Is Skype on sale at eBay? page 2

"For anybody who is tech-savvy, it's the preferred way of calling," says Yankee Group analyst Zeus Kerravala. "It has become part of our vocabulary: 'I'll Skype you later.'"

Skype has more than its reputation to fix. Silverman says the company developed a bad case of project drift, frequently starting up new features without bothering to support or promote them. He has begun killing the least promising among them to focus on Skype's best prospects. For example, projects like Skypecast, a "public conversation platform," and SkypePro, a confusing bundle of add-on services, no longer exist. In their place Skype is heavily promoting a new product that makes video chats as easy to do as instant messages.

Silverman also has beefed up management. In July he hired as chief operating officer Motorola (MOT, Fortune 500) veteran Scott Durschlag, who is expected to boost Skype's marketing, which has relied so far primarily on word of mouth. "There are not a lot things that do better in a tough economic environment, but Skype is one of them," says Durschlag. He also sees business customers, who make up 30% of Skype's volume, as an opportunity. "The good thing about businesses is that they tend to pay," he quips.

To Skype's benefit, eBay has given up on synergies between the two. Whereas Whitman once envisioned eBay buyers and sellers clicking a Skype button to hash out transactions, Silverman barely mentions eBay in an hourlong interview. "I won't pursue anything just to justify a deal," he says. eBay CEO Donahoe effectively leaves him alone to run Skype, now that there's a tacit understanding that it doesn't fit with eBay. Silverman clearly is dressing Skype up for sale, and telecom giants as well as Microsoft (MSFT, Fortune 500) and Google remain the most likely buyers.

With Skype valued around $2 billion on eBay's books, price remains the issue. David Braunschvig, an independent investment banker, thinks there's probably an appetite for Skype but that the young company will require a large investment to expand its reach beyond its current user base. "That will have a depressing effect on what a potential acquirer would be willing to pay," he says. Still, Morgan Stanley analyst David Joseph is bullish on Skype's prospects, calling it one of eBay's two "healthy assets" - the other being PayPal - and valuing Skype at $2.5 billion. (Donahoe has repeatedly denied any interest in selling PayPal.)

Joseph's valuation is still well below what eBay paid for Skype, of course. Oops. As anyone who's bought on eBay knows too well, sometimes you don't realize you've overpaid for something until you see how it looks in your house.  

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