There to Stay?

To earn its keep at eBay, the Internet calling service needs to goose growth and gain traction on mobile phones. Otherwise, a sale may be in the offingJosh Silverman is on the defensive. As the head of eBay’s Skype unit, he’s happy to talk about his company’s more than 330 million users and six straight quarters of profitability. But the topic he has been asked to address more frequently in his six months at the helm is how eBay could have so grossly overestimated Skype’s value when in 2005 it paid more than $2.5 billion for the Internet calling service. “There is this perception gap related to eBay and what people thought eBay would do with Skype,” Silverman says.The gap is more than just a matter of perception. Executives at eBay bet Skype’s cheap and easy-to-use Internet calling tools would help eBay users land more sales. But it turns out many of the small business owners who market their wares on eBay had little time to sit by the phone to take questions, and in October, eBay was forced to concede it overpaid, recording expenses of $900 million.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.