We'd hardly blame Meg Whitman if, after this week, she decided to hang up on the phone business altogether. On Monday eBay said they were taking a $1.4 billion charge related to their acquisition of VOIP startup Skype. On Tuesday, we noted that one of Whitman's major goals in buying Skype, bolstering its auction business in China, where rivals were using click-to-call features on their auctions to close sales, has turned into a complete failure. And then, yesterday, things somehow managed to get worse.
Skype competitor Jajah launched click-to-call buttons that connect potential buyers and eBay sellers, accomplishing an integration into the auction site that Skype hasn't. In response to this affront, eBay last night deleted all auctions with Jajah buttons on them. Reportedly, eBay and Jajah had reached some sort of tentative agreement giving Jajah users the go-ahead to put Jajah buttons on their auctions — but that deal is now clearly dead.
So where does that leave things? eBay screwed up so badly with Skype that some in the Valley say the botched acquisition could burst Facebook's ridiculous valuation bubble. Stifled by eBay's bureaucratic inertia, Skype let a rival beat it on its own home turf.
It's high time for eBay to sell Skype to someone who cares. eBay succeeded with PayPal because it was a natural fit with eBay's customers, both buyers and sellers. But now, the only thing that makes less sense than buying Skype for $2.6 billion is continuing to hang onto it. (Photo by Ryan Fanshaw Photography)