eBay to sell Skype

Submitted by acohill on Tue, 09/01/2009 - 14:56

eBay has announced it is selling Skype. The auction giant bought the VoIP phone company several years ago for $2.6 billion, has already written off $1.4 billion and apparently hopes to get $2 billion in the sale--Meaning Skype never made eBay much money. In a related story, Skype has announced it is doubling its rates for international calls, where the firm makes most of its revenue.

Skype calls can be crystal clear or maddeningly noisy, and part of the problem is that Skype carries a lot of traffic across the public Internet, meaning so-so quality as a voice call traverses several different non-Skype networks. It is not a problem inherent to VoIP--done right, VoIP phone systems can be better than traditional copper-based land lines. But Skype has one of those "we'll give a lot of service away for nothing and make it up in volume, or international calls, or subscriptions, or something" business models. Skype's biggest asset is excellent VoIP software--it is an excellent tool that supports text chat, voice calls, and video calls. If they figure out their business model, the firm will do well.