Lynne Kiesling
Even though Skype proves that anyone can sell phone service and is being courted for acquisition, the stock of its main suitor, eBay, fell 4% today on the news of the potential union.
J.P. Morgan weighed in on the possibility, saying it thinks the inclusion of voice over Internet protocol, or VoIP, technology such as Skype’s could help eBay quickly improve customer service, which has been a concern of late. …
Assuming Skype is operating at breakeven and that the deal price is in the $2 billion to $3 billion range, the firm estimates the transaction would dilute eBay’s earnings by 4 to 5 cents a share in fiscal 2006. …
J.P. Morgan also pointed out that VoIP isn’t eBay’s core competency, although the company has done well integrating past acquisitions, and that the market is likely to shape up to be highly competitive due to low barriers to entry in the business and the presence of other large players such as Vonage.
Hmmm. This tells me that the customer-service-enhancing effects of broadening their business scope to include Skype may not be worth it. Is there anything else it should be telling us?