EBay's Skype Bubble Bursts |
| BusinessWeek - Oct 2, 2007 |
When eBay bought Skype Technologies for $2.6 billion in late 2005, few could fathom why the online auction company saw so much in a money-losing Internet phone service. Two years later, eBay is admitting it made a mistake.
On Oct. 1, eBay confirmed that it overpaid for Skype—by nearly $1 billion—and that the popular Web-calling business has not performed up to the rosy forecasts set back in 2005. In announcing a $1.43 billion charge against profits, eBay also revealed a broad management reshuffle in which Skype co-founders Niklas Zennström and Janus Friis will be leaving their posts.
About a half-billion dollars of the charge is for a payment to Zennström, Friis, and other early Skype investors. Although it might sound like a plump farewell present, that payout is well short of the $1.7 billion those shareholders stood to receive from eBay if Skype had met the targets for users, revenue, and profits set in the 2005 buyout agreement.
Read Full Article from BusinessWeek
- Posted: 2007-10-02 10:34:12
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