eBay to spin off Skype next year

Online auction giant eBay announced it will spin off its Skype unit. The VoIP service will receive an IPO in the first half of 2010, which could raise $500 million to $1 billion for eBay.

eBay acquired Skype in October 2005 because it hoped the service would dramatically improve communication between buyers and sellers around the world, but this idea never gained a lot of traction.

Skype handles 8 percent of all cross-border voice traffic, making it the world’s largest provider of international calls, according to research firm TeleGeography. Meg Whitman, Donahoe’s predecessor, bought Skype for $2.6 billion in 2005 with the aim of giving buyers and sellers a way to speak to each other. Even though that goal was never realized, Skype’s sales reached $551 million last year.

“The only problem with Skype is it’s part of EBay,” said Jeff Lindsay, an analyst at Sanford C. Bernstein & Co. in New York. “It’s a marriage made in hell. They will make more money from spinning it out than they ever could by keeping it.”

More details at Bloomberg.