I come to Praise Skype, not to Bury Them.
History was made on September 12, 2005 when Skype was purchased by eBay. — And I still stand by the words I posted in my September 12, 2005 blog entry: — "Usually we don't see revolutions until after the fact...I suspect that historians might come …
Context & Ripple Effects
Two years after eBay's history-making $2.6 billion purchase of Skype, the bill has come due: eBay has booked a $1.43 billion impairment charge, admitted it overpaid, and replaced Skype's chief executive. Skeptics saw this coming — Techdirt dismissed eBay's earlier Skype integration plans as unconvincing back in June 2006, and by November 2006 the International Herald Tribune was still waiting for Skype to pay off for eBay.
Jeff Pulver, a longtime VoIP figure who has followed Skype since at least its early fan culture, uses his post to argue that the writedown measures the price eBay paid, not the revolution Skype started — a counterpoint to the deal-focused coverage, and one that lands alongside GigaOM's August 2007 reporting that two recent deals showed Skype's relevance in the new work space.
First-order effects
- eBay now carries a $1.43 billion write-off on its books and a new Skype CEO, meaning the subsidiary gets a fresh mandate under owners who have publicly conceded they paid too much.
- Skype's strategic role inside eBay is reopened for debate, with rival web-calling service Jajah floated — though unconfirmed — as an alternative bet for eBay's communications push.
Second-order effects
- Competing VoIP services gain an opening while Skype absorbs a leadership change and a devalued parent expectation, shifting competitive pressure toward whoever can show revenue fit rather than user counts.
- Enterprise-facing momentum matters more: the August 2007 deals GigaOM flagged suggest Skype's path to justifying itself runs through business work spaces, not eBay auction synergy.
Third-order effects
- If the pattern holds, the 2005–2006 wave of large portals buying hot communications startups gets repriced around actual usage and monetization rather than strategic hype, making future acquirers demand earn-outs or lower multiples.
- A durable split emerges between a platform's cultural significance and its acquisition economics — Skype can be historically important to internet telephony while still being a failed purchase for eBay.
The trend: The first generation of Web 2.0-era communications acquisitions is being marked to market, forcing buyers to separate what a platform means from what it earns.