EBay To Sell 65 Percent Of Skype

Internet auction house eBay is selling control of Skype for about $2 billion. Under the deal, eBay will retain ownership of about one-third of the online telecommunications unit. Skype has more than 400 million customers who use it to make mostly international calls. Calls between Skype users are free.

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ARI SHAPIRO, host:

This morning, there's news that eBay is selling more than clothes and furniture. The online auction company has decided to sell the Internet phone service Skype. eBay bought Skype back in 2005, and as NPR's Laura Sydell reports, that decision is now seen as a mistake.

LAURA SYDELL: When eBay bought Skype, the idea was that buyers and sellers could talk to each other one-on-one over the Internet. Suterita Moperu(ph), an analyst at Forrester Research, says eBay hoped to make the whole online sales process more personal.

Ms. SUTERITA MOPERU (Analyst, Forrester Research): Theoretically, you'd feel more comfortable with the purchase and potentially either complete the transaction or maybe even buy it for more than, you know, what the next lowest bidder would've purchased it for.

SYDELL: Since eBay gets a percentage of the sale, that would mean more revenue for them, too. But somehow, the whole Skype idea never worked out. Moperu says at one point, there was talk of putting a Skype me button on every product page to encourage talk, but that never happened. So eBay has finally decided to sell 65 percent of its stake in the Internet phone service for more than 1.9 billion in cash. eBay purchased Skype for more than $2.5 billion.

Skype is being sold to several investment firms, and analysts believe it has the potential to bring in much more revenue. Skype has more than 400 million customers, who use it mostly to make international calls. Calls between Skype users are free. The company makes its money by charging for calls between Skype and other networks. If it does well, eBay still has a 35 percent stake.

Laura Sydell, NPR News, San Francisco.

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