Hangs up on Web 2.0 telco dream
eBay plans to spin off Skype sometime in 2010, having failed to turn itself into a Web 2.0 telecoms hybrid.
eBay said today it's targeting an initial public offering for Skype in the first half of next year. The IPO idea follows recent rumors that Skype founders Niklas Zennstrom and Janus Friis were rounding up private equity partners to buy back their firm for $1.7bn. The IPO might also be a scheme for eBay to drive up the bidding price and make some of its money back.
The company has been looking for ways to offload its VoIP outfit since at least the beginning of this year, if only it could find someone willing to pay the right amount.
eBay's chief executive John Donahoe today cited "limited synergies" between the online auction house and VoIP engine, adding he thinks Skype will do better as a stand-alone publicly traded company. Donahoe said he's spent a year meditating on Skype's fate since he replaced Meg Whitman as CEO in April 2008.
Whitman is now campaigning to become governor of California based on her "solid" achievements as a business chief whilst running eBay.
The original bright idea behind Whitman's $2.6bn purchase of Skype in 2005 was to blend a communications unit inside its shoe, automotive and Star Trek memorabilia storehouse.
It was the kind of un-baked thinking that Silicon Valley championed as the very epitome of "rational exuberance". That is the opposite of the "irrational exuberance" of the dot-com era. Loosely translated: enthusiasm, without the crazy.
Four years later, eBay has been unable to logically integrate the technology into its core business. Turns out crazy is still crazy, no matter how rational it might seem during a tech bubble.
In 2007, eBay was forced to eat a $900m charge based on the decreased value of Skype.
eBay said Skype's 2008 revenue was $551 million, up 44 per cent from 2007. The company also expects to top $1bn revenue by 2011.
Perhaps the company is hoping an IPO announcement set for the distant future could work out two ways: either it gets investors excited about making Skype a separate firm, or it will urge those thinking about buying the company outright to reach a little deeper into their wallets. ®
Wednesday, May 20, 2009
Friday, May 08, 2009
Carphone buys Tiscali UK for £236m
Carphone Warehouse is set to become Britain’s second largest broadband provider after it agreed to pay £236m in cash for the UK assets of Tiscali, the Italian telecoms group.
Carphone said it would be funded by its existing debt facilities and would raise its earnings earnings per share by 10 per cent in the current financial year to March 2010.
The move will also see Carphone move ahead of Virgin Media to become the UK’s second largest broadband supplier behind BT. It is currently third with 2.7m customers at December 31, according to Enders Analysis, the research group, but ahead of British Sky Broadcasting in fourth. Tiscali, the country’s fifth largest broadband supplier, has 1.7m customers but has been losing customers.
The news sent Carphone shares 12p or 7.6 per cent higher to 170p in afternoon London trading while shares in Tiscali, which also announced plans for a capital hike of €210m, were 3.7 per cent higher in Milan at €0.4465 in Milan.
A deal for Tiscali UK has been widely anticipated by investors fearful that it lacked the economies of scale to survive in the Italian and UK broadband markets.
But Tiscali has come under pressure in the last year to sell its UK assets to reduce its onerous borrowings. At €601.1m ($792m), Tiscali’s net debt is more than three times its earnings before interest, tax, depreciation and amortisation. The uncertainty has meant the shares have lost more than 80 per cent in value in the last 12 months.
Carphone made an informal offer of £550m in May last year, but it was rejected. Tiscali subsequently entered into exclusive talks with BSkyB over a sale but talks were called off in March with the parties unable to agree a price.
The deal is set to give Carphone around 25 per cent of the UK residential broadband market. Analysts at Citi argued that anything below £250m meant Carphone was getting the 1.8m customer case cheaper than it could otherwise acquire customers in the domestic marketplace.
“Given UK broadband penetration is about 65 per cent, mergers and acquisitions is the only way to grow the customer base in bulk,” Andrew Lee, analyst at Citi, told clients yesterday.
Analysts have also pointed out that the scale of the customer base would give Carphone in a stronger negotiating position with BT on wholesale fibre rates if fibre optic-based broadband services became an important service in the UK.
Tiscali said the deal had helped it agree the key terms of its debt restructuring plan. In addition to the proceeds from the sale of Tiscali UK, it will also raise up to €210m to strengthen its capital structure.
Carphone said it would be funded by its existing debt facilities and would raise its earnings earnings per share by 10 per cent in the current financial year to March 2010.
The move will also see Carphone move ahead of Virgin Media to become the UK’s second largest broadband supplier behind BT. It is currently third with 2.7m customers at December 31, according to Enders Analysis, the research group, but ahead of British Sky Broadcasting in fourth. Tiscali, the country’s fifth largest broadband supplier, has 1.7m customers but has been losing customers.
The news sent Carphone shares 12p or 7.6 per cent higher to 170p in afternoon London trading while shares in Tiscali, which also announced plans for a capital hike of €210m, were 3.7 per cent higher in Milan at €0.4465 in Milan.
A deal for Tiscali UK has been widely anticipated by investors fearful that it lacked the economies of scale to survive in the Italian and UK broadband markets.
But Tiscali has come under pressure in the last year to sell its UK assets to reduce its onerous borrowings. At €601.1m ($792m), Tiscali’s net debt is more than three times its earnings before interest, tax, depreciation and amortisation. The uncertainty has meant the shares have lost more than 80 per cent in value in the last 12 months.
Carphone made an informal offer of £550m in May last year, but it was rejected. Tiscali subsequently entered into exclusive talks with BSkyB over a sale but talks were called off in March with the parties unable to agree a price.
The deal is set to give Carphone around 25 per cent of the UK residential broadband market. Analysts at Citi argued that anything below £250m meant Carphone was getting the 1.8m customer case cheaper than it could otherwise acquire customers in the domestic marketplace.
“Given UK broadband penetration is about 65 per cent, mergers and acquisitions is the only way to grow the customer base in bulk,” Andrew Lee, analyst at Citi, told clients yesterday.
Analysts have also pointed out that the scale of the customer base would give Carphone in a stronger negotiating position with BT on wholesale fibre rates if fibre optic-based broadband services became an important service in the UK.
Tiscali said the deal had helped it agree the key terms of its debt restructuring plan. In addition to the proceeds from the sale of Tiscali UK, it will also raise up to €210m to strengthen its capital structure.
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