14 DAY TRIAL // Rumors that eBay is planning to sell Skype have been officially proven correct in the sense that the giant company indeed intends to separate from the popular calling service Skype, and the first step in this direction is an initial public offering (IPO) planned for the first half of next year – its exact date will depend on market conditions. This announcement follows recent news that the founders of Skype might be trying to raise money to purchase it back.
“Skype is a great stand-alone business with strong fundamentals and accelerating momentum,” John Donahoe, eBay’s president and CEO, declared. “But 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.”
The decision to make Skype a standalone business is based on a schedule presented by Donahoe in April 2008, the moment when he became eBay's CEO. At the time, officials reported they wanted to spend a year evaluating the well-known VoIP service and its potential synergies within existing eBay functions, before making any plans for Skype's future. In addition, Donahoe named a new management team under the supervision of Josh Silverman, and they enhanced performance and increased stability.
In terms of finance, it appears that in 2008 Skype's revenues were of $551 million, 44% higher compared to 2007, and the segment margins were of about 21%. Also, for the same year, the service counted 405 million registered users, a 47% increase from 2007, while the user metrics had improved considerably. On a long term, it is expected for Skype to generate $1 billion in 2011, this meaning it should double the revenues of 2008.
“Under the leadership of Josh Silverman and his management team, Skype has become a stronger business in the past year, and I expect it will be even stronger a year from now,” Donahoe said. “Skype has accelerating global user growth and strong fundamentals, diversified revenue streams and is competitively positioned in a large market. We expect Josh and his team to continue delivering results as we prepare Skype for an IPO.”
On a more recent note, the release of Skype for iPhone was a great success since more than one million people grabbed it within the first 36 hours after it was launched, thus making Skype the most downloaded app for the iPhone in more than 40 countries, such as the UK, the US and Japan. During the first week, downloads passed the two-million threshold, leading to the existence of Skype on more than 6% of iPhones and iPod Touch all over the world and bringing almost 500 thousand new VoIP users.