EBay to spin off Skype in IPO

EBay Inc. announced today (April 14) that it plans to hold an initial public offering to spin off Skype.

In a press release, the San Jose, California-based company said it expects the IPO to wrap up in the first half of 2010.

“Skype is a great stand-alone business with strong fundamentals and accelerating momentum,” John Donahoe, president and CEO of eBay, said in the release. “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. This will give Skype the focus and resources required to continue its growth and effectively compete in online voice and video communications. In addition, separating Skype will allow eBay to focus entirely on our two core growth engines—e-commerce and online payments—and deliver long-term value to our stockholders.”

The Skype software allows users to make free and low-cost voice and video calls, send instant messages, and share files.

Skype released its highly anticipated application for the iPhone at the end of last month, and will make one available for BlackBerry smartphones in May.

It had 405 million registered users at the end of 2008, and generated $551 million in revenue last year.

EBay purchased Skype for US$2.6 billion in 2005.

Shares of the company closed today at US$14.38 on the NASDAQ stock exchange.