eBay takes write-down on Skype and changes team

October 1, 2007

Jump_the_sharkBack in 2005, it was pretty clear that eBay had ‘jumped the shark‘ with the big Skype acquisition that was going to bring internet calling to eBay and reduce friction in transactions.

Well, today eBay announced  that they are going to pay $530m of the $1.7b earn-out and take a $900m one-time charge on the decreased value of the Skype asset they paid a whopping $2.6b for back in 05.

One thing I’ve never understood about this acquisition is it seems like eBay didn’t get any lock down on the intellectual property/IP as the founders seemingly took the peer-to-peer Skype technology and started Joost, which eBay doesn’t enjoy any upside on.  I’ve also heard rumors that eBay doesn’t even own/have exclusive on the general Skype technology/idea (inet calling) and the Skype founders could start a competitor if they choose to.

Along that thread, eBay today also announced that Niklas Zennstrom has stepped down as CEO (probably spending all his time on Joost anyway) and they are yanking Henry Gomez back to San Jose as well.  For the interim period they have placed Michael van Swaaij, eBay’s Chief Strategy Officer (“Hey this skype thing was your idea!”) to run Skype until they can find a new CEO.

At eBay seller get-togethers, at the end of the day drinking beers at the hotel bars, this topic always comes up: “What if eBay had spent that $3b to fix the core site instead of  buying Skype?  Would they be in the pickle they find themselves in today?”

Well, to quote the Fonz, all I can say is:  “Aaaay!”