You Blew It, eBay

If timing is everything, eBay (Nasdaq: EBAY  ) is off its game.

Yesterday, Verizon (NYSE: VZ  ) confirmed in a joint press statement that it's partnering with Skype to offer the rebel Internet telephony service to customers via its 3G data networks.

Owners of Motorola's (NYSE: MOT  ) Droid and certain models of Research In Motion's (Nasdaq: RIMM  ) BlackBerry handsets will be first to benefit from the expanded coverage, providing they're paying for data plans.

Data is the key here. Two weeks ago, Skype said Apple (Nasdaq: AAPL  ) had changed its iPhone software development kit (SDK) to remove restrictions that would allow for voice calls over data networks. AT&T (NYSE: T  ) has since said it will allow iPhoners to tap into this new feature as soon as Skype makes it available.

Dogpile!
Which brings me back to eBay. In September, the e-auctioneer agreed to sell 65% of the company to an investor group for $1.9 billion, valuing the entire business at $2.75 billion.

Two months later, eBay agreed to drop its stake to 30% as Skype's co-founders -- Niklas Zennstrom and Janus Friis -- won 14% of the new company in a legal settlement. The co-founders also granted the new Skype unrestricted rights to previously disputed intellectual property, media reports say.

How good do you think these two are looking right now?

To be fair, eBay still has a slice of Skype. And it's hard to blame executives for selling, or settling, when they did. Skype was never core to eBay's business. There were also legitimate questions as to whether Skype would ever be more than just another Vonage (NYSE: VG  ) .

As of today, those questions have been answered. You blew it, eBay. Don't compound your mistake by selling the rest of your Skype stake now.

Will Skype come public again as an independent company? Share your thoughts in the comments box below.

Apple and eBay are Motley Fool Stock Advisor selections. Motley Fool Options has recommended a bull call spread position on eBay. Try any of our Foolish newsletter services free for 30 days.

Fool contributor Tim Beyers is a member of the market-beating Motley Fool Rule Breakers stock picking team. He had stock and options positions in Apple at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. The Motley Fool is also on Twitter as @TheMotleyFool. The Fool's disclosure policy is no longer coherent.


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  • Report this Comment On February 17, 2010, at 6:06 PM, langco1 wrote:

    skype is worthless and ebay was smart to unload it while they could..

  • Report this Comment On February 18, 2010, at 11:28 AM, databasemarket wrote:

    eBay is an old platform. They need to improve the experience. I still sell and buy on occasion but not too much. I feel better buying from Amazon and the prices are often the same or better.

    The area they really need to expand is PayPal.

  • Report this Comment On February 23, 2010, at 8:48 PM, PhilipCohen wrote:

    eBay is a totally dysfunctional organization that knowingly and deliberately facilitates sophisticated shill-bidding fraud on buyers by unscrupulous sellers (eBay is a ‘criminal facilitator’), and PayPal’s ‘clunky’ payments system encourages fraud by unscrupulous buyers on sellers; between the two of these dysfunctional organizations, eBay has become an unsafe place for sellers; it has always been an unsafe place for buyers; eBay’s introduction of masked bidding aliases has simply made it that much worse.

    The details at: http://www.auctionbytes.com/forum/phpBB/viewtopic.php?p=6502...

    eBay: ‘Dead man walking’—and deservedly so.

    PayPal: Systemically dysfunctional to the core.

  • Report this Comment On February 23, 2010, at 9:06 PM, ragedmaximus wrote:

    I invested in ebay a short while back ,thanks jim cramer,I lost money and sold it, it looks like from oct.2007 it was already in a downwars spiral before the market crash and went back to where it is today and quite frankly I think it sees 15 before it ever goes back to 30.what do I know i'm just a fool but I can find better places to invest than ebay.

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