ONLINE AUCTION AND THE IPOS SKYPE

Online auction and the IPOs Skype

E-Bay Online auction and the IPOs Skype

E-Bay; a traditional IPO or an online auction

E-Bay should use an online auction to take Skype public. eBay Inc. is looking to spin off Skype via an initial public offering a smart move by the online auction house as it tries to get its house back in order. The online auction house expects to complete Skype's IPO. eBay, which has been drifting from its traditional flea market-style auction platform to more of a set-price retailer, has been in the midst of an identity crisis. And unloading Skype could be a sign that the company is getting its act together again. eBay should plan for online auction site to spin off internet call service provider Skype and list shares in the firm. Skype's software lets PC users talk to each other for free and make cut-price calls to mobiles and landlines.It will also enable Skype users to share files. eBay should indicate the online auction giant and it would evaluate the future of its online phone and video-conferencing service.

The type of investors Skype likely to attract

EBay earns most of its money from its sellers, who pay the company a fee whenever they sell something through the auction site. The buyers don't have to pay when they make their purchases. But while eBay receives no direct revenue from the buyers, the buyers nevertheless represent a crucial set of customers for the company - without buyers, there'd be no sellers and hence no business.

In order to get Skype investors to sell, eBay had to offer them enough money for the Skype investors to sell. So when the Skype investors sold their company they sold the revenue growth too. But they didn't just sell the revenue stream ...