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Skype to be put under the hammer?

Posted By TelecomTV One , 13 March 2009 | 0 Comments | (0)
Tags: ebay skype

Speculation is again mounting that eBay is planning to put its VoIP arm, Skype, up for sale (with a reserve?).

The online auction company bought Skype $2.5 billion in 2005 with the expectation that it planned to do something clever with the VoIP capability by enabling more 'frictionless' contact between buyers and sellers on the auction site.

That never happened but Skype grew as a stand-alone business (although not spectacularly as a revenue earner) and eBay has spent the last three to four years defending its decision to spend all that money on a bit of software.

EBay has now told analysts that Skype returned net revenues of 20 per cent on $550 million in sales in 2008 and that it expects those sales to have more than doubled by 2011. But executives also refused to rule out the possibility of a sale to a suitor with more synergy for a VoIP service than eBay apparently has.


Whatever the outcome, a new eBay strategy for Skype appears to be under way. This month Skype announced that it was making its new SILK speech codec (the technical core of the whole thing and included as part of Skype 4.0 for Windows) available royalty-free for third party software and hardware developers.

Technical experts say SILK is the real deal, providing major improvements to sound quality (super-wideband audio) and optimising call quality.

EBay's decision to make SILK freely available is designed to establish it as a standard and further entrench the position of Skype and, beyond that, may be a prelude to a further opening up. It's been the closed nature of the Skype system that has made many technical types wary of using and supporting it in other products and systems.

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