EBay announced Monday it would take more than a $1.4 billion charge related to its Skype Internet phone unit, and Skype's CEO, co-founder Niklas Zennstrom, would step down and become a non-executive chairman. The announcement was really an admission that Skype, acquired by EBay in 2005 for $2.6 billion, has been a let down; part of the charge related to Skype will be a write down of the value of the company by $900 million in the third quarter. "It has not performed as well as we would have hoped in the short term,"
EBay spokesman Hani Durzy said about Skype. The rest of the charge, about $530 million, will go to completing the 2005 acquisition, and for now, Michael van Swaaij, EBay's chief strategy officer, will become Skype's interim CEO. EBay traded up 0.77% to $39.32 in midday trading Monday.
Sources: Bloomberg, WSJ
Commentary: FCC to Announce Rules for Wireless Spectrum Auction • Amazon vs. eBay: Which is a Better Investment?
Stocks/ETFs to watch: EBAY. Competitors: GOOG, AMZN. ETFs: HHH, FDN
Earnings call transcript: eBay Q2 2007
Seeking Alpha's news briefs are combined into a pre-market summary called Wall Street Breakfast. Get Wall Street Breakfast by email -- it's free and takes only seconds to sign up.
