Net telephony favourite Skype on sale

Owners eBay will float shares through an IPO that is scheduled to be completed by 2010

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By  Vineetha Menon Published  April 15, 2009

Online auction site eBay plans to separate internet telephone firm Skype from its portfolio through an initial public offering (IPO) that’s expected to be finalised by the first half of 2010.

eBay acquired Skype Technologies back in 2006 in a deal worth $2.6 billion in the hope that it would boost easy communication between buyers and sellers involved in online auctions.

While it was obvious that eBay was struggling to make money off its acquisition over the years, president and CEO John Donahoe has now publicly acknowledged that Skype going it alone is probably what’s best in the long run.

"Skype is a great stand-alone business with strong fundamentals and accelerating momentum," said Donahoe. "But it's clear that Skype has limited synergies with eBay and PayPal. We believe operating Skype as a stand-alone publicly traded company is the best path for maximizing its potential.”

The news follows eBay’ recent decision to sell StumbleUpon back to its founders, making the company independent again after nearly two years. It was recently unblocked in the UAE allowing residents in the country to experience the online content sharing service.

Getting rid of bad acquisitions is not surprising given current economic conditions and a flotation of Skype shares is already generating a lot of interest. The service, which is not officially available in the UAE, raked in revenues of $551 million and registered and impressive 405 million users last year. Skype also expects to top $1 billion in revenue in 2011.

The recent release of Skype for Apple’s iPhone application is also a reflection of its popularity - more than a million downloads in the first 36 hours of its availability.

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