Hedged In

eBay Q2 2009 Earnings Call Transcript

"comp score" should be "ComScore", no?

eBay Q2 2009 Earnings Call Transcript

"GNV" should be "GMV" (gross merchandize value), no?

The Country of Skype

It looks as though eBay is gearing up to sell Skype. Thus the Skype-hype.

eBay Inc. Q4 2008 Earnings Call Transcript

eBay on selling Skype:

Scott Devitt - Stifel Nicolaus

I'll limit it to one. In reference to Skype, in the slide you noted that the revenue accelerated by 500 basis points on an organic basis and so now, it's on a run rate of north of $600 million in revenue and segment margins of above $120 million. So, I was wondering if you could just update us on your thoughts or plans in terms of creating shareholder value with Skype. Thanks.

John Donahoe

Thanks Scott. I said from the beginning, I think I said it a year ago, Skype is a great standalone business and that I was uncertain of the synergies between Skype and the other parts of our portfolio, and certainly today, I still think it's a great stand alone business. And as you referenced, I think we've done a great job on really strengthening this business this year. I think Josh Silverman and his team, who I put in during March or April, have had a very positive impact on this business.

Skype-to-Skype minutes last Q4 were growing at 26%, today they are growing at 72%, primarily because more and more users are adopting this product in tough economic times; a free product has a lot of traction. SkypeOut minutes have gone from 7% last Q4 to 61% growth this Q4, and that said, it's a $600 million run rate with 20% margin. So, there is no doubt this is a great standalone business that's getting stronger.

I think we are now confident that the synergies between Skype and the other parts of our portfolio are minimal. So, we are going to continue to run and operate the business. It's not a distraction currently and at such time when we have further announcement to that, we'll let you know, but for now, we are very pleased with the momentum of the business and it's not a distraction.
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= we want to sell Skype, but we'll wait for a good price.

eBay Inc. Q4 2008 Earnings Call Transcript

Quote from eBay's call -- read carefully:

"Skype had a terrific year. Revenues of $551 million were up 44% and registered users reached 405 million, up 47%, and Skype's user metrics improved significantly during the year.

As I said many times, Skype is a great standalone business, and more and more people around the world are discovering the power of Skype as a communications tool."
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Note: "Skype is a great standalone business" = eBay will sell Skype.

Here are all the times Skype was mentioned on the call: seekingalpha.com/artic...

Wondering what Skype is worth...

eBay Inc. Q4 2008 Earnings Call Transcript

Skype stats from the transcript:

Q4:
- Revenue $145 MM, up 26%
- Excluding currency translation, Skype revenue up 5%.
- Total registered users 405 million, up 47%
- Skype-to-Skype minutes > 20 BN, up 72%.
- SkypeOut up 61% to 2.6 billion minutes.

2008:
- Revenues of $551 MM, up 44%
- Registered users 405 million, up 47%
- Operating margins of approximately 21%.

Anything missing?

Microsoft and eBay Team Up: Desperate or Brilliant?

Outstanding article.

It reminds me of my own experiences during the tech bubble, in 1999. eCommerce companies, public and private, were being judged by (and valued based on) the number of customers they had, not the profits they made. That led to some really weird pricing behaviour. One company, an online drug store that competed with Drugstore.com, offered a $20 voucher and free shipping as long as your purchase was $30 or more. So people I knew purchased $30 of soap, shampoo and other stuff that they'd have to buy anyway. And then they did the same thing for their wives and adult kids.

But here's where it got really crazy. The online drugstore had really bad logistics, so they'd deliver orders in multiple shipments. To make things worse, the packing boxes were huge -- much larger than was necessary for the items themselves.

I remember receiving this huge box. We opened it, dug through a mountain of foam beans, and found at the bottom... two bottles of shampoo. The postage on the box was over $10. The next day, another box arrived, and then another. We paid net $10 for our order. But the online drugstore must have lost about $60 on our order. After the end of the "special offer", we never bought another thing from that store.

That company went backrupt. And the message I took away was that you can't buy repeat customers with one-off, unsustainable discounts or special offers. They'll come for the crazy special offer, and never return afterwards.