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| Version 1 | Version 2 |
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| Ebay cuts back its value of Skype | Ebay cuts back its value of Skype |
| (about 2 hours later) | |
| EBay has conceded that it paid too much for internet telephone service Skype - dramatically writing down the value of its investment. | EBay has conceded that it paid too much for internet telephone service Skype - dramatically writing down the value of its investment. |
| The online auction firm has written down Skype's value by $900m (£450m) and set aside $530m to settle future obligations to some shareholders. | |
| Together, that amounts to charges of $1.43bn against the purchase in 2005, when it paid $2.6bn for the business. | |
| Skype founders Niklas Zennstrom and Janus Friis have quit as executives. | Skype founders Niklas Zennstrom and Janus Friis have quit as executives. |
| "I think this is a testament that the Skype franchise is not worth as much as eBay originally thought," said Youssef Squali of the brokerage Jeffries & Co. | "I think this is a testament that the Skype franchise is not worth as much as eBay originally thought," said Youssef Squali of the brokerage Jeffries & Co. |
| Skype generated only $90m in revenue in the three months to the end of June, eBay said. | Skype generated only $90m in revenue in the three months to the end of June, eBay said. |
| Other projects | Other projects |
| At the time of the purchase, eBay had said it may pay up to $1.7bn on top of the $2.6bn, depending on performance. | At the time of the purchase, eBay had said it may pay up to $1.7bn on top of the $2.6bn, depending on performance. |
| News that this would not happen sent its shares up 1.6% to an 18-month closing high. | News that this would not happen sent its shares up 1.6% to an 18-month closing high. |
| If you take Skype out of the equation, the rest of the eBay business seems to be doing great again Steve Weinstein, Pacific Crest Securities | If you take Skype out of the equation, the rest of the eBay business seems to be doing great again Steve Weinstein, Pacific Crest Securities |
| Analysts said that this also reflected the greater flexibility eBay may now have, following the change in personnel. | Analysts said that this also reflected the greater flexibility eBay may now have, following the change in personnel. |
| However, eBay said it might pay Skype shareholders another $195m, but only if it sells 50% or more of Skype before the end of March 2008. | However, eBay said it might pay Skype shareholders another $195m, but only if it sells 50% or more of Skype before the end of March 2008. |
| Mr Zennstrom, who was chief executive of Skype, will become non-executive chairman and is expected to spend more time on other projects. | Mr Zennstrom, who was chief executive of Skype, will become non-executive chairman and is expected to spend more time on other projects. |
| After the Skype sale, he and Mr Friis founded an online video company called Joost.com. | After the Skype sale, he and Mr Friis founded an online video company called Joost.com. |
| Joost, which had previously only been available by invitation, made its software freely available on Monday. | Joost, which had previously only been available by invitation, made its software freely available on Monday. |
| Analysts said that while Skype had not made a lot of money, eBay itself remained a strong business. | Analysts said that while Skype had not made a lot of money, eBay itself remained a strong business. |
| "If you take Skype out of the equation, the rest of the eBay business seems to be doing great again," said Pacific Crest Securities analyst Steve Weinstein. | "If you take Skype out of the equation, the rest of the eBay business seems to be doing great again," said Pacific Crest Securities analyst Steve Weinstein. |
| "EBay management has found ways to re-accelerate the core (auctions) market. Lots of its businesses are doing extremely well." | "EBay management has found ways to re-accelerate the core (auctions) market. Lots of its businesses are doing extremely well." |