EBay Gives Skype Some Space

Two-and-a-half years after eBay bought Skype, the online auction giant has moved away from trying to create new, merged capabilities through the acquisition and is letting Skype be what it is.

"There's less focus at eBay today on finding the place where eBay and Skype intersect on the Web and mash up to create a new ... communication paradigm for eBay, and more focus on Skype growing its business and eBay growing its business," said Jonathan Christensen, Skype's general manager of audio and video, at the Emerging Communications Conference (eComm) in Mountain View, California.

The deal in October 2005 disrupted the pioneering VOIP (Voice Over Internet Protocol) software company for a while, Christensen said.

"In some ways, we stalled," he said. "There's almost always a period of integration (when) a lot of weird things are tried, and some work and some don't, and there's defocus." Along with that, there has been a management shake-up at Skype, he added. Founder Niklas Zennstrom resigned last October. Josh Silverman, CEO of eBay's Shopping.com unit, became CEO of Skype last month.

Today, however, the relationship between eBay and Skype is going "very well," Christensen said. "The projects that I'm leading on my team ... for the next two years, three years ... are groundbreaking," he said. He declined to give details of what's coming up, but in a speech at the conference, he recounted the history of Internet voice and said the next frontier is the mobile arena.

The approximately US$2.6 billion acquisition of Skype raised eyebrows among observers who didn't see a good fit between the two companies. It was not until June 2006 that eBay launched a limited trial of Skype buttons in its marketplace. The buttons let eBay buyers and sellers launch Skype and talk or text-message before making a purchase. Beginning last October, they became available for sales of all categories of products.

Last year eBay took an impairment charge related to the Skype deal and said it was disappointed in Skype's performance in the short term regarding user activity and monetization. EBay said it still believed Skype was a very valuable asset and was interested in the potential of services such as the SkypeFind business listing feature and SkypePrime advice service.

Skype now has 276 million regular users and is profitable, Christensen said.

"That sense of innovation and hard work and startup-ness is very much alive at the company," Christensen said.