Skype still not profitable

Filed in archive Newsdesk 2.0 on October 19, 2007

Although everyone believes that Ebay is not only profitable, but even very profitable, it is not. Ebay has just announced a $936 million loss for the third quarter of this year. That is an astronomical amount of money, although the company operates worldwide. The story is more complicated though.

Ebay earned a nice amount of dollars in the third quarter, but the results were diminished by the investment in Skype, which cost the company $1.39 billion. Paypal has only brought eBay money, which made investors happy and the share rose more than 5%. Skype grew big time in that same period, but I assume that most of the users only make computer to computer calls, not bringing in any money at all.

It is obvious that eBay paid too much for Skype. It is unclear what will happen to Skype. Either eBay ditches it, or they might introduce a ton of features to keep customers coming, and more importantly, to convince customers to use Skypes paid features as well.