EBay is taking longer than expected to generate a financial return from Skype since acquiring the pure-play VoIP provider in October 2005, the online-auction site's CEO has admitted. Skype has struggled to effectively leverage its link with parent eBay and sister company PayPal to further develop its own telecoms services, say analysts. EBay's fourth-quarter results, published last month, show that Skype is falling short, albeit narrowly, of the revenues predicted at the time of its 2005 acquisition. The results show that Skype's 2006 revenues were USS195 million (€150.2 million) against the US$200 million suggested at the time of its sale. EBay acquired Skype for an initial US$2.6 billion in cash and shares, although the amount could rise to US$4.1 billion in 2008 or 2009, depending on its performance (TM, 20 Sep, 2005). In addition, at the time of last year's takeover it was predicted that Skype would break even in 4Q06, yet in last month's results eBay did not say that the service had reached break-even. No one from eBay was available last week to comment.
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