eBay will consider selling Skype

In an interview with the Financial Times, the auctioneer's CEO said his company is trying to make better sense of its giant 2005 acquisition.

Has eBay about had it with Skype?

New eBay CEO John Donahoe told the Financial Times the online auctioneer will consider selling Skype if it can't find a way to make the service better help eBay's e-commerce business.

"What we're testing this year are the synergies," Donahoe told the Financial Times. "If the synergies are strong, we'll keep it in our portfolio. If not, we'll reassess it."

Donahoe did say Skype is doing well. It generated $126 million in the first quarter, up 61 percent from a year ago. This year, it's expected to generate $500 million in revenue and be profitable. Overall, first-quarter eBay revenues reported Wednesday were up 24 percent from a year ago to $2.19 billion. Profit was $460 million, up 22 percent from the same quarter a year ago.

But the question about Skype, which eBay acquiredfor $2.5 billion in 2005, has never been whether it's a decent business, it's whether it's a good fit for eBay. By the end of the year, the company will finally be closer to that answer.

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About the author

Jim Kerstetter has been writing about the high-tech industry since the 1990s. He has been a senior editor at PC Week and a Silicon Valley correspondent at BusinessWeek. He is now senior executive editor at CNET News. He moved back to Boston because he missed the Red Sox. E-mail Jim.

 

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