Tuesday, October 02, 2007

Musings On The Recent Skype News!

Yesterday's Skype news is still the biggest eBay story going, with hundreds of blog posts and articles about how this acquisition was such a bad deal.

Skype was one of several bad acquisitions by eBay management, mostly because they didn't do enough due diligence to determine that eBay sellers didn't want the service. Once they were unable to integrate the service into the everyday life of sellers on eBay it became increasingly more difficult to monetize the service. Skype is doing well in markets where telephone calls are still expensive (Asia and Europe) but not in the US and that challenge is not going away.

At this point eBay management is better off selling Skype all together. Perhaps yesterday’s announcement is the first move in that direction.

Ina Steiner posted an eBay Acquisition Scorecard on her Auctionbytes blog this morning and it is evident the company has had way more misses than hits.

With more than $3 billion in cash and a $3 billion credit line, what is this management team going to do to instill confidence that their next acquisition won’t be a similar failure?
Are they going to be Gun-shy from here on out?

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