From the moment eBay announced its purchase of Skype two years ago skepticism ran high over the price, $2.6 billion, plus performance payouts that could add $1.7 billion more with all the talk of synergy. As is usual in all these buy-outs, the picture got no clearer as time went by. Today, in what will undoubtedly be a blow to the Skype founders' seller rating, eBay finally acknowledged that its bid for the VoIP firm may have been a tad overenthusiastic and that whatever expectations it had were not being met. EBay announced that in the quarter just ended, it will take $1.4 billion in write-offs and charges related to the Skype acquisition. About $530 million will go to former Skype shareholders to help them forget about those additional performance-based payouts. And eBay will write off about $900 million in Skype-related "goodwill" to more accurately reflect the acquisition's value. And just in case the message wasn't clear, Skype co-founder Niklas Zennstrom was eased out of the CEO's office. So, what should eBay do with its tarnished toy? Henry Blodget has an answer: sell it to someone who could put it to use, like Yahoo, Microsoft or Google. "Skype is rapidly surrendering its early dominance of soft-phone VOIP to other more focused competitors, and if it stays within the eBay fold, we think further write-downs will be in the offing," Blodget writes. "Skype was a $2-$4 billion eBay hail-Mary pass, and it just officially fell incomplete. EBay should just acknowledge that and move on." Seems to me like the usual Hi-Tech Tulip Mania!
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Shouldn't that be spelled H.Y.P.E?
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