Skype could be bought before any IPO; Gauging valuation

Analysts were busy Wednesday figuring out what Skype would be worth as a public company---$1.5 billion to $2 billion seems to be the consensus---but few prognosticators ever expect to hit the stock exchange. Why? Another entity will buy Skype before it goes public. 

EBay on Tuesday announced plans to launch a Skype IPO in 2010 (Techmeme), but what the company really accomplished was establishing a price band for the VOIP service. Meanwhile, eBay also indicated that it would be more focused on e-commerce and is serious about shareholder value. 

In a research note, Gabelli analyst Robert Haley reckoned that Skype was worth $1.5 billion to $2 billion as a publicly traded company. But by signaling an IPO for Skype eBay also seems to have opened the auction floodgates. 

He wrote:

Considering its growth and margin profile, we believe multiple of ~10x is justified, and believe that Skype could be valued at $1.5-2.0b. EBAY is carrying $1.8b of Skype goodwill on its balance sheet.

Haley noted there are multiple possible Skype acquirers including:

• Telecom or cable companies looking to add a brand and large user base to their VOIP and triple play offerings.
• Google, which would integrate Skype into everything from Gmail to search to Google Talk. 
• Microsoft, which could integrate Skype into Windows. Skype, meet Sharepoint.
• A social network like Facebook. 

William Blair analyst Jack Murphy is also arguing the Skype-will-be-bought-before-an-IPO case. Murphy wrote:

We believe that management has been actively looking for buyers, but concluded that a Skype IPO would create the most value for eBay shareholders. While management plans on a 2010 IPO, we would not be surprised if a private market deal transpired first.

In any case, eBay could seriously cut its losses on Skype deal. EBay paid $2.6 billion and payouts for Skype in 2005 and still carries $1.8 billion in goodwill on its books. If eBay could get $2 billion for Skype that would go a long way toward closing one big detour from its core business.