eBay replaces Skype CEO, writes off $1.43 billion
Plus: Nokia buys Navteq; Dow sets record; Palm hit by first loss in 3 years — The Skype is falling at eBay: Online auction giant eBay admitted today that it paid too much when it bought Net phone service Skype for $2.6 billion two years ago.
Context & Ripple Effects
The write-off closes a two-year arc of doubt. Skeptics flagged the fit early — a June 2006 Techdirt piece called eBay's Skype integration plans unconvincing, and by November 2006 the International Herald Tribune was still 'waiting for Skype to pay off for eBay.' Silicon Alley Insider declared the deal officially a bomb the day before this report, and Business Week's same-day piece asks whether eBay's answer is fixing Skype or switching to rival Jajah.
What changed today is eBay's own admission: a $1.43 billion impairment on the $2.6 billion purchase and a new CEO at the unit. The Guardian's pickup shows the story travelling well beyond tech press, landing alongside Nokia's Navteq buy as the market weighs which large acquisitions are holding up.
First-order effects
- eBay shareholders absorb a $1.43 billion charge against earnings, and Skype gets new leadership tasked with justifying its place inside an auctions-and-payments company.
- Business Week's framing puts Jajah in play as an alternative, meaning eBay's VoIP strategy itself — not just its staffing — is now under internal review.
Second-order effects
- Rival VoIP operators like Jajah gain leverage: with eBay publicly questioning its Skype bet, competitors can pitch carriers and users on the uncertainty at the incumbent.
- Other acquirers of hot consumer-internet assets face harder diligence questions — the Navteq deal announced the same day will be priced against the memory of Skype's write-down.
Third-order effects
- If the pattern holds, big portals' strategy of buying user bases ahead of proven revenue models gets repriced by boards and investors, pushing deal structures toward earnouts and staged payments rather than upfront premiums.
- A write-down of this size invites activist pressure on eBay to separate Skype from the core marketplace business rather than keep subsidizing a mismatched asset.
The trend: Web-era acquisitions built on user counts rather than synergies are entering their accountability phase, with 2006's premium-priced VoIP and media deals being marked to reality.