eBay's Skype Takes a Toll on Telcos

Skype's new business plan seeks to boost eBay's (EBAY Quote) slumping sales growth by aiming at corporate calling.

In other words, the Interent comes calling on the telco's sweet spot.

The Luxembourg-based voice-over-Internet shop announced a service that allows businesses to make cheap Net calls over existing office-phone systems. The service also includes a Business Control Panel that gives IT managers the ability to allocate Skype phone numbers and control payments.

The move comes less than two weeks after Google (GOOG Quote) made a splash with its own free calling and message-management software offering. The Skype effort adds more momentum to Net calling's threat to speed up the decline of the core business at Verizon (VZ Quote) and AT&T (T Quote).

Skype's effort in particular would likely hamper still-emerging business service efforts by cable shops like Comcast (CMCSA Quote), Time Warner Cable (TWC Quote) and Cablevision (CVC Quote).

After eBay made its $2.4 billion acquisition of Skype in 2005, it soon became clear that the free international-calling specialist wasn't necessarily a sensible fit in eBay's big auction picture. In 2007, eBay wrote off $1.4 billion of its Skype investment. Last year, in contrast to eBay's fading glory, Skype posted impressive numbers.

Skype provides free calling and video calls to other Skype users and charges a few cents for Skypeout calls to conventional or mobile phones.

Registered users, Skype's measure of customers, increased to 405.3 million, up from 276.3 in 2007. And sales rose 44% to $550.8 million last year with 20% gross margins -- eBay doesn't report profits or losses for Skype. Skype now accounts for 6.4% of eBay's total revenue.

In January, eBay CEO John Donahoe sparked speculation that Skype wasn't necessarily a key to his company's future. "We are now confident that the synergies between Skype and the other parts of our portfolio are minimal. So, we are going to continue to run and operate the business," Donahoe told analysts on an earnings conference call.