If Ebay Did It: Possible Skype Buyers and Probabilities

This story was written by Rafat Ali.
The on-again off again speculation about Ebay looking to sell Skype came up again last week in the as-usual-unreliable Times UK, again, and yet again, some quarterbacking from various sources about who could be interested. In its weekly research note this morning (not online), Cowen and Company analysts have some names and possible motivations they may have to pursue a Skype buy. It says there could be four possible buyers:

Microsoft (NSDQ: MSFT) (high probability): Microsoft may decide to purchase Skype to integrate its communications features with its planned consumer web-based software products.

Google (NSDQ: GOOG) (medium probability): Gmail chat already has audio and video and this could enhance its IM chances, the report says, and also increase Skype's penetration.  However, with the price tag ($1 billion plus) and incidental synergies, Google could do better by buying smaller technology companies, it says.

Yahoo (NSDQ: YHOO) (low probability): Like Google, adding to its already big e-mail and IM services, and it has the cash. The new CEO has been weary of big acquisitions, though, it says.

Facebook (low probability): The company has an IM/notification feature, but does not have audio or video. But Facebook supposedly declining valuation, and lower cash means unlikely interest. That plus Facebook attempts to buy Twitter instead

As for the price, well: "At 10x 2009E EV/EBITDA, which would be generous multiple in the current environment, Skype would be valued at $1.6 billion or $1.30 per eBay (NSDQ: EBAY) share." A let down from when Ebay bought it in 2005 for $2.6 billion in cash and stock (and it did do a $1.4 billion writedown on Skype in 2007), but even at a much discounted price would be, well, pricey.


By Rafat Ali
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