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October 10, 2008 7:15:41 PM CDT

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eBay's $1.4 Billion Phone Bill

Posted Oct 2, 07 12:04 AM CDT in Technology,  Business 

(Newser) – eBay's $2.6 billion acquisition of phone service Skype looks like a wrong number, with profits on hold indefinitely. The Wall Street Journal reports eBay will take a $1.4 billion write down on Skype, which  accounts for $90 million of eBay's $1.83 billion in revenue in the third quarter. Skype CEO Niklas Zennstrom is stepping down.

The news brings a big "We told you so" from Wall Street. "We had concerns at the time of the acquisition that eBay was overpaying for an unproven technology and expecting a lot of synergy that didn't seem plausible," says one analyst. "The price may have been unjustified."

Source Wall Street Journal

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Toys and eBay card games are shown at a cubicle at the eBay Community building in San Jose, Tuesday, July 17, 2007. (AP Photo/Jeff Chiu)   (Associated Press)
In this photo released by eBay, President and Chief Executive Officer of eBay, Meg Whitman, left, stands with Niklas Zennstrom, CEO and Co founder of Skype, the global Internet communications company....   (Associated Press)
An eBay sign is shown outside of the eBay campus in San Jose, Tuesday, July 17, 2007. AP Photo/Jeff Chiu)   (Associated Press)
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social networking  • eBay  • Skype  • digital video  • PayPal  • revenue  • online music  • Meg Whitman  • Vonage  • write down


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