Top > Business > 2006 > November > 2006-11-20

Skype Ebay marriage not a match made in heaven

Since Ebay announced that it would by the highly successful Voice Over Internet Provider (VOIP) pioneer Skype for the enormous sum of $2.6 billion, investors have been waiting with excitement what synergies Ebay and Skype would find and what new and exciting ways they would find to use them to there advantage. Well, after a bit more than a year passed by, the same investors are still waiting. For a start Skype does not seem to have changed at all, and the only mentionable sign of the marriage at Ebay is the Skype Me buttons allowing potential buyers to chat with sellers before purchasing their products.

All in total, it is a rather disappointing outcome for a merger that had such a big price tag attached to it. Stocks have fallen 15% since the acquisition and some financial advisors are starting to hand out low ratings for eBay stocks. There are rumors that the two very different management styles of the companies have made it difficult two develop a common climate and vision. New ideas are lacking, and more and more voices say that the high price, which might actually end up being over $4 billion once bonuses have been paid, was not justified.

But the problem doesn?t seem to be one of growth. Skype is growing all right, with more than half of the worlds Internet connections having downloaded Skype. Its revenue is expected to triple by the end of this year from $60 million to $195 million. And Skype is on a fast route to become a valuable provider of Internet telephony systems for businesses, once the software is expanded and updated to better fit the industries needs. At the same time though, Skype faces more competition than ever with Microsoft Office and Adobe offering their own kind of Internet telephony with much more detailed interfaces. But at the end of the day, VOIP are going to keep on taking over the world, and the ball to get some money out of it is clearly in eBays court.