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."