Selling Shares of Skype May Give eBay Money for Acquisitions, Stock Repurchases

By Ed Silverstein May 24, 2011

eBay may use some of the $2.4 billion it made when selling its share of Skype to make new acquisitions and repurchase its stock, according to media reports.

eBay CEO John Donahoe told The Wall Street Journal this week, “We will continue to use that balance sheet to invest in organic growth, make acquisitions selectively and provide return to our shareholders with stock buybacks. We have over 8 billion dollars in cash. There is nothing imminent but when we see something that will help our mission to connect buyers and sellers [we will do it].”

eBay had a 30 percent stake in Skype. In addition, eBay is now looking for possible takeovers.

Donahoe added that eBay is focusing more now on mobile products, according to a report from The AFP. He also predicted that Europe and Asia will be a larger share of eBay revenues. The United States represents about 40 percent of eBay revenue, with 40 percent in Europe and 20 percent in Asia, The Journal said.

Europe and emerging markets are important markets for future growth at eBay, The Journal added.

But not everyone is thrilled with the prospect of eBay making more acquisitions.

“Let’s think of it this way,” said a blog from The Wall Street Journal. “EBay’s rather dumb acquisition of Skype was bailed out by a perhaps even dumber acquisition of Skype by Microsoft. And now eBay will spend its bailout money on the potential for yet more, perhaps stupid, deals in the future.”

Microsoft is buying Skype for $8.5 billion.

In a related matter, TechZone360 reported that Microsoft Chairman Bill Gates claims he played a key role in getting Microsoft to agree to acquire Skype.

“I was a strong proponent at the board level for the deal being done,” Gates said during an interview with the BBC’s Hardtalk program, TechZone360 added.

Want to learn more about the latest in communications and technology? Then be sure to attend ITEXPO West 2011, taking place Sept. 13-15, 2011, in Austin, Texas. ITEXPO offers an educational program to help corporate decision makers select the right IP-based voice, video, fax and unified communications solutions to improve their operations. It's also where service providers learn how to profitably roll out the services their subscribers are clamoring for – and where resellers can learn about new growth opportunities. To register, click here.

Ed Silverstein is a TechZone360 contributor. To read more of his articles, please visit his columnist page.

Edited by Jennifer Russell

TechZone360 Contributor

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