Synergy, a combination whose value is greater than the sum of the individual parts, danced like sweet business jargon through eBay’s corporate head when it acquired Skype in 2005. Indeed, former chief Meg Whitman paid $2.6 billion, or 43 times revenue, for its young telecommunications bride.
Now the world’s largest provider of international calls, Skype has become a real threat to regular mobile phone companies, and as analysts have said, “The numbers on the business have been phenomenal.” Skype increased registered users 47 percent in 2008, reaching 405 million by year end, and generated $51 million in revenues, up a whopping 44 percent over 2007. Skypes.
But even though the company continues to grow at a torrid rate, and is a disruptive force in the global telecom space, eBay has announced plans to separate from Skype, with an IPO scheduled for the first half of 2010.
Why would eBay dump its fastest growing business segment? eBay’s president and CEO, John Donahoe, best answered that question: “It’s clear that Skype has limited synergies with eBay and PayPal.”
“Limited synergies,” shall we call that antergy?
Despite the fact that business jargon lacks an antonym for the word synergy, where the whole is SMALLER than the sum of the parts, the lesson is an important one in business: not every marriage is a match made in heaven. But this doesn’t mean that Skype is snake oil, and the IPO could be especially rewarding for the public, who has a returning appetite for hyper-growth plays, such as Skype has proved to be.
So while eBay sits with foot in mouth, the hype on Skype is good, and there are, after all, plenty of fish in the sea… the Skype-iPhone-AT&T fling, now that relationship looks synergous.