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eBay (Nasdaq: EBAY ) finally found a way to unload its popular voice and video chat platform. It will simply take Skype public as a stand-alone company in the first half of next year.
The move makes sense, since investors clearly aren't appreciating Skype's growth within eBay's sluggish digestive tract. It also will help put what eBay cynics -- and accountants -- consider to be one of its biggest mistakes behind it, since eBay took a whopping $1.4 billion charge to write down its investment in Skype two years ago.
Let's not cheat Skype out of its accomplishments. The software has been able to grow nicely, even under eBay's conflicted wing.
- Skype revenue soared 44% higher to $551 million last year, with segment operating margins of 21%.
- Registered users climbed 47% to 405 million by the end of last year.
- eBay expects revenue to go over the $1 billion mark by 2011.
According to CEO John Donahoe, Skype is being pushed out the front door because -- surprise, surprise -- "Skype has limited synergies with eBay and PayPal."
Who didn't see that coming?
I told ya so
"It's still unclear how the three pieces of the eBay puzzle will come together over the next few years," I wrote three years ago. "Incorporating Skype seemed good on paper, but am I the only one concerned that voice chat between buyer and seller may move more completed transactions off to the side?"
Skype was never going to be neatly integrated into the more important PayPal and eBay.com appendages. It may as well be cast out into the wild before it becomes too domesticated.
If the markets are in rosier spirits a year from now, investors will pay well for a piece of Skype. In fact, if Skype's growth trajectory holds true, the longer that eBay can hold onto it, the more valuable it will be when it does go public.
Is it too early to begin calling potential lead underwriters to get chummy before the deal goes through next year? Definitely. Your best bet may be just to warm up to eBay. If eBay follows Time Warner's (NYSE: TWX ) lead with Time Warner Cable (NYSE: TWC ) , an IPO is just a prelude to distributing the rest of the company to its investors. If it decides to hang onto a chunk of the company -- like Sohu.com (Nasdaq: SOHU ) did with Changyou.com (Nasdaq: CYOU ) or as McDonald's (NYSE: MCD ) initially did with Chipotle Mexican Grill (NYSE: CMG ) -- a successful Skype IPO will reflect kindly on shares of eBay.
Buying a company based on what it is unloading may not sound like a logical strategy, but at today's bear market prices on eBay, it's a steal of a deal.