EBay will recoup some of its losses on Skype via an initial public offering. Or at least that's what the online auctioneer is hoping.
In a statement, eBay seems to have given its reply to the buyback plans of Skype founders Niklas Zennstrom and Janus Friis. Zennstrom and Friis were reportedly rounding up private equity partners to buy Skype back from eBay for about $1 billion.
EBay apparently thinks it can get more value through an IPO. The company says it plans to spin off Skype in the first half of 2010 with one massive caveat: Pending market conditions.
CEO John Donahoe notes:
"Skype is a great stand-alone business with strong fundamentals and accelerating momentum. But it's clear that Skype has limited synergies with eBay and PayPal. We believe operating Skype as a stand-alone publicly traded company is the best path for maximizing its potential. This will give Skype the focus and resources required to continue its growth and effectively compete in online voice and video communications."
My translation: eBay wants Zennstrom and Friis to raise their price for Skype. And the threat of a Skype IPO is one handy way to get that price up.
The good news is that Skype has a nice chance as a standalone business. Skype's 2008 revenue was $551 million, up 44 percent from 2007. Skype expects more than $1 billion in revenue in 2011. Surely Skype can get more than 1x revenue in an IPO right?
Meanwhile, you could argue that now is a good time to take Skype public. It's growing, it has a critical mass and it could be a fine acquisition target in the future---for a company other than eBay. By plotting an IPO eBay is clearly stating that Skype is worth more. Game on.